Amidst a Catastrophic Budget Crisis Louisiana Legislators Vote to Fully Fund a Charter Boarding School Forever

Should Louisiana start funding private boarding schools amidst a catastrophic budget crisis?

The vast majority of the Louisiana Legislature, including most of our fiscal hawks, believe we should. The Senate voted unanimously to approve HB and the House only registered two nays in approving HB887.

This bill now sits on John Bel Edwards desk; ready for signing.

(I will explain why I recommend calling your Reps and Senators to register your displeasure with their actions and to urge them to ask John Bel to veto House Bill 887.)

I would like to assume most of our legislators did not understand the implications of what they were doing when they voted to approve HB887.  I would like to think no one was aware of the larger backstory surrounding this EBR Charter boarding school called THRIVE – but I’m not that naive. Still, I have trouble believing most of our legislators understood the financial implications and shady dealings this school has already engaged in with taxpayer dollars.  Our legislature might have been overwhelmed by the lengthy session and compelled by the embellished feel-good story Thrive’s website and supporters are peddling – that THRIVE was envisioned and founded after one of Sara Broome’s students was killed.  (It was actually a student that went to a school Sara used to to teach at, one she “never actually had sit down had in her classroom” according to her own slickly produced Ted-talk on her “success” with THRIVE. (look at 2:45) However I agree, the way THRIVE and their supporters currently represent it sounds more dramatic and is a more efficient and effective use of a child’s tragic stabbing.)

Now that the dust is settled it’s time to fix what the legislature broke, and not just because we’re broke but because it’s the right thing to do.  It’s the right thing to do for our already heavily levied taxpayers; for the destitute critically ill patients that will die; abandoned elderly with no family left alive to care for them; abused children we can’t afford to watch or rescue; and disabled children who will lose basic support and education services.  These are groups who were told by this legislature that they would have to do without because “our state has a spending problem, not a revenue problem.”  The story of HB887 indicates this may very well be true.

Amidst all the draconian cuts to services for some of our neediest citizens (and unaffordable though overdue raises for state workers) THRIVE was given a blank check to run a school usually only associated with the uber wealthy, a boarding school where parents can dump their kids off while taxpayers pay for their every need.

THRIVE started with 20 students in 2012. Their stated objective is reaching 350 in the near future and 420 by 2020. (THRIVE’s last publicly available count is 110 from October 2015)  Prior to HB887, this school was already granted 5 million by the legislature to procure buildings for this endeavor.

• $1,000,000 through Act 15 of 2014 (general fund budget)
• $4,000,000 through Act 26 of 2015 (capital outlay budget)

While it appears this money was intended to have been used to procure buildings for domiciling resident students, and save on rental costs, the minutes of the meeting of the Board of Directors of THRIVE Baton Rouge dated November 5, 2015 indicate that THRIVE Baton Rouge sold all of its property to THRIVE Foundation, a separate non-profit, for “fair market value.” The same minutes of the Board of Directors of THRIVE Baton Rouge indicate that it leased back the same property that it sold to THRIVE Foundation.

These types of arrangements are common for charter schools operators like Charter Schools USA and National Heritage Academies (which also operate charter schools around our state.) This allows an operator to extract assets purchased with tax payer dollars, that would normally revert to the school district or state, for themselves.  This is done to generate enormous profits from non-profit charter school situations, by charging rents and fees for administrative services through a separate but affiliated and wholly controlled agent – usually at rates far above market prices.  As the enrollment of the THRIVE charter school has grown, so has its rent.  This is rent it would not have had to pay if it retained control of the buildings it purchased with enormous taxpayer outlays.  This “rent” paid by THRIVE Charter School goes into the coffers of THRIVE Foundation – a non-profit corporation that does not have an agreement to return assets to the state or school district (which is in addition to other funding it receives from MFP and private donors.)  Not counting private funding or endowments, THRIVE’s current estimated per pupil ratio is around 24,000 per student per year, more than twice MFP (what every other school district receives per student which is estimated at 11,000 per year by the legislator auditor documenting the relative costs of this bill.)

However, if we divide the 5 million dollars this school received in Acts 15 and 26, by the number of students this school has served throughout its entire existence, we get approximately another twenty thousand per student cost footed by the state.  Before we even factor in any other grants THRIVE has received from government programs, private donors and philanthropies THRIVE’s cost per student was already thirty two thousand per year. Now, with the state picking up the remainder of the tab, forever, the cost rises to over 40,000 dollars per student, per year, compared to a $11,000 cost to a traditional school district (largely made up of local and federal dollars.)  These excess dollars are fully covered by the State General Fund.

Almost all of our legislators approved this arrangement in House Bill 887 although you unless you are a researcher and accountant you might not understand the large, long-term financial implications from a simple reading of this bill.  To get those types of details you need to look at the Legislative Auditor’s fiscal notes and do some pre-Common Core math.

The auditors expect this program to cost, at a minimum, 8.3 million a year at 350 students, or closer to 10 million dollars at the 420 students THRIVE has indicated they want to achieve by 2020 in their PR handout.  According to the fiscal note that accompanied HB887, this bill actually creates a brand new State agency, and it expects the costs associated with complying with state laws and benefits will take this price tag (to state taxpayers) even higher (and are incalculable at this time.)  So while some legislators were trying to generate revenue or implement tax cuts to address our out of control budget spending, Representative Steve Carter of Baton Rouge was creating a new State agency that adds a minimum of 10 million dollars annually to the state budget. A legislature tasked with reigning in the budget virtually unanimously approved this 10 million+ dollar annual spending idea and sent it to the the Governor’s desk to sign – where it sits now.

Maybe this is what you elected your state Senators and Representatives to do, but I would guess that the majority of you did not expect them to write a blank check to create a private boarding school funded by state taxpayer dollars for all of eternity; a school that has no limits on how large it can expand or how high the price tag can ultimately be; a price tag that will be anywhere from 2+ to 4 times the money we spend on general education students.  I would bet you didn’t intent for legislatures to write 5 million in checks to a private organization so it could hand the assets bought with those dollars over to another private organization which could then charge a new State agency ever increasing rent, as THRIVE has done. The 5 million dollar mistakes are in the past.  This 10 million dollar mistake is in a future we can still change if we act now.

While some parents were pleading and providing tearful testimony about some of the cuts slated for them and their children with disabilities, some legislators were already scheming to re-inflate the budget for years to come; to insure private boarding schools would be paid for out of state coffers for a select few at extravagant costs to these same taxpayers.

Legislators like Republican Senator Ronnie Johns from Lake Charles lied to these parents with statements like “We hear you clearly, and I can tell you, you are our priority,” while at the same time demonstrating this is clearly not the case with his vote to create state funded private boarding schools. It’s kind of ironic in a way actually. . . creating boarding schools for parents to ship their kids off to are a higher priority that helping parents care for their disabled children at home (instead of institutionalizing them which will also cost the state much more money in the long run than helping these parents care for their children at home.)

I’d like to think this is just a story about how good people can be misled to do bad or stupid things.  Perhaps this is just another example of how our budget expands out of control and no one understands why?  Without a doubt, this is clearly an example of misplaced priorities; but we can fix this.

Please contact your state legislators and ask them to ask John Bel Edwards to veto HB887.  You can call John Bel’s office as well, but it’s important our legislators be made to fully understand what they did here. Their understanding is very important so they can be on guard in the future and so they don’t try to override the Governor’s veto.  As you can see below, they clearly have the votes to do so and legislators need to be told by their constituents how they feel about this legislation.