Satisfying the Satisfied: DC’s Brave New FY21 Budget

By proposing a 3% increase in the uniform per student funding formula (UPSFF) in her post-COVID FY21 budget, Mayor Bowser is pulling off what appears to be a heroic effort in a terrible economic crisis: ensuring some increase in school funding, albeit not at the level previously proposed (a 4% UPSFF increase).

Ensuring reasonably stable funds for schools is important, now more than ever. Expect to hear a lot more about this proposed budget at the upcoming (invite-only!) DC Council education budget hearing next week on June 4–for more information, see here and here. (Essentially, if not personally invited, you can leave a 3-minute voicemail or provide written testimony by June 23. Good luck.)

Unfortunately, absent other things, the 3% UPSFF increase is not unmitigated good news. In fact, some items in the budget appear to be fulfilling a wish list, while there appears to be little, if anything, to directly and specifically address the deep challenges ahead for our schools, much less acknowledge built-in inequities.

Upshot: The proposed FY21 budget appears designed to satisfy the satisfied.

Take what’s not actually in the budget but informs it: a decision to not raise taxes on the wealthiest in DC. By refusing to ask that DC’s wealthiest pay more as the majority of her citizens struggle, the mayor has essentially balanced the city’s books by betting on future revenue, along with a healthy drawdown of the city’s reserve funds. That may work–but it’s a gamble that plays directly with the fortunes of the poorest in our city, in an apparent bid to satisfy the (wealthy minority of) people who appear to be the real DC decision makers. (See here and here and here–and also here–if any doubts linger as to who really calls the shots in our fair city.)

As it is, no discussion of DC’s education budget can avoid the fiasco around DCPS’s refusal of Head Start funds, which has resulted in millions less for DCPS schools most in need (despite protestations otherwise), while potentially allowing the less-than-desirable conditions identified by Head Start at those schools to fester. One of those conditions was the lack of support to principals to ensure Head Start programming was appropriately rolled out. That now comes with the firing of principals at some of those schools (Boone, Kimball, Simon, Burrville) for refusing to use a programmatic outline, Relay, that is, well, frightening to see in action.

(I know, I know, how could an elementary school program for young children be frightening?? See here for 7 minutes that you cannot unwatch–and then ask the likelihood that any white student anywhere in DC will ever be made to do this in any school he or she attends, public or private. Yeah.)

While relatively generous with its UPSFF increase, the budget also contains little if anything to specifically address how schools can re-open or what the budget will do to secure it (or the schools themselves). And while recent lottery data suggests persistent underfunding of DCPS, the budget does nothing to address that and mentions nothing of loans some DC charter schools got from the federal government (which us unwashed masses cannot even know about). Even digital equity, a much smaller and more targeted ask, seems unclear, despite a vague promise of money. And there appears to be no money to implement social distancing in schools of the sort envisioned by the re-open committee.

Indeed, the only thing that one could construe in this budget that might address the pandemic in schools is a provision for charter school co-location in underutilized DCPS schools.

But that’s MY read in light of the need for social distancing, not something mentioned or addressed explicitly anywhere that I could see. Certainly this roll-out of co-location raises many more questions and concerns than it could ever address WRT social distancing. Moreover, because social distancing has thus far not been on the charter school wish list here in DC, one can reasonably assume that this provision has nothing to do with the pandemic and is simply a way to put facilities into charter hands (without the messy public getting in the way, naturally).

The rejiggered FY21 capital budget also contains a few, somewhat expensive, surprises:

–$80 million for a new Bard high school (at the address of Ward 8’s old and empty Malcolm X elementary building at 1351 Alabama Ave. SE, which was in terrible shape more than 10 years ago and will now be renovated, per recent DCPS budget responses to council);

–$54 million to create a new elementary in Ward 3, by way of rehabbing the old Hardy school (now dubbed Foxhall elementary), which like Malcolm X was never put up for charter RFO;*** and

–A $1.9 million allocation for Excel’s space at the Birney school, which the mayor announced would be the new permanent home of Excel–without explaining how the leaseholder, the wealthy, private, and well-connected Building Hope (aka the Charter School Incubator Initiative, or CSII), and individual charter schools would figure in that expenditure and plan and what that $1.9 million is actually being used for.

