School Choice & Charters Opinion

L.A. Charter Plan Needs a Healthy District

By Charles Taylor Kerchner — January 20, 2016 4 min read
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Over the last decade, LAUSD has declined by more than 100,000 students, half of them to charter schools.

Advocates of the Los Angeles reform initiative have pivoted away from the original design to convert at least half the district’s schools to charters.

The original design and its connection to venture philanthropist Eli Broad proved politically toxic, as concern grew over the impact of a massive increase in charters on the Los Angeles Unified School District.

“That plan was a charter plan; this is a great schools plan,” said William Siart, the former banking executive who heads the charter school business and support services organization ExED.

The advocates acknowledged that there are actually good schools that deserve support within the nation’s second largest school district, and ideas worthy of replication. “There are without question, efforts and pockets of excellence within LAUSD, and I’m not talking about the affluent side [of the city], I’m talking about schools that have figured out how to serve students in need very well,” said Myrna Castrejón, who last week was named executive director of the Great Public Schools Now effort.

Still An Un-Plan

Other than pivoting toward inclusiveness, the plan’s still pretty vague. Siart sounds three themes, all of them laudable, all of them abstract: great leadership, strong teachers, and significant autonomy. About half the money, now estimated at $30-$40 million a year, would go to charter school facilities, part for teacher and administrative leadership of quasi-autonomous schools, and the remainder to provide seed money for new schools.

But, in fact, there is no plan yet. And that’s a good thing. If the aim of Great Public Schools Now is to build a first-class 21st century school system in Los Angeles rather than plant more charters, the plan needs to deal with the reality that charter schools are parasitic. Their success depends on a robust public institution behind them. Even if the district were to charter all its schools—an idea being floated by LAUSD board member Mónica Ratliff—the system would still need the regulatory and enforcement functions of a legitimate public body.

The most fundamental barrier to the success of any reform plan is LAUSD’s perilous financial condition. A blue ribbon review panel called together by former superintendent Ramon Cortines projected a $333-million budget deficit by 2017-18 and a $600-million deficit by 2019-20, driven primarily by pension and health care costs.

The report concluded, “Thus, if the District desires to continue as a going concern beyond FY 2019-20, capable of improving the lives of students and their families, then a combination of difficult, substantial and immediate decisions will be required. Failure to do so could lead to the insolvency of the LAUSD, and the loss of local governance authority that comes from state takeover.”

Charter schools add significantly to the fiscal threat. Enrollment drives revenue in California, where stable property taxes make up only a small part of the schools’ revenue base. And over the last decade, LAUSD has lost 100,000 students, significantly more than the entire student population of Long Beach (chart above). About half the decline is attributable to changes in demographics: aging families and a decline in immigration. But the other half represents students who have left district-run schools for charters, 50,000 of them.

Fixing the district’s financial problem is not the duty of the charter advocates. Superintendent Michelle King and the school board will need to step up to that task, as King acknowledged immediately after being named to lead the district.

Healthy District in Charter’s Interest

But charter advocates do have a clear self-interest in seeing that the district’s finances are solid.

Charter advocates may well crow that LAUSD has made bad labor bargains, or that it has too many employees. Indeed, the independent review panel report indicates that the district has nearly 65,000 employees, more now than before the enrollment decline. But a financial default by the district would greatly affect charter financing and operations, too.

Even if the California Legislature did not intervene to restructure the district, perhaps voiding existing charter agreements in the process, a financial overseer appointed by the state would gain broad powers over how and when funds were spent. Investing philanthropic dollars in charters would become riskier and so would the prospects for raising funds for any charter or district reform plan.

So, in the end—or maybe in the beginning—it makes sense for the Great Public Schools Now advocates to use their business acumen and political clout to see that the district itself is fiscally healthy before opening more charter schools.

(Graphs: Los Angeles Unified School District, Report of the Independent Review Panel)

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