Jake Jacobs: Time to End Tax Breaks for Charter Schools and The Ultra-Rich
Jake Jacobs notes one of the troubling members of the Biden education team, and the oft-forgotten policy that makes charter schools such a lucrative investment.
The same day he nominated Cardona, Biden rehired Reed as deputy chief of staff, despite pre-emptive protest from progressives. Alexandria Ocasio-Cortez and the Squad cited Reed’s past hostility to safety net programs like Social Security. A former top advisor to President Bill Clinton, Reed’s own bio touts his oversight of the 1996 welfare reform law, the 1994 crime bill, and the Clinton education agenda.
In 2014, while serving as CEO of the Broad Foundation, Reed made worrisome comments to Hillary’s education advisors, suggesting in private that whole cities could be mass-charterized in the wake of natural disasters, calling New Orleans an “amazing story”. Reed also voiced support for personalized digital learning using the Summit Charters model.
TAX BREAKS FOR CHARTERS: Even after watchdogs exposed significant waste and fraud in the charter school industry, hardly any notice was paid to federal tax credits for investors of “nonprofit” charter school construction and financing as public schools struggle for resources. One such program, the New Markets Tax Credit (NMTC), did make it onto Biden’s web page, showing he wants to expand the credit to $5 billion per year and make it permanent.
It might not be controversial to dangle a seven year, 39% tax refund before wealthy investors to start caring about neighborhoods in dire need of manufacturing and low-income housing, but why does the NMTC favor charter schools over traditional public schools which are literally crumbling on our heads?
I tried to find whose idea it was to include charter school construction, financing and leasing deals in the NMTC.
The program itself traces back to 1998 when a “membership organization” called NMTC Coalition, comprised mostly of banks, investment funds, developers, LLPs and LLCs came together under the management of Rapoza Associates, a large DC lobbying and government relations firm who supplies policy briefs and “comprehensive legislative and support services to community development organizations, associations and public agencies”. Sound a little like ALEC?
Legislation was championed by then-Speaker Denny Hastert and fellow Republican Texas Rep. William Archer. The program was signed into law by President Clinton and went live as part of the Community Renewal Tax Relief Act of 2000. It appears charter schools weren’t included until 2004. The California charter nonprofit ExEd claims to have “pioneered” NMTC charter financing deals, boasting of dozens under their belt. By 2017, more than $2.2 billion in NMTC allocations were deployed to expand charter schools nationally.