Yet, as disparate as these budget pieces are, together they seem to form something like a plan:

–Put into place proscriptive (and expensive!) behavioral-based programming for Ward 7 and 8 schools with high percentages of low-income African-American children;
–Fire the people who oppose it (and, apparently, ignore the folks who cannot be fired);
–Lose needed money and staff at those same schools, which also suffered from problems regarding failed implementation of Head Start;
–Co-locate charters in those schools and others like them, while publicly providing no metric for determining what schools have co-locations; what charters get what space; the duration of the arrangements; and who even negotiates the terms of the leases (and to whose benefit);
–Have no specificity in addressing the digital divide except through a private group privately selected and pursuing private solutions in private;
–Fund an expensive renovation of a selective school in Ward 8, while creating a new school in Ward 3, the ward with the second fewest number of students (but the wealthiest!);
–Have very important people, many of whom have no connection to DC public schools, recommend actions for re-opening that are essentially unfunded (and possibly unfundable); AND
–Mention no plans for the newly empty Washington Met or the soon-to-be empty Banneker–and keep details of other buildings that are mentioned, like Birney, to a minimum.

What’s fascinating about this, well, plan is its built-in look of equity: You have money in every ward and every school, with a lovely 3% raise all around, renovations in many quarters, along with vague noises about digital equity and new digs for a selective school in Ward 8. Charters advocates are happy, DCPS gets a bone or three, it’s all good, yay!

And yet: Relay continues, the principals at schools with highly vulnerable students are gone, (unacknowledged) inequities continue–and we do not have a way forward for our schools for the fall.

Amazingly, while that plan transpired (remember, during a pandemic!), the DC council approved more than $128 million (!) in DC revenue bonds for four charters on an emergency basis (the emergency in this case being COVID-19). They are LAMB ($37 million); Meridian ($7.5 million); Two Rivers ($50 million); and DC Bilingual ($34 million).

Now, it’s understandable that charter schools want to look after their interests, but that’s a lot of revenue bonds under any circumstances, and we’re in a pandemic that has an associated (and rather large) economic crisis.

(Not to mention that hundreds of thousands of DC residents are going without food; income; schooling; internet access; protective gear; COVID tests; medical attention; and housing, as new schools and expanding ones in DC are having a hard time filling their seats.)

The irony here is that on at least a dozen other occasions in the last 15 years, council legislation for DC revenue bonds for DC charters has been introduced and approved on–wait for it!–an emergency basis.

While we had no pandemic.

And no economic crisis.

(Remember the “emergency” in late 2017? Yeah, neither do I–but apparently the council responded to it, by helping KIPP access DC revenue bonds.)

In other words, that same council (which decided to meet this year on Emancipation Day without public notification and which has also decided to hold an invite-only public hearing on the budget (June 4!)) has now decided that COVID is a good excuse for passing legislation to enable charter schools to expand real estate.

So it appears that elected officials in the Wilson Building–from the mayor on down–have taken a stand for unity, by putting forth plans for our schools without much public input (much less public desire) and with an apparent belief that more than protective gear, food, shelter, testing, and basic preparations for school social distancing, DC citizens need–wait for it!–more charter school facilities and seats.

Priorities.

To be sure, DC revenue bonds seem rather benign, because they don’t oblige DC fiscally to their being paid off. Think of them as a way for charters to access low-cost loans they might not otherwise be able to get. The schools are 100% responsible for paying off those loans.

But the jury is out on what revenue bonds actually mean for DC’s education funding overall, inasmuch as most of the funds for those schools (and the paying off of their revenue bonds) come from DC taxpayers.

So while a charter school’s expansion of its fiscal obligations through revenue bonds may (or may not) work out, the people left holding the bag (or empty building or lost seats) are inevitably DC taxpayers, who often do not get a real clear picture of (or return on) that investment.

