n abundance of evidence reveals charter schools are largely a sham that benefits the white ruling elite while destroying the public education that has been the foundation of this nation.
Add a June 4 Washington Post column entitled, "Why Hedge Funds Love Charter Schools," to the journalistic case of the people vs. charter schools. Overall, the commentary adds to the larger charge that charter schools are making a lot of people a lot of money. However, it emphasizes that the radioactive sector of the runaway financial sector, hedge funds, are in on profiting from the charter school racket. Washington Post journalist Valerie Strauss cites an analysis by Alan Singer, a teacher who works with the Department of Teaching, Literacy and Leadership at Hofstra University in Long Island, New York:
Obscure laws can have a very big impact on social policy, including obscure changes in the United States federal tax code. The 2001 Consolidated Appropriations Act, passed by Congress and signed into law by President Clinton, included provisions from the Community Renewal Tax Relief Act of 2000. The law provided tax incentives for seven years to businesses that locate and hire residents in economically depressed urban and rural areas. The tax credits were reauthorized for 2008-2009, 2010-2011, and 2012-2013.
As a result of this change to the tax code, banks and equity funds that invest in charter schools in underserved areas can take advantage of a very generous tax credit. They are permitted to combine this tax credit with other tax breaks while they also collect interest on any money they lend out. According to one analyst, the credit allows them to double the money they invested in seven years.
This is part of the answer to the question that Strauss poses at the beginning of her column: "One of the features of corporate school reform is the interest that Wall Street has shown in supporting charter schools. Why?"
Well, there are more financial beneficiaries to be listed in the answer to that question:
The real estate industry, which already receives huge tax breaks as it gentrifies communities, also stands to benefit by promoting charter schools and helping them buy up property, or rent, in inner city communities. One real estate company, Eminent Properties Trust, boasts on its website:
"Our investment portfolio of nearly $3 billion includes megaplex movie theatres and adjacent retail, public charter schools, and other destination recreational and specialty investments. This portfolio includes over 160 locations spread across 34 states with over 200 tenants."
The Charter management group Charter Schools USA recommends that rental costs should not exceed 20 percent of a schools budget. However the Miami Heraldreported that in 2011, 19 charter schools in Miami-Dade and Broward exceeded this figure and one in Miami Gardens paid 43 percent. The Herald called south Florida charter schools a $400-million-a-year powerhouse backed by real-estate developers and promoted by politicians, but with little oversight. Its report found charters paying exorbitant fees to management companies and that many of the highest rents were paid to landlords with ties to the management companies running the schools.
It does not take long to see a trend here: charter schools are a Trojan horse that allows the private market to turn a public education system into a large financial stream of profit - and at an increased cost to the taxpayer in many cases.
That brings us to the topic of Strauss's article hedge funds:
