Minneapolis’s Segregated Charter Schools Score a Windfall

October 9, 2017

On September 28, the U.S. Department of Education announced that it would give a handful of states, including Minnesota, an “additional $253 million in grants to expand charter schools,” in order to spur on school choice–an education reform strategy long embraced by Democrats, Republicans and wealthy financiers. 

Windfall!

In the announcement, Education Secretary Betsy DeVos referenced Minnesota, where the nation’s first charter school was authorized in 1991. With this new influx of federal money, Minnesota’s burgeoning school choice market will receive a $23 million dollar shot in the arm. The bulk of this taxpayer-generated cash will go to the Minnesota Department of Education, while another $1 million will go directly to Minneapolis’s Hiawatha Academies charter school chain.

Such announcements are often accompanied by cheerful talk of innovation and choice. The new federal funding is all about “seeing how we can continue to work with states to help ensure more students can learn in an environment that works for them,” according to DeVos. But this new funding will also support Minnesota’s increasingly segregated public and charter school landscape, as well as an exodus of money and students from union-staffed districts. (Charter school teachers and staff are mostly non-unionized, in Minnesota and beyond.)

Segregated Schools Get a Boost 

Hiawatha Academies is a perfect example of this. The charter school chain serves a population of students that is almost exclusively Latino. Public education records show, for example, that ninety-three percent of HIawatha Academies’ Morris Park students are Latino. The neighborhood it sits in, however, is seventy-seven percent white

Overall, Hiawatha Academies’ test scoresprized by reformers as the measure of school success–have dropped significantly in recent years. 

Hiawatha Academies has several other schools in the southern half of Minneapolis and is slated to open a big, brand-new high school in 2018. This school, Hiawatha Collegiate High School, currently serves 105 students in a former Minneapolis public school site. Eighty-three percent of the students are Latino; again, this is an aberration when the neighborhood’s demographics are considered. Recently, Minneapolis’s Planning Commission approved Hiawatha’s plans to expand the high school, with a target enrollment of over 700 students.

This is less about innovation and more about grabbing market share from the Minneapolis Public Schools. Hiawatha Academiesexpansion  plan makes this clear: “Our goal is that by 2024, more than 2,000 scholars – 5 percent of all Minneapolis school children – will attend a Hiawatha Academies school.” The path to expansion has been paved through unnaturally segregated schools and loads of outside money–including extensive financial support from the WalMart fueled Walton Family Foundation–and now, an injection of $1 million from the federal Department of Education.

Juicy Incentive Packages Lure Funders

Hiawatha Academies’ new high school will also be funded by private investors (including several corporations) who will benefit from a New Market Tax Credit. This tax credit, started in the Clinton administration and intended to boost development in “underserved” areas, has provided a “gravy train to fat city” for charter school investors, as Forbes magazine writer Addison Wiggin put it in a 2013 article. Wiggin describes the charter school market as “booming,” thanks to investments from “bankers, hedge fund types and private equity investors” eager to cash in on the New Market Tax Credit.

In 2010, this tax credit was explored in-depth by journalist Juan Gonzalez. Writing for the New York Daily News, Gonzalez found that investing in new charter schools has become incredibly lucrative. Not only do investors stand to gain a tax credit worth up to 39 percent after seven years, thanks to the New Market program, but they can also earn interest on the money they’ve invested, since it is done in the form of a loan. Gonzalez noted that the New Market Tax Credit can also be tacked onto other “federal tax credits, like historic preservation or job creation….” Hiawatha’s new Collegiate High School will be located in a historic former bottling plant in Minneapolis’s Seward neighborhood.

All told, this adds up to a very juicy incentive package when it comes to the proliferation of charter schools in urban areas. Investors in HIawatha Academies’ new high school have put up $5 million in funding through the New Market Tax Credit program. In order to rake in enough per pupil funds to make this project sustainable over time, the school will need to rapidly grow its enrollment to the projected capacity of nearly 800 students. 

Push for Privatization

The corporate and government-sponsored expansion of charter schools is less about student success and more about pushing privatized, market forces onto public institutions. A recent Minneapolis Star Tribune article documented the drain charter schools are imposing on the city’s increasingly cash-strapped and underfunded public school district. In “Students in Flight,” reporters Beena Raghavendran and MaryJo Webster sized up the situation this way: “Minneapolis Public Schools is the biggest loser in Minnesota’s robust school-choice environment, surrendering more kids to charter schools and other public school options than any other district.”

Pitting privately managed, publicly (and privately) funded charter schools against public school districts creates a market of winners and losers–especially when the charter schools are allowed to serve niche populations. There is further evidence of this on the state education department’s website. There, readers will find a list of charter schools deemed “high quality  and worthy of replication. Included on this list are highly segregated schools like Twin Cities International Elementary School.