Recall that not that long ago, Chavez took out DC revenue bonds to, among other things, renovate its leased city-owned school building at 770 Kenyon St. NW. Closing its middle school there (remember: without involving staff or families in the decision!) resulted in financial losses, such that Chavez eventually defaulted on those bonds.

But the new bonds that Meridian is getting are to renovate the same building.

Essentially, through the (easier) money of DC revenue bonds, DC taxpayers are subsidizing another renovation of the same, city-owned building in a short period of time, through charter facilities fees to Meridian.

And the public has no say in any of it.

So it is that our charter schools take risks with revenue bonds–but that risk is almost entirely underwritten by DC taxpayers, who not only have no say in it, but in the case of Meridian don’t even have a publicly available lease (well, at least I couldn’t get it back in February–though since the mayor is intent on re-opening our city, maybe FOIA will actually have a deadline once again in DC).

In the meantime, the benefits accrue to the schools themselves:

Recall that Chavez hoped to “monetize the asset” that was its lease of that (city-owned) property, with Meridian presenting a winning bid for it that included $2 million in cash, without taxpayers knowing at all how much of that winning bid was going toward paying off the remaining $22 million of Chavez’s revenue bonds (versus profit for the school)–nor even whether a new lease for the city-owned asset would provide better return on investment for taxpayers, as Meridian hinted it would merely assume the same lease terms Chavez had.

[Confidential to DGS, the city agency in charge of all leases of former DCPS schools: I think this scenario is called privatizing gains and socializing losses. Have you heard of it? Asking for 700,000 friends.]

All of this leads to the whole wish list aspect of the mayor’s proposed FY21 budget:

Recall that in December 2019, the executive director of the charter board, Scott Pearson, testified before the council on the master facilities plan. In that testimony, Pearson mentioned a list of empty DCPS buildings that charters could use, including

Davis
Winston
Banneker’s current (soon to be vacated) building
Emery
Garnet-Patterson
Meyer
Kenilworth
Wilkinson
Spingarn
Malcolm X

Most of these former DCPS schools are not listed anywhere in official documents–not to mention that Washington Metropolitan’s building, newly empty, is also MIA. (See, for example, the newly released DCPS budget responses here–the only buildings on that list mentioned are Davis, Meyer, and Kenilworth.)

But now, to the rescue, is the FY21 budget!

For instance, the mayor’s budget plan explicitly mentions Wilkinson. Long closed as a DCPS elementary and housing the DC infrastructure academy, it would be taken away from DCPS officially and made available for charters.

The academy itself would head over instead to DCPS’s closed Spingarn (now infamous for a video of its dilapidated and abandoned interior), which would also house a charter school in a manner in which absolutely no public discussion has ever taken place.

But here’s where this planning gets really good (well, if you are a private interest in it):

Wilkinson itself would not exactly go up for charter RFO. Here’s the wording in the budget support act (boldface mine):

“The Mayor may give the right of first offer to purchase, lease, or otherwise use the former Wilkinson Elementary School building to a charter school facility incubator that leased, or a public charter school that occupied, all or a portion of the former Birney Elementary School building as of October 1, 2020.

“Sec. 4093. Section 1 of An Act Authorizing the sale of certain real estate in the District of Columbia no longer required for public purposes, approved August 5, 1939 (53 Stat. 1211; D.C. Official Code § D.C. Code § 10-801),” is amended by adding a new subsection (b-6) to read as follows:

““(b-6)(1) The public hearings required by subsections (a-1)(4) and (b-2) of this section shall not be required for the disposition of the former Wilkinson Elementary School . Instead, for such real property, the Mayor shall hold at least one public hearing on the finding that the real property is no longer required for public purposes and to obtain community input on the proposed disposition of the real property before submitting the proposed surplus resolution and proposed disposition resolution to the Council under this section.””

Thus, the budget support act appears to allow a swap of the (privately lucrative) lease that Building Hope (aka CSII) has on Birney, allowing that organization to assume the lease for Wilkinson–presumably out of any public process or discussion provided for in the law. (NB: Jennie Niles, a charter school founder and the former deputy mayor for education, sits on the board of Building Hope. It’s not a coincidence–remember her work to keep education meetings secret?)

