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House Acts to Preserve Aid for Ariz. Charters Held by For-Profit Firms

By Erik W. Robelen — July 12, 2005 3 min read
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Wading into a dispute between the Bush administration and Arizona officials, the House of Representatives is seeking to ensure that for-profit charter schools can continue to receive aid under key federal programs.

The Republican-controlled House voted June 24 to reverse the U.S. Department of Education’s recent decision that more than 50 for-profit charter schools in Arizona should not get federal money for special education or the Title I program for disadvantaged students. The schools may also lose out on other federal aid.

GOP lawmakers from Arizona attached the measure to a spending bill for the Education Department and several other agencies.

The problem, according to the administration, is that while private firms may be hired to run charter schools, if those schools wish to receive aid under the federal programs, the actual charters cannot be held by for-profit organizations.

Arizona, which experts describe as having the nation’s least-restrictive charter law, appears to be the only state in which for-profit companies hold the charters for schools.

“[W]e cannot stand by and allow the Department of Education by bureaucratic fiat to decide to cut off these funds to deserving children in what are public schools as set forth by state standards,” Rep. J.D. Hayworth, one of the Arizona Republicans sponsoring the amendment, said on the House floor June 24 before the measure was approved by a voice vote.

But even if the amendment becomes law, the for-profit schools stand to lose some $3.6 million in federal aid for the coming school year, Arizona officials say. That’s because the amendment would apply to fiscal 2006 funds rather than the fiscal 2005 money that the federal government began making available this month.

To address that matter and ensure continuing support, an Arizona board that authorizes charter schools and 11 for-profit organizations that hold charters there sued the federal Education Department last month.

The Bush administration, in papers filed June 27 in U.S District Court in Phoenix, says it agrees with Arizona officials that the state’s for-profit charter schools should be considered “public schools.”

But, it contends, for-profit companies holding charters cannot be counted as “local educational agencies” that receive federal grant money under Title I of the Elementary and Secondary Education Act—most recently reauthorized as the No Child Left Behind Act—and the Individuals with Disabilities Education Act.

Susan Aspey, an Education Department spokeswoman, declined to comment on the lawsuit or the House action, but she noted that the department has offered to help the Arizona schools to comply with federal eligibility requirements. The agency has indicated, for instance, that the schools could be reconstituted as nonprofit entities independent of the companies that run them.

Asked about the House action, a spokesman for Rep. George Miller, the top Democrat on the House Education and the Workforce Committee, said the California lawmaker opposes the measure. “Primarily, he’s concerned about scarce education dollars for disadvantaged students going to for-profit schools,” spokesman Thomas Kiley said in an e-mail.

Preventing an Injustice?

But in Arizona, Tom Horne, the state schools chief, applauded the House for trying to avoid what he called “an injustice” against Arizona’s charter schools.

Mr. Horne argued in a June 24 press release that, since the schools under state law are required to accept low-income students and those with disabilities, “it is unfair for the federal government to deny funding for those same … students.”

Jeanne Allen, the president of the pro-charter Center for Education Reform, based in Washington, said that charter laws in at least six other states permit for-profit operators to hold charters. But she and other experts contacted for this story were not aware of any schools outside Arizona where that arrangement was actually in place.

Ms. Allen said she doesn’t necessarily dispute the Bush administration’s legal stance, but worries about its repercussions.

“It shouldn’t matter in the schooling business who the conduit is,” she said. The bottom line here, she argued, is whether the money is supporting public school children in public school entities.

“The federal government should respect state policy,” Ms. Allen said, suggesting that federal education laws should be revised to make clear that for-profit charters can receive federal aid. “Congress is where the battle has to be played out.”

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