Publicly available data shows that this “international” school, located in Minneapolis, has a student population that is 100 percent Black/African-American (18 percent of Minneapolis’s overall population is identified as Black, according to recent census data). From the school’s website, it seems clear that it serves Minneapolis’s large Somali community, with only two percent of its students requiring special education services. That is far less than the special education rate of 15 percent within the Minneapolis Public Schools. (Special education remains an expensive, underfunded proposition for districts, like Minneapolis, that serve a bigger percentage of students with higher needs.)

School Choice Leads to Resegregation

Instead of remedying the historic and ongoing problem of racially and economically isolated neighborhoods and public schools, federal and local support for charter schools is exacerbating the situation. Research–like that of New York Times education reporter, Nikole Hannah-Jones, tells us that segregated schools often remain separate and unequal for students of color. In the Twin Cities, an increase in segregated schools has also meant white students are being educated in public and charter schools with abnormally high percentages of white, wealthier students. Nevertheless, several of these schools–including Twin Cities German Immersion and Nova Classical Academy–are lauded on the state department of education’s website for being “high quality” charter schools.

Meanwhile, the Minneapolis and St. Paul public schools are struggling to keep up–especially in a time when public funding for education has dwindled significantly in Minnesota. Some might call this disaster capitalism, with public entities being weakened over time, in order to create an opportunity to reconstruct the education landscape in favor of privatized, niche (segregated) charter schools that sometimes attract wealthy investors, but often fail to provide a better education for marginalized students.

In an op-ed response to the Star Tribune’s portrayal of Minneapolis as the “biggest loser” in the school choice market, University of Minnesota education professor Nicola Alexander offered a cautionary message. While expressing sympathy for parents and students who don’t want to be left “feeling stuck in schools that do not serve their needs,” Alexander pokes a hole in the idea that school choice schemes are somehow without consequence.

The proliferation of charter schools in urban areas provides an end run around “broader social factors, like poverty, that ailed many of these communities,” Alexander writes. Further, instead of tackling the whole, state and federal policy has fallen “firmly on the side of mechanisms that equated choice with empowerment and school systems with markets.” But, of course, she notes, “markets are not always fair.”

This is not a concept that has bothered Betsy DeVos, either in her home state of Michigan, where she pushed for accountability-free charter schools, or in her new role as federal education secretary. One of the Trump administration’s first action items for the Department of Education, under DeVos, was to cancel an Obama-era program designed to promote school integration. With this latest announcement of more funding for charter schools, states like Minnesota are being pushed further into a market-based, partially privatized education system.

A condensed version of this post was originally published on the Progressive magazine’s Public School Shakedown site.

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2 thoughts on “Minneapolis’s Segregated Charter Schools Score a Windfall

  1. Elizabeth

    You did not mention that in Minnesota, *all* charter schools are in fact public schools. They are required to manage their finances in a transparent and public manner, just like district public schools. This is a fact that the “regular” public schools try to avoid acknowledging. Minnesota runs its charter schools very, very differently than some/many other states. You did not mention that the states are the ones who control how charter schools are managed. Corporations are not, in fact, allowed to fund charter schools; if they are, it is through loopholes or fudging finances.

    You mention special education being a factor in comparing school’s student bodies, but you did not mention comparing the percentage of students receiving free/reduced lunches. The *later* of which reflects the wealth/poverty of the student body. YOu did not mention that special education funding comes almost exclusively from the *federal* government and not the state governments.

    What efforts are being made by charter schools that are trying to change their demographics?
    You mentioned charter schools that are predominantly Latino and Black doing poorly while Nova & Twin Cities German Immersion are “lauded as high quality” while you imply this is because they are rich-white-only schools and not mentioning anything else about them in relationship to the overall topic of your article. You did not mention that there are 2 charter schools where the teachers are unionized, the first of which was at TCIGS.

    Perhaps if the state bothered to fund all public schools well, it might be better for all.

    I realize your article cannot cover everything. While this whole subject is very important to all of us, and critical to me*, perhaps some additional information might provide an even more provocative picture of the situation. Particularly how private funds are allowed to be used by *both* district and charter public schools in Minnesota. A topic where much fudging is possible.

    *I am a parent of students at Twin Cities German Immersion School and an employee of the school

    Reply
    1. sarah.lahm@gmail.com Post author

      I can understand why you seem upset here, in your comments, Elizabeth. As a charter school parent and employee, this topic must feel very personal. I don’t quite get the nature of your first few paragraphs but I don’t think there’s any denying that charter schools and the whole concept of school choice have accomplished many things–including the further resegregation of America’s schools (true in public schools as well, in the era of choice) and and the further scattering of the limited pool of per pupil funds. One reason the TGIS is nearly 100 percent white, I would imagine, is precisely because of the programming (German immersion) that is offered. I get why people want to have these kinds of schools (I have a preference for progressive education, for example) but I don’t think they should be above reproach or critical examination.

      Reply

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