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Courtesy Chicago International Charter School Network/photo by Tommy Giglio

Keith Palz, a science teacher, helps a student at Chicago International's Bucktown campus. Chicago International hopes to pay teachers like Palz higher salaries if a bill to increase charter schools funding passes in the Illinois House.

Will boosting public funding for charter schools be smart money?

by Bryan Lowry
Feb 14, 2013

Charter Chart 1

Bryan Lowry/MEDILL

Data provided by Illinois Network of Charter Schools

Andrew Broy of the Illinois Network of Charter Schools says that there is an inequity in funding between charters and traditional public schools. He says it is a misconception that charters receive all the funds they need by private donations.

Is a bill to increase charter funding fair, as its supporters say, or a blank check, as its critics insist? This is a question Chicagoans will need to ask themselves after a prominent charter network came under scrutiny for its spending of state money.

One of the thorns in the side of neighborhood school advocates – 129 neighborhood schools are vulnerable to closing – is Chicago Public Schools’ expansion of charters. Next year 12 new charters will open in Chicago, and four of those will belong to the United Neighborhood Organization.

UNO’s senior vice president of operations, Miguel D’Escoto resigned this week after the Chicago Sun-Times reported that money from a state grant went to a company owned by two of his brothers. Despite these revelations UNO still has many influential supporters, including Mayor Rahm Emanuel.

“I know they’re going to have to hold themselves accountable, because I believe in being held accountable to the public. They’re getting public resources,” Emanuel said last week. When asked if the organization still had his confidence, Emanuel responded, “On their educational message, yes. And that they do it in the right way.”

UNO’s CEO, Juan Rangel, served as co-chairman of Emanuel’s mayoral campaign.

UNO and other charter networks could potentially see more state money next year if state Rep. Daniel Burke, a Chicago Democrat and another major supporter of UNO, has his way.

Burke introduced a bill in the state house two weeks ago designed to increase per pupil funding for charters. Illinois’ current legislation allows charters to receive anywhere from 75 to 125 percent the level of traditional public schools. That means a district could pay charter schools only 75 cents per student for every dollar traditional public schools receive. This percentage is left to districts to decide and is vulnerable to fluctuation.

CPS has been on the lower end of this scale, according to the bill's advocates. The district did not fulfill a request for exact figures on charter funding in time for publication.

“CPS has never supported charter schools. They see them as competition,” Burke said. He emphasized his belief that charter schools are public schools, and therefore should be equally funded.

House Bill 980, if passed, would require districts to provide 97 to 100 percent per pupil funding.
The Chicago Teachers Union said that the UNO revelations are an example of the need for more oversight with charter funding.

“I’m not saying there doesn’t need to be oversight,” Burke said. “We have observed they are spending dollars properly. I have no qualms,” he said regarding the UNO network. Burke has two UNO campuses in his district and has praised their service to his community.

He called the controversy surrounding the network a distraction. “In society you go to those who you know,” he said of the contracts with D’Escoto’s brothers. He also said UNO’s projects are routinely completed under budget.

Ray Quintanilla, UNO spokesman, noted that D’Escoto was no longer with the organization and that independent consultants have been hired to review the procurement process. He also said that they had given the Sun-Times access to their facilities during its investigation.

“That’s pretty damn transparent in my world,” Quintanilla said. He said potential increased funds would be spent on classroom materials.

A primary goal of Burke and supporters of the bill is that it will enable charters to pay their teachers higher salaries. Kate Proto, a spokeswoman for the Chicago International Charter School network, explained that this will enable charters to retain talented teachers. Advocates and critics of the bill alike have noted that many charter schools have trouble retaining teachers past their fifth year.

“Our primary goal would be for teachers to get more of a competitive salary,” Proto said.

“Despite the professional development that we’re able to provide for them, that doesn’t compensate for the fact that there is a gross gap between their salaries, their average salaries, and that of a similarly experienced teacher who is employed by CPS,” Proto said. “We just want to make sure that we’re celebrating them and giving them what they deserve.”

Charters receive some money from private donations. However, Proto said that this only accounts for 3 percent of her network’s budget. The Illinois Network of Charter Schools said that among local charter schools private funding ranges from 0 to 7 percent of budgets. Proto called the private philanthropy model unsustainable for charter schools.

Several of Chicago International’s campuses are at sites of former parochial schools rented from the Archdiocese of Chicago. Proto said that these campuses are costly to maintain and modernize.
“That alone is an incredible capital burden on us. And we’re actually having to use per pupil dollars that should be going directly into the child’s education and the teacher’s salary,” she said. “Patching leaks with student dollars. It’s basically what we’re doing.”

The Chicago Teachers Union has pointed out that no language in the bill mandates that the funds be spent on teacher salary or classroom resources, a fact Burke confirms. He said he trusted that the money would be used responsibly. Stacy Davis Gates, a CTU representative, called the bill a blank check.

She also criticized the fact that a previous incarnation of the bill, which was defeated last year, went through the House’s executive committee, which is chaired by Burke, rather than the education committee. Burke said the bill went through the executive committee because it was a controversial issue, and called this common practice.

The union’s representative, however, said, “Charters are trying to change the rules in the middle of the game. Does that same money travel after they do their dump?”

Gates contended that students who do not meet the standards of their charter school end up in neighborhood schools, but that the money the school receives for their enrollment does not travel with them.

Gates said that increasing charter funding would exacerbate the financial issues facing neighborhood schools. CPS is facing a $1 billion dollar shortfall for next year, which it hopes to fix through school closings.

Andrew Broy, president of the Illinois Network of Charter Schools, an advocacy organization for charter schools, argued that is unfair that students at charters receive less funding.

“It’s not the district’s money. The money is allocated based on the students,” Broy said. He called the union’s opposition to a bill that could potentially increase teachers’ salaries ironic. “The most pithy way to put it is that most charter school teachers aren’t union members.” Broy said that the issue is about fairness for students and that their needs can be overshadowed by adult interests.

Gates said that there is nothing preventing charter networks from already offering their teachers competitive salaries. She noted how many charter executives receive six figure salaries. UNO’s 2011 990 tax form shows that Rangel received a salary of more than $200,000 as CEO. Quintanilla said that high salaries were used to retain high quality people. It should be noted that the 990 forms are accessible on the UNO’s site for transparency.

Chicago International said it was inappropriate of the union to discuss charter executive salaries, noting that union leaders also receive high salaries.