Bradley’s Charter School Scheme

Well, this is an odd twist. David Bradley — a supposed champion of the wisdom of free markets — thinks the Texas State Board of Education will do a better job than the private sector in deciding whether it’s too risky to invest in charter schools. (Of course, some board members also think they know more about science and history than scientists and historians. So are you surprised?)

An article in the Austin American-Statesman today explains that Bradley, a Republican state board member from Beaumont Buna, wants the board to consider investing part of the Permanent School Fund‘s $22 billion in facilities for charter schools. The chair of the state board’s Finance Committee and a longtime proponent of charter schools says he “would like to see if this a sector of the market that is mature enough and would offer some opportunity.”

Private investors don’t seem to think so. The Statesman points out that charter schools don’t have what investors typically look for: established financial track records, adequate cash reserves and long-term security.

The Legislature also hasn’t appropriated tax dollars for charter school facilities. Why? Lawmakers know the state’s charter school system has been plagued by fiscal mismanagement, poor academic performance and other problems. Some charter schools do a good job, of course. But according to Texas Education Agency records, one quarter of the 282 charters granted by the state since 1996 have been revoked, allowed to expire or abandoned.

Moreover, charter school proponents promised lawmakers in the 1990s that they would do a better job than traditional public schools with less money if the state exempted them from various regulations (such as limits on class size, minimum teacher qualifications and curriculum requirements). Now they say charter schools are at a disadvantage because they don’t get public funding for facilities. That sounds like a bait-and-switch scheme to a lot of folks.

In any case, suppose Bradley gets his way and the PSF invests in facilities for charter schools. What would happen when a charter school closes down? What would the PSF do with the building it helped to finance or leased to the school? And what would be the effect on the PSF’s balance sheets?

All of that brings up the the state board’s primary responsibility in overseeing the PSF in the first place. According to the Statesman:

Other legal and investment experts say the trustees’ sole obligation is to maximize returns prudently, so any investment in charter schools facilities would have to produce returns comparable to other, similar investments.

“They should not be taking into account collateral considerations, particularly at the expense of investment performance,” said Charles Rounds Jr., an expert on trusts and a law professor at Suffolk University Law School in Boston. “They really should not use the trust fund in order to indulge their own personal predilections.”

We agree. The board should simply focus on making sure the PSF is invested wisely. Making public policy regarding charter schools is the job of the Legislature.

And given the number of charter schools that have failed, we would prefer that the board do a better job screening applicants that seek charters. In some cases, for example, the board has granted charters to entities with significantly lower ratings than other applicants. Moreover, there are already ethics concerns regarding the board’s management of the PSF. It seems to us that the state board has more than enough on its plate right now.

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5 Comments

  1. Posted November 3, 2009 at 12:31 pm | Permalink

    Is David Bradley legally sane? How do guys that weird get on the SBO?

  2. Charles
    Posted November 3, 2009 at 10:00 am | Permalink

    Hi Gage. What’s going on with you today?

  3. PHarvey
    Posted November 3, 2009 at 6:12 am | Permalink

    An ethically challenged (corrupt), politically polarized board of that wants to siphon public money from the PSF into high risk, poorly managed Charter Schools just to advanced a hidden social agenda to weaken the public school system; just wait until the legislature gets back in session.

    I’m sure they will give the legislature more ammunition to strip the SBOE of their power as time goes on.

  4. Gage
    Posted November 3, 2009 at 12:36 am | Permalink

    Dear nameless TFN somebody who writes these: if the Beaumont/Buna thing bothers you, and you want to be consistent, consider that state representative Jim Dunnam lives in an upscale part of the Waco area outside the area he represents. He gets by with this by owning property inside his district. Do Democrats get a pass on these things from TFN for ideological reasons? Is the fault you ascribe to David Bradley any worse?

  5. Charles
    Posted November 2, 2009 at 8:14 pm | Permalink

    Sounds reasonable to me.

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