March 21, 2017

Rolling in dough: Charters holding nearly $400 million in cash, audits show

Source:  NYSUT Media Relations
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ALBANY, N.Y.  March 21, 2017 — Despite perpetual cries of poverty, New York’s charter schools are flush with cash, holding at least $394.6 million in reserves in their bank accounts — a sum that has ballooned by nearly $122 million in just two years, an analysis by New York State United Teachers showed today.

NYSUT’s new analysis of financial documents show that cash held by charters swelled from $272.9 million in June 2013 to $394.6 million in June 2015.  In addition, audits filed by charter management with their authorizers in late 2016 — the latest available — also reveal the charters examined have $451.1 million in unrestricted net assets, which could be used to fund student programs and, more pointedly, pay rent on school facilities.

New York City-based charters report $282.4 million in cash on the books as of June 2015, an increase of $101.1 million in two years.  As of June 2015, New York City charters detailed unrestricted net assets of $323 million, even after many have paid rent on buildings.  

NYSUT President Karen E. Magee said the Senate Republicans’ budget push to further enrich the charter industry is undermined by charter management’s own accounting.

“Over the last two years, the state’s charter industry has stuffed more than $120 million under the mattress, and charter schools now hold nearly $400 million in taxpayers’ cash,” Magee said.  “Yet, as charters roll in the dough, Senate Republicans are embracing Betsy DeVos’ destructive education agenda — siphoning money from neighborhood public schools to reward billionaire supporters of charter schools.  These senators want to fund charters at the expense of the vast majority of students who attend local schools in the communities they represent.”           

NYSUT Executive Vice President Andrew Pallotta said, “It’s disappointing that many Senate Republicans — including senators who have no charter schools in their districts — would back more money for charter management at the expense of tens of thousands of students and educators in their own neighborhood public schools.” 

Pallotta added, “The greed of the charter industry knows no bounds.  They cry crocodile tears and demand more and more state funding, even as their own balance sheets show they already have plenty of cash to spend to expand programs, better support student learning and pay teachers fairly.”

Pallotta stressed that charter audits demonstrate why charter management must be held to stricter standards of accountability and transparency — both for serving all student populations equally and for how they spend the public’s money.  “Since taxpayers don’t vote on charter school budgets or elect charter board members, the state must ensure that charter management is held accountable for serving students with special needs and English language learners, and that taxpayers’ money is used responsibly,” he said.  “Instead, the charter industry stockpiles cash and — in cahoots with the Senate Republicans — demands even more.”

The biggest hoarder of cash is the Roosevelt Children’s Academy Charter School on Long Island with $23.1 million.  The Riverhead Charter School on Long Island held $10.1 million in cash in June 2015, while the Academic Leadership Charter School in the Bronx had $10.2 million in cash.  In the greater Buffalo area, charter schools are holding more than $41 million in cash, while Albany’s charters have $9.9 million in cash reserves.

Eva Moskowitz’ Success Academy Charter Schools-NYC reported $4.4 million in cash — but siphoned away 15 percent of its own schools’ revenues — or $18.3 million — for corporate “management fees.”

New York State United Teachers is a statewide union with more than 600,000 members in education, human services and health care.  NYSUT is affiliated with the American Federation of Teachers, the National Education Association and the AFL-CIO.

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