Charter schools’ unexpected windfall: They got funds from two federal government programs; public schools only got from one
By Carol Burris and Greg Leroy
Kudos to the mayor, teachers and principals who worked so hard to bring New York City public school students back to school. Unfortunately, their tenacious efforts were poorly supported by the federal Coronavirus Aid, Relief and Economic Security (CARES) Act. New Yorkers knew there would be many extra expenses to open school safely — and the meager support Congress provided in the CARES Act didn’t help much. New York City’s public schools received $720.5 million — only about $720 a student. And even that small amount was taken away when Gov. Cuomo cut $717 million to NYC schools.
Not all NYC schools were shortchanged, however. Our investigation of the CARES Act’s funding streams revealed that the nearly 60% of charter schools in the city double-dipped, getting far more per student than public schools. Not only did charters get a share of the main CARES Act provision for schools, called the Elementary and Secondary School Stabilization Emergency Relief (ESSER) Fund. Because they are non-profit corporations, Congress also allowed them to receive forgivable loans under the Payroll Protection Plan (PPP).
Many New York City charters used their status as nonprofit corporations to apply for forgivable, low-interest PPP loans that were intended to save small businesses from closing. Why charters were eligible to get PPP funding is unclear; unlike conventional small businesses, their revenue never disappeared. They continued to get their pre-CARES Act taxpayer-funded revenue streams — plus formula-driven shares of the ESSER funding on top.
Overall, 159 New York City charter schools got between $99.9 million and $231.5 million through the PPP program directly, indirectly through their Charter Management Organization (CMO), or both.