A severely troubled school district in Pennsylvania faces takeover by for-profit charter organization


The district has remained challenged and now faces a takeover by a for-profit charter management organization. If that occurs, it could be the first school district in the country to be operated by such a company.

The Chester Upland story is the subject of this post by Carol Burris, a former New York high school principal who serves as executive director of the Network for Public Education, a nonprofit group that advocates for public education.

Burris was named the 2010 Educator of the Year by the School Administrators Association of New York State, and in 2013, the National Association of Secondary School Principals named her the New York State High School Principal of the Year. Burris, who opposes charter schools, has been chronicling the charter movement for years on this blog.

By Carol Burris

Since the covid-19 pandemic began, forces for school privatization — including the Center for Education Reform, CATO and other libertarian organizations, and Education Secretary Betsy DeVos — have used the physical closing of schools to make the argument that parents should be able to shop with tax dollars among public and private educational options.

We have seen this playbook before.

Former education secretary Arne Duncan claimed that Hurricane Katrina in 2005 was “the best thing that happened to the education system in New Orleans” by turning that school system into a patchwork of charter schools that open and close, run by no less than 38 different private entities. (He later apologized for saying it.) Following Hurricane Maria in 2017, privatizers started disassembling Puerto Rico’s public school system by closing down schools and “reimagining” the system with the help of DeVos.

It is no surprise, therefore, that during the covid-19 pandemic, a small, struggling school district in Chester, Pa., finds itself on the brink of having its pre-K to 8 schools run by a for-profit charter management company known as CSMI.

In May 2020, Delaware County Court of Commons Judge Barry Dozor directed the school district to “move forward with proposals to outsource the management of its schools” to charter schools, citing the financial crisis caused by covid-19 as putting additional financial stress on the district. That plan — unprecedented in Pennsylvania — set into motion a process for securing proposals, which will continue through the fall of 2020.

Dozor did not come up with the idea that charter schools should take over the district; rather, he echoed the local charter school’s plan. CSMI’s charter school, Chester Community Charter School (CCCS), first proposed the idea last November. According to this report by Maddie Hanna of the Philadelphia Inquirer, CCCS asked the Delaware County Court to order the district and state to seek proposals to allow charter schools to educate all of Chester Upland’s students, from pre-K through eighth grade.

According to Hanna, “the charter did not ask that it be the only operator considered, but its management company [CSMI] said it is positioned to expand if the court moves ahead with the plan.”

Chester Community Charter School and CSMI

Chester Community Charter School (CCCS) first opened its doors in 1998, just a few years after the school district found itself in financial distress. Vahan Gureghian, a Pennsylvania lawyer who runs a billboard company and is one of the state’s top Republican donors, owns CSMI, the for-profit management company that helped open Chester Community Charter School. Although the charter school began small, it now educates about half of the district’s students. Despite its growth, its academic record is dismal.

CCCS students perform worse on standardized tests than students at several of the Chester Upland public schools. “This is the charter whose test scores have been below those of several district-run schools, ever since it was cited for cheating on said test scores,” said Chester resident Will Richan, “[cheating] not by one or two rogue teachers but across three grade levels.”

Maura McInerney, legal director of the nonprofit Education Law Center (ELC) said she is concerned that students may be forced into attending lower-performing schools.

“Publicly available data discloses that children served by Chester Community Charter School exhibit lower achievement scores compared with most [Chester Upland] District schools in all categories of PSSA [Pennsylvania System of School Assessment] testing in math, English language arts, and science. The 2019 profile score for CCCS (40.7 percent) is significantly lower than that of other district schools,” such as Stetser (66.5 percent); Main Street (55.5 percent), and Chester Upland School of the Arts (56.4 percent).”

The Philadelphia Inquirer referred to the move as “unprecedented,” noting that Barsz’s reappointment to a third-term by Dozor was made over the objections of the Pennsylvania Department of Education. Barsz was then replaced by the same Republican judge in the middle of his term (because, the Inquirer reported, Barsz wanted to expand his accounting firm). The latest in a string of receivers is the recently retired superintendent of the Chester Uplands District, Juan Baughn.

Profiting from charter schools

To understand why Chester Community Charter School and its for-profit parent company, CSMI, are so interested in taking over the beleaguered schools, one needs to understand how lucrative being a charter management organization (CMO) can be in the Commonwealth of Pennsylvania, where there are no limits placed on what the CMO can charge.

In 2014-15, state data showed that CCCS had the highest administration expenses of any charter school in Pennsylvania. With total expenditures just shy of $56.6 million, over $26.1 million, or 46 percent, was spent on administration, while $18.8 million, or 33 percent of total expenditures went toward instruction.

This is not only true for CSMI’s Pennsylvania charter school, however. With the help of federal Charter School Program dollars, Van Gureghian extended his reach into neighboring New Jersey, again setting up shop in poor, financially stressed predominantly black districts — one in Camden New Jersey (since closed) and another in Atlantic City. The administrative costs of these CSMI charters were among the highest in that state.