As you may recall, Birney was leased for decades to CSII, and Excel was paying CSII to rent the school that once had been a DCPS school and is still owned by DC. With the Excel lease at Birney, DC was paying CSII about $200,000 above what CSII was paying DC to lease Birney, or about $900,000 annually. Not to mention that CSII was also making money at Birney from subleasing a section of the building to Lee, another charter. (Nice work if you can get it!)

Now, with Excel being announced permanently at Birney, there’s an open question about what the $1.9 million allocated for it in the capital budget is really for: renovations or paying off CSII to break its lease with the city? The DCPS budget response hints at the latter, where it mentions on p. 20 “payment for Excel lease through Paygo.” Recall that the original lease for Excel with CSII (linked above) was paid for by DGS, not DCPS.

Then, too, there’s an open question as to what DC Prep will do at Birney. Recall that DC Prep said it would locate its middle school at Birney this fall. Indeed, My School DC lists Birney as the address for DC Prep’s middle school–but while DC Prep in March 2019 signed a lease with CSII to be at Birney, the public has been barred from seeing that lease until the school actually locates there. Of course, that hasn’t yet happened and, for all anyone outside the Wilson Building knows, may never happen, except that DC Prep has an in with the budget support act to get a lease of some sort at Wilkinson by way of its publicly unseen (yet apparently effective) lease for Birney.

So it is that the deal around just this one elementary building, Wilkinson, appears extraordinarily fruitful for private interests:

–CSII may get a long-term lease there to sublet to charters;
–Excel has a permanent home at Birney, whose cost is publicly unknown but may benefit a private group;
–CSII may still hold a Birney lease for terms publicly unknown;
–Someone (CSII? DC Prep?) will hold leases for Wilkinson, in a manner that will be (by the magic of a changed law!) almost entirely out of public sight;
–The terms of those leases will be almost completely out of public sight until the school(s) are there, and even then only through FOIA, which is currently under a deadline of infinity; and
–DC Prep may still (or instead) exercise its real estate prerogative to build its middle school on property it purchased in December 2019 at 1619 Frankford Street SE (notwithstanding community opposition).

Not bad for private interests in just one city-owned building–and all through the magic of this proposed FY21 budget!

Indeed, that the mayor could deliver not only a 3% increase in the UPSFF, but also uncounted DCPS co-locations and TWO vacant DCPS buildings to charters during both a pandemic AND a budget crisis is truly amazing–which may be one of the reasons Scott Pearson himself congratulated her heartily when the budget was released the other week.

All of which of course leads naturally to the question: what other plans are being made for the rest of those closed schools enumerated above and currently “underutilized” DCPS schools?

In other words, the real winners here of Wilson Building budgetary heroics appear to be charter schools–but not just any charter schools.

Specifically, the real winners of this budget are schools that have the political sway to get revenue bonds and facilities, both in this swap as well as co-locations in DCPS schools. This budget thus advances consolidation of that power, and facilities to support it in wards 7 & 8–with more to come with Spingarn, in Ward 5, and any number of those officially unheralded buildings on the wish list above.

In the meantime, for most DCPS schools of right, and individual charters without a lot of political power, it’s just more of the same.

Equity, indeed.

[***Update 6/3/2020: Thanks to alert reader Mary Levy, here’s a correction: The total allocated for a new “Foxhall elementary” is $56 million. But that money is NOT to go to rehab Old Hardy, which is owned by DCPS. Rather, it is to build an entire new school building next to the Old Hardy building. If this seems rather profligate, considering that the lease a private school currently holds on Old Hardy will expire at about the same time as Foxhall would be built, think again: it appears to be Jelleff 2.0. See the Ward 3 council member’s letter about it here. What’s also in keeping with how deftly our mayor has divided and conquered is the fact that the $56 million is coming out of funds previously allocated to build additions at overcrowded Key and Stoddert elementaries–something the schools’ principals were apparently never told about until the new Foxhall school was announced.]

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