Philadelphia is just the latest target:
Thanks to a little discussed law passed in 2000, at the end of Bill Clinton’s presidency, banks and equity funds that invest in charter schools and other projects in underserved areas can take advantage of a very generous tax credit – as much as 39% — to help offset their expenditure in such projects. In essence, that credit amounts to doubling the amount of money they have invested within just seven years. Moreover, they are allowed to combine that tax credit with job creation credits and other types of credit, as well collect interest payments on the money they are lending out – all of which can add up to far more than double in returns. This is, no doubt, why many big banks and equity funds are so invested in the expansion of charter schools. There is big money being made here — because investment is nearly a sure thing.
And it’s not just U.S. investors who see the upside of investing in charters. Rich donors throughout the world are now sending money to fund our charter schools. Why? Because if they invest at least $500,000 to charters under a federal program called EB-5, they’re allowed to purchase immigration visas for themselves and family members — yet another mechanism in place to ensure that the money keeps rolling in.
Proponents of education reform insist that investments like these are all about how successful charter schools are, and show how much support they’ve garnered in just a few short years. But it’s hard to take this on faith when there are billions of dollars of profit—and, for some, a path to U.S. immigration—at stake in these investments.
Philadelphia teacher Kathleen Melville of the advocacy group Teachers Lead Philly tells AlterNet that for market-dependent actors like these it’s all about finding “market-based approaches to funding education.” But she doesn’t blame private investors alone for the educational crisis the city now faces. “In Philly, another major cause of our budget crisis (and the resulting closings) has been education budget cuts in Harrisburg,” Melville points out. “Years of inequitable funding and neoliberal policy [have] led us to this point.”