The fiscal crisis of Chester Upland’s public schools

It would be difficult to find a more underfunded district with more challenges than the Chester Upland School District, which has been in financial trouble for years. In 2012, its teachers agreed to work without pay, although in the end, the state intervened, allowing them to be paid. A few years later, however, a crisis returned when the state legislature could not agree on a state budget, thus delaying state school payments to public schools. The 2015-16 school year began with teachers coming to work without knowing when or if they would receive a salary.

It would also be hard to find a district that serves a more disadvantaged student population. According to the district’s recovery plan, every student in the district (100 percent) is eligible for free lunch, 89 percent of the students are black, and 4 percent are Hispanic. Twenty-two percent are students with disabilities.

Financial mismanagement is partly to blame for the district’s fiscal woes — with inadequate revenue, there were years when the district spent more than it took in. However, the drain of district funds to charter schools, especially CCCS, has put the district on a death spiral.

The Bethlehem School District analyzed the proportion of operating expense funds that flow to districts. Number 1 in the state was Chester Upland, with almost 47 percent of funds leaving the district for charter school tuition. You can find the results of that analysis here. This compares with about 30.5 percent of the budget of Philadelphia public schools, 11.5 percent of Bethlehem’s funds, and an average rate across the state of 3.7 percent.

At first glance, it might appear as though 47 percent is a savings given that 60 percent of the district’s elementary students attend Chester Community Charter School. However, it is important to keep in mind that the education of elementary students is far less expensive than that of high school students who need laboratory sciences, specialized courses, guidance counselors, and extracurricular activities such as sports. Chester Community Charter Schools is only interested in educating the district’s K-8 students.

There are, too, differences in which students the charter school educate.

According to McInerney, who is representing parents opposed to the charter takeover, CCCS has a track record of poorly serving students with the most significant disabilities. In an email correspondence. she noted that “during the 2017-18 school year, while 11 percent of students with disabilities at Chester Upland School District were students with autism, the percentage of students with autism at CCCS was only 4.3 percent.”

“In addition, CCCS was cited for noncompliance by the Bureau of Special Education in 2016,” she wrote. “These citations related to core requirements for educating students with disabilities, including (1) the failure of IEPs to be reasonably calculated to enable a child to advance appropriately towards annual goals and (2) failure to educate children in the least restrictive environment.”

The special education funding formula for charter schools in the state incentivizes charters to take the least disabled students because the school receives the same amount for every special education student, regardless of the severity of the disability.

The pattern of charter schools having fewer students with more severe disabilities is found across the state according to a June 2020 report by Education Voters of Pennsylvania, which used Chester Upland as an example of how wide those disparities are. At the same time, the law does not require that all special ed funds be spent on the student; therefore, extra dollars can be spent any way the charter schools decide to support its program.

Can this distressed, underfunded district survive?

One would think the Chester Upland School Board, although it has little authority in receivership, would nevertheless advocate for the independence of the school. That assumption would not be correct. School board president Anthony Johnson has stated that he wasn’t troubled by the for-profit status of the Chester Community Charter School’ management company and that he was open to charter expansion.

The recent appointment of Carol Birks as superintendent also signals the board’s interest in allowing charter expansion and governing control of the public schools. Birks made it clear that she believes parents have the right to choose between charter and public schools and that she has “no preference.” (Birks’ contract was bought out by the New Haven Board of Education for $175,000 after a year and a half in the position of superintendent. The small, cash-strapped Upland District negotiated a salary of $215,000 a year, placing her among highest paid superintendents in the Commonwealth of Pennsylvania.)

Despite all of the challenges, maintaining a public school system in the district has its advocates. Last December, the Education Law Center, along with the Public Interest Law Center, intervened in the case both on behalf of Parents of Chester Upland School District as well as the Delaware County Advocacy & Resource Organization to challenge the CCCS petition to include charter school conversions to become part of the district’s recovery plan.

A proffer of witness testimony outlined by the law center at hearings included testimony from parents who want their children to attend the district schools which they describe as more accountable, as well as providing better services to their children, particularly those with disabilities.

The story of Chester Upland is a cautionary tale of what occurs when public schools are financially abandoned, and charters are allowed to swoop in, placing such an enormous financial strain on the schools that a disastrous downward spiral begins.

McInerney summed it up this way: “Chester Upland School District is a stark example of the high cost of inadequate and inequitable school funding and the disproportionate impact of underfunding on students of color. It needs significant investments and support from the state to effectively serve the significant number of students living in deep poverty who have been harmed by entrenched underfunding and horrific deprivation of basic school resources. Instead, conversion to charter control is being pursued as an ‘out’ when we should focus our attention on creating a sustainable path to local control.“



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