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 But according to Texas Education Agency records, one quarter of the 282 charters granted by the state since 1996 have been revoked, allowed to expire or abandoned.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.