Charter group joins reform push
The Arizona Charter Schools Association has joined a growing list of education advocates and elected officials calling for greater oversight of the state’s 500-plus charter schools.
Charter Association CEO Eileen Sigmund told The Arizona Republic that when lawmakers convene in January her group will push for more financial transparency, including disclosure of executive pay, and improved governance of charter schools.
She said, however, that the association would take a “hard line against hostile regulations that will either hurt or eliminate our charter sector.”
Sigmund said her association is working with the Legislature, Gov. Doug Ducey’s office, Attorney General Mark
Brnovich and charter leaders to identify reforms that protect taxpayers.
The association’s call for reform is significant given the organization’s influence with Ducey and the Legislature’s Republican majority. The association’s board and members include business and political leaders with close ties to the governor and other Republican leaders.
Democrats have for years unsuccessfully proposed increased financial oversight of charter schools, as well as requiring them to comply with public records and open meetings laws, and state procurement regulations.
But the political climate has shifted in response to an Arizona Republic investigation that has detailed how some charter school owners have become millionaires operating the publicly funded schools. Operators have enriched themselves through no-bid management and construction contracts. And state Rep. Eddie Farnsworth, R-Gilbert, stands to make millions selling his Benjamin Franklin charter chain’s school buildings to a related business he created.
Sigmund says she doesn’t endorse “the financial activities that may have occurred.” But, she added, there is nothing wrong with charter school operators making a profit because many have taken “significant personal and professional risks” to start their schools.
“It’s a good thing they are financially incentivized,” she said.
Brnovich was the first high-profile Republican to call for changes after The Republic reported that Primavera online charter school founder Damian Creamer had paid himself $8.8 million despite having the thirdhighest dropout rate in Arizona.
Brnovich said current state law impedes his office from fully investigating charter schools because the Legislature has exempted charter schools from procurement and conflict-of-interest laws that traditional district schools are subject to.
Following Brnovich’s call for reforms in early September, Ducey changed his position. The governor in August had said he wasn’t concerned about executive pay at charters, including Primavera. But after Brnovich criticized Creamer’s pay, Ducey said he would back Republican state Sen. Kate Brophy McGee’s plan for charter reform.
Brophy McGee is in a tough re-election race against Democrat Christine Marsh, a former Arizona teacher of the year. Ducey and Brnovich also are seeking re-election.
Brophy McGee’s plan calls for charters to comply with the same procurement and conflict-of-interest laws that govern district schools. She also said private charter-management companies, which are not subject to the state’s public-records laws, should be required to disclose their spending of public money.
Democrats have said Brophy McGee could have helped push through their charter reform plan this year or in prior years, but she instead joined her fellow Republicans in killing their bills.
They said Brophy McGee and other Republicans only are calling for changes to charter schools because of a public backlash over charter school operators’ large profits.
Sigmund isn’t going as far as Brophy McGee. Sigmund said most charter schools are non-profits that disclose some executive compensation and that information should be included in annual audits submitted to the state Charter Board.
Sigmund also said charters should be more transparent about related-party transactions — business deals in which insiders financially benefit from relationships with a charter school.
The Grand Canyon Institute, a centrist Arizona think tank, last year found 77 percent of charter schools engaged in related-party transactions involving their owners, board members or relatives. The institute concluded the state’s regulatory system failed to ensure that tax dollars given to the schools are primarily used for the education of students.
Sigmund also said boards of directors for charter schools should be trained in independent governance.
Charter operators appoint board members, and some appoint friends or family members who have approved business deals that benefited owners.
The public elects board members in school districts, which provides additional, independent oversight of district schools.
Sigmund said her association has in the past convinced the Legislature to make positive changes for charter schools. She said her group was successful this year in getting lawmakers to give more authority to the Charter Board to shut down financially failing and mismanaged charter schools.