By many measures, BASIS is a Tucson success story.
Launched in 1998 as a single charter school in rented space, it has grown into a network with schools in Arizona, Texas, Washington, D.C., California, New York, Virginia and even China. It was named the No. 1 school in America by Newsweek and tops the lists for best high schools and best charter schools put out by U.S. News & World Report.
But just as it stands as an example of what is right with the charter school model, it also points to what is wrong.
Public money dedicated to educating Arizona’s children is ending up in the hands of private for-profit businesses, and the lack of transparency and accountability in the system allows financial practices that, while within the law, should not be tolerated.
Greater oversight and similar financial regulations like those followed by district schools should be put in place by the state.
As reported by the Star’s Yoohyun Jung, BASIS transitioned to private management in 2009, leaving few financial details publicly accessible. Previously, tax filings showed that not only were BASIS founders Olga and Michael Block making more than $350,000 combined for running two schools, they also had family members on the payroll.
In 2014, the most recent year for which tax filings are publicly available, the nonprofit charter school arm of BASIS paid the private education management company established by the Blocks, BASIS.ed, $15.6 million in management fees and $44.3 million for salaries and benefits.
In that respect, BASIS is like many other charter schools in Arizona, according to a report by the centrist Grand Canyon Institute, which found that for-profit businesses owned by the charter operator, a board member or one of their relatives received about half a billion dollars of state taxpayer funds in 2014.
Examples outlined in the report include the purchase of curriculum and software, teacher and staff hiring, consulting services and property leasing handled for the charter school by the for-profit company.
Needless to say, this kind of conflict of interest and no-bid contracts are illegal for public school districts. Charter schools should be no different.
Using a private education management company also limits the kind of records available to the public — records that any school district is required to provide, including employment contracts, contract bids, financial reports and communication between administrators, reported Jung.
In the case of BASIS, its rapid growth also leaves taxpayers on the hook. Its public status allows it to borrow tax-free and at lower interest rates, and through repeated borrowing and refinancing, it is public money that ends up paying for transaction fees and interest, through state per-pupil funding for education. And the public doesn’t even own the buildings purchased — they are owned by BASIS.
Although all of this is not illegal for charter schools, it is clearly wrong. At a minimum, lawmakers should push for the recommendations included in the Grand Canyon report, which call for a public competitive-bid process, adopting executive salaries comparable to public district schools and audits by the state auditor general.
While the debate on the effects that charter school growth has on traditional public education continues, neither should be undermined by public money enriching a few at the expense of students and taxpayers.