Clock ticks on charter school reforms as Michigan House Dems prepare to lose majority

Democratic state lawmakers only have a few weeks left to pass legislation that would require more transparency—and more accountability—for Michigan’s charter schools.

MICHIGAN—With Republican lawmakers set to take control of the state House of Representatives next year, Democratic lawmakers are moving quickly to advance a series of bills they hope will hold charter schools more accountable for how they’re spending state funds.

The state Senate Education Committee last week voted to advance nine bills to the Senate floor that aim to mandate more financial transparency at Michigan’s charter schools—including by requiring them to open up their financial audits and individual expenditures to the public.

The legislation could ultimately shed light on how hundreds of Michigan’s charter schools are spending billions of dollars in state tax revenue, as well as deter shady business practices and ensure that Michigan taxpayers are getting a bigger educational bang for their collective buck.

But with only a few weeks left of this year’s legislative session, Michigan Democrats are quickly running out of time to pass the bills into law before Republican lawmakers take majority control of the state House of Representatives and put the kibosh on the long-sought state reforms. 

What’s on the table?

Five of the bills approved last week in the state Senate committee have already been passed in the state House and would likely be signed into law by Gov. Gretchen Whitmer, reports Chalkbeat Detroit. That includes two bills that would require all charter schools to publicly post their staff salaries, as well as the names of their authorizers and management companies. 

The other bills—including two that limit for-profit management companies from selling or leasing properties to charter schools they run—would still need to be approved in the state House. This legislation is designed to prevent charter schools from using taxpayer money to buy private property, only for its for-profit management company to turn around and sell it for a profit.

What’s the issue?

Last year, Michigan’s charter schools received more than $1.5 billion in state funding. But charter schools don’t have to play by the same rules as public schools when it comes to publicly reporting their financial information—including how much they actually spend on education.

What would you think if your school's superintendent was making $1,000,000 a year? I would not be okay with that. The for-profit companies that run Michigan's charter schools (EMOs) have refused to open their books for the past 30 years to let taxpayers know how much of our money… pic.twitter.com/LSqgELocVr

— Senator Dayna Polehanki (@SenPolehanki) November 18, 2024

More than 80% of Michigan’s charter schools are also operated by for-profit management firms. And in many cases, those firms set the prices and bill schools for just about everything—from finding custodial staff and buying textbooks, to hiring teachers and managing the budget.

These arrangements are known as “sweeps” contracts because they “sweep” nearly all of a charter school’s public funds (anywhere from 95 to 100%) over to their management companies.

“There are substantial amounts of money being made here, and it’s being made almost entirely within our disproportionately at-risk and vulnerable communities,” Josh Cowen, a professor of education policy at Michigan State University told The ‘Gander in an interview last year. 

Some charter school operators in Michigan—like ACCEL Schools—have even run their own real estate arms, which reportedly allow them to acquire properties and then basically rent their own buildings to themselves (with taxpayer dollars) through the charter schools they manage.

And because those private entities aren’t subject to Michigan’s open records laws, nobody—not even the state Board of Education—knows whether or not those contracts are offering taxpayers a fair deal, or bilking them out of millions of dollars in sweetheart real estate contracts.

What’s the plan?

With little oversight on how state education funding is spent once it ends up in the hands of corporate management firms, state lawmakers have been eager to make changes for years—but have made little progress. Democratic lawmakers again vowed to tackle the issue after taking control of the state Legislature in 2023, but have yet to get reforms passed.

Lawmakers will only be in session for a few weeks during the lame-duck session in December. And with Michigan Republicans generally opposed to the concept of charter school reform, it’s highly unlikely the bills will find their way into law next year—even if they’re reintroduced.

Last week, state Rep. Dayna Polehanki (D-Livonia) emphasized that the bills do not seek to force charter schools to close or limit the amount of state funding they receive—only build new guardrails that allows the state to keep a closer eye on how charter schools spend tax dollars.

Still, Republican state lawmakers have continued to oppose the legislation. 

“We love our charter school kids, parents, teachers, support staff, and principals,” Polehanki posted to Twitter after the hearing. “However, when over 80% of charter schools in Michigan are connected to private companies, the majority that exist to make a profit using Michigan taxpayer money, it’s important that they are no longer allowed to do so in secret. My bills will fix that.”

We love our charter school kids, parents, teachers, support staff, and principals.

However, when over 80% of charter schools in Michigan are connected to private companies, the majority that exist to make a profit using Michigan taxpayer money, it’s important that they are no… pic.twitter.com/K59mjvcQpl

— Senator Dayna Polehanki (@SenPolehanki) November 19, 2024

The state Board of Education has also repeatedly issued resolutions in support of charter school reforms—including in direct support of some of the legislation now pending in the state Senate. 

The Michigan Education Association (MEA) has also backed the proposed legislative reforms.

“Charter schools receive massive amounts of taxpayer dollars, yet they aren’t held to the same transparency standards as traditional public schools or other entities funded by our tax dollars,” MEA spokesman Thomas Morgan told The ‘Gander after some of the bills were introduced last year. “Michigan taxpayers—including parents of children attending charter schools—deserve to know how their tax dollars are being spent, including how much is going toward CEO profits.”

READ MORE: Michigan charter schools face scrutiny after taking billions in state funds

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