Evil Ed, Inc: the Wall Street-Charter School Connection

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http://blogs.alternet.org/speakeasy/2010/05/09/evil-ed-inc-the-wall-street-charter-school-connection/


In America, conservatives couldn’t kill the welfare state because it was too popular, so they decided to re-purpose it for conservative ends. These are their stories.


If you thought that Wall Street couldn’t get more destructive, think again. And if you that the charter school movement couldn’t get even more removed from serving the public good, you also need to think again. On Friday, NY Daily News columnist Juan Gonzalez wrote a column about how big investors can double their money in seven years using a special tax credit to invest in charter schools, and he also discussed what he uncovered in a brief segment on Democracy Now! which he co-hosts with Amy Goodman. Here’s how he summarized it on the air:

One of the things I’ve been trying now for a couple of years is to try to figure out why is it that so many hedge fund managers, wealthy Americans, and big banks, Wall Street banks, executives of Wall Street banks, have all lined-up supporting and getting involved in the development of charter schools. I think I may have come across one of the reasons. There’s a lot of money to be made in charter schools, and I’m not talking just about the for-profit management companies that run a lot of these charter schools.It turns out that at the tail end of the Clinton administration in 2000, Congress passed a new kind of tax credit called a New Markets tax credit. What this allows is it gives enormous federal tax credit to banks and equity funds that invest in community projects in underserved communities and it’s been used heavily now for the last several years for charter schools. I have focused on Albany, New York, which in New York state, is the district with the highest percentage of children in charter schools, twenty percent of the schoolchildren in Albany attend are now attending charter schools. I discovered that quite a few of the charter schools there have been built using these New Markets tax credits.

What happens is the investors who put up the money to build charter schools get to basically or virtually double their money in seven years through a thirty-nine percent tax credit from the federal government. In addition, this is a tax credit on money that they’re lending, so they’re also collecting interest on the loans as well as getting the thirty-nine percent tax credit. They piggy-back the tax credit on other kinds of federal tax credits like historic preservation or job creation or brownfields credits.

The result is, you can put in ten million dollars and in seven years double your money. The problem is, that the charter schools end up paying in rents, the debt service on these loans and so now, a lot of the charter schools in Albany are straining paying their debt service–their rent has gone up from $170,000 to $500,000 in a year or–huge increases in their rents as they strain to pay off these loans, these construction loans. The rents are eating-up huge portions of their total cost. And, of course, the money is coming from the state.
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neo con punks and creeps

can they be stopped?

[DJ13]

1. can they be stopped?

Not as long as our party continues to either support those policies outright, or just cowers in fear of upsetting the right.

[proud2BlibKansan]

2. No. As long as this administration is in office

they can't be stopped.

[Echo In Light]

3. K/R