How for-profit charter schools are ripping off California taxpayers

Assemblyman Kevin McCarty, D-Sacramento, is pushing a bill to prohibit for-profit companies from running charter schools in California.
Assemblyman Kevin McCarty, D-Sacramento, is pushing a bill to prohibit for-profit companies from running charter schools in California. The Associated Press

Across California and the country, corporations are expanding their ownership and operation of charter schools and their profits, subsidized by taxpayers.

In California, 34 charter schools operated by five for-profit education management organizations enroll about 25,000 students. These for-profit charter schools siphon hundreds of millions of dollars of taxpayer money away from students to generate massive corporate profits, and in many cases provide an inferior education.

They exploit loopholes in California’s charter school law allowing them to cheat our students and reap huge profits at taxpayer expense.

We have a long way to go before California’s public education system is adequately funded and cannot afford to line shareholder pockets with scarce state revenues.

The Legislature has the opportunity to fix this flaw in state law. Assembly Bill 406, authored by Assemblyman Kevin McCarty and sponsored by the California Federation of Teachers, would prohibit for-profit corporations from operating public charter schools. The bill was approved by the Assembly on Wednesday and now heads to the state Senate.

It is estimated that California taxpayers provide these companies with more than $225 million a year with little public transparency or accountability.

K12 Inc., the state’s largest for-profit education management organization, received $310 million in state funding over the past dozen years. In 2016, it reported revenue of $872 million, including $89 million paid to its Wall Street investors.

It pays millions to top executives while its average teacher salary is $36,000, thanks to heavy recruitment among young, inexperienced teachers, plus burnout and turnover.

K12 Inc. operates 16 schools in California with about 13,000 students. The average graduation rate of its charter schools is 40 percent, while the statewide rate is 83 percent.

Like many of these for-profit companies, K12 also overstates student performance and attendance data. Students who logged onto their computers for one minute per day were reportedly counted as full-time students, giving the corporation full average daily attendance funding from the state.

Last year, after the state sued the company for manipulating attendance records and overstating student success, the company settled for $168.5 million.

These for-profit companies also have significant influence over charter school boards and, in many instances, place corporate officers on their school boards.

According to an National Education Policy Center report, they open charter schools then require the schools to contract with them for most or all their services, including financial management, curriculum, technology and the hiring and firing of staff.

Passage of AB 406 will help our students receive a high-quality public education and protect public tax dollars that should be spent in the classroom from being diverted to for-profit corporations, their investors and shareholders. That’s something all Californians should want.

Kevin McCarty, a Sacramento Democrat, represents the 7th Assembly District and can be contacted at Joshua Pechthalt, president of the California Federation of Teachers, can be contacted at