This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
A handful of private companies have banked more than $68 million from Utah taxpayers over the past three years. The money is delivered through no-bid contracts by people who don't work for government, but the companies are often connected to political officials.
An extensive examination of charter school spending by Salt Lake Tribune reporter Benjamin Wood shows several companies that exist only to contract with charter schools. While public schools have always contracted for some services, many charters go so far as to contract for their principals and teachers, providing undisclosed profits to the companies while shielding financial information from the public.
Under state law, the schools must be operated as non-profits, presumably to avoid people profiteering on public education. Charters that contract with for-profit companies for their largest expenses effectively circumvent that requirement. There is no way for Utahns to know how many of their education dollars are ending up as someone's salary or profits.
In the meantime, charters are slowly losing one of their most persuasive arguments: that they can educate students for less money than traditional public schools.
According to a report from the Utah Foundation released last month, Utah charters collect about 10 percent less per student than regular public schools, but they have cost advantages, too. They have fewer non-English speakers and economically-disadvantaged students. Add in the public schools' requirements to provide busing, to build inefficient rural schools and to provide such things as gang-prevention services, and the cost difference virtually disappears. Looking at test scores, charters track pretty closely to public schools on average.
In other words, there is no evidence the free-market capitalism allowed in Utah's charter school system is providing better results for students.
But it clearly is producing winners. One company that received more than $4 million last year is headed by the sister of the president of the state charter school board. Another company ($1 million from charters last year) is operated by a state legislator, and two others ($4.7 million and $4.5 million last year) are run by relatives of legislators. (Surprise! All three voted in favor of increasing charter school funding by $20 million last session.)
One of those relatives promised, "We keep it pretty separate."
How many charters operate this way? Hard to say, but it's not all of them. This isn't an argument for ending charter schools, but it is a system that begs for reform. Otherwise, the worst is yet to come.
Long before charters, there were non-profit entities providing K-12 education in Utah. They hired their own principals and teachers, and they still do. That is because there are no efficiencies in creating that second entity, but there can be profits.
And with profits come profit pressures. Some of today's charters look less like non-profit schools and more like for-profit proprietary colleges. They market on television and employ sales staffs. As charters become more common, competition for charter students increases. Expect to see these for-profit non-profits apply more sales pressure to prospective parents.
For the companies, the beauty of it is that the parents aren't spending their own money. It's cash siphoned from public education by politicians all too willing to see it as the fruits of the free market.
Caveat emptor, taxpayers.