Whitmire: L.A.’s $490 Million Charter Push and Crunching the Costs of Improving a City’s School System

Let’s say you have an urban school district with 640,000 students where tens of thousands of them are stuck in low-performing schools.

Now throw in a revolving door of superintendents unable to make a dent in student performance, a powerful teachers union dug in to oppose meaningful remedies, and a bitterly divided school board that can’t settle on solutions.

Unfortunately, this is not a hypothetical: We’re talking about Los Angeles Unified, of course.

Now suppose you have a billionaire philanthropist steeped in education reform battles who proposes to join with other L.A. philanthropists to create a $490 million fund to open up roughly 260 new charter schools – enough to bring the ratio of traditional-to-charter schools to a roughly 50-50 balance.

That, of course, is exactly what philanthropist Eli Broad and allies recently proposed to do. It’s far from a done deal, only a draft document, but considering Broad’s track record betting against it would be unwise.

For a moment, step aside from the colorful reactions from L.A. Unified Board President Steve Zimmer (it’s a hostile takeover plot!) and union chief Alex Caputo-Pearl (It’s a plot to destroy the union!).

In truth, Broad’s idea can best be described as modest.

Washington, D.C. has a roughly 50-50 mix of charter and traditional schools and is universally cited as a model reform city. The two sectors have good synergy, with progress on both sides.

The charters there are doing a better job with the city’s poor and minority students, which leads to calls to increase their numbers in the impoverished 7th and 8th Wards. That discussion, however, has more to do with capacity (Can the charters really do that?) rather than takeover plots.

If you weigh the merits of the Broad plan by examining charter-traditional student outcome data in cities such as New Orleans, Denver, New York, Washington, Boston, and, yes, Los Angeles (where charter students gain the equivalent of an extra 50 days of reading instruction each year; 79 in math), the Broad plan has obvious merit.

But that’s not the real question about L.A. Far tougher than the political reality is this real-world question: Can it be done? Or, put more bluntly: What can money buy – and just as importantly, not buy — in the way of high-performing charter schools?

At first glance that sounds like a pretty dull question, one that only accountants would relish. But when I bounced it off some of the nation’s top charter funders/entrepreneurs from different parts of the country — on background, to keep them out of trouble — the answers I got back were anything but dull.

One candid charter philanthropist put it this way: Most charter expansion challenges have a specific dollar value. So yes, money matters.

Consider just one of many unexpected expenses that can instantly knock a new charter operator out of commission: fire inspectors. “In our city,” said the funder, “fire inspectors are a strange breed of creatures who seem to devote their lives to stopping charters from opening.”

The solution: Hire a fixer who knows somebody who knows somebody in the City Hall fire inspector’s shop and have them explain, in the nicest of terms, that charter schools tend to be, well, pretty decent, law-abiding citizens. No threat.

No bribes got exchanged, just a dose of intense “social intercourse,” and suddenly the fire inspection red flags got turned into green flags. Fixers — OK, let’s call them by their real name, lobbyists — don’t come cheap. But they get stuff done. Again, most charter expansion problems have a price tag.

Same goes for key state legislators who get jittery after the 10th school superintendent comes to chat. In many states, school superintendents, often the biggest employers in town, are Soviet-style hiring gods and goddesses. Competition from charters is not their preferred business model. Hard to blame them.

Again, this takes fixing, and not just visits from earnest would-be charter school parents, many of whom long ago got gerrymandered into all-minority districts. Again, this takes lobbyists.

When it comes to the long list of local and statehouse politicians who can hold up charters merely by raising a pinkie during a closed-door committee hearing, you can pretty much double and triple that lobbying budget.

Now let’s talk about the more traditional charter startup expenses: Location, location, location. In any big startup, real estate is the elephant in the room.

How expensive can that be? In places such as New York and L.A., astronomical. A 500-student charter elementary school may cost 5 to 8 times less than what it would take to build a traditional school, but that still doesn’t make it cheap. And the taxpayers aren’t footing the bill.

In California, a new charter elementary school costs between $15,000 and $20,000 a seat: translation, between $7.5 million and $10 million. The same per-seat cost for a charter middle or high school will run between $20,000 and $25,000. The most expensive charters to underwrite are those that prefer to build one grade at a time, thus postponing the full per-pupil revenue from the state.

In theory California’s Proposition 39, which forces school districts to turn over unused school space to charters, helps alleviate that upfront cost. But the operative word there is ‘forced.” It doesn’t always happen. Plus, the unused facilities often prove to be the worst of the worst.

Here’s where the philanthropy money is huge (About $280 million of the $490 million Broad proposal would go toward facilities.) The importance of the facility money goes far beyond building that first school, especially for charter operators expected to expand quickly.

“It means they can spend less time worrying about building the next school and more time worrying about running the schools,” said one major funder. Just like in the credit card ad, that falls into the “priceless” category.

Now the tougher question: What can’t money buy?

The single biggest challenge in launching 260 new charters is finding, training and supporting 260 great school leaders, along with the platoons of assistant principals that accompany them. It’s not that money can’t help: KIPP, probably the best charter network at talent development, has been operating in L.A. since 2003, running 13 schools educating nearly 5,000 students. KIPP’s current growth plan in L.A.: expand to 20 schools serving 10,000 students by 2020.

To prepare a new principal, KIPP puts them through a one-year fellowship program. Cost: $130,000 to recruit, select and train candidates who will be opening a new KIPP school. For a lower cost, KIPP also provides on-the-job training for teachers and assistant principals interested in becoming principals. That adds up — quickly.

Here’s the dilemma: Nobody does this better than KIPP. Can the scores of other charter groups step up their school leader recruitment/training programs fast enough while matching KIPP’s quality? There’s reason to be skeptical.

Finally, the biggest item money can’t always buy is what is euphemistically dubbed “advocacy.” Roughly speaking, it means fighting the fight. Launching as many as 260 new schools, with roughly 500 students per school, means thousands of parents need to step up and demand them.

True, there are considerable waiting lists to get into L.A. charters. KIPP alone has a wait list with 1,000 parents. But that’s not nearly enough. Consider the opposition: Superintendents with an unlimited capacity to stuff backpacks with missives telling parents charters aren’t needed; teachers who tell students they might lose their jobs as a result of the charter surge; union leaders who complain that charters are out to “privatize” public education and urban middle class parents who fear disruptions in their high-performing enclave schools.

Last, but definitely not least, you have the lefty progressives who dislike any school models beyond government-run traditional schools and embrace the union “privatization” theory (usually from the safety of their pleasant suburban school district).

So, can Eli Broad and his band of philanthropists make L.A. look like D.C.? Money will take him a long way toward that goal: Roadblocks do have price tags, but not all. In the end it will turn on parent demand and charter school talent development carried out flawlessly at an unprecedented rate.