Michigan Democrats push for more transparency for charter schools

By: - March 14, 2022 9:43 am

Dave Cummings/States Newsroom

Democrats in both the House and Senate introduced sweeping bill packages earlier this month aimed at improving financial accountability and transparency for charter schools and management companies. 

Both chambers of the state Legislature put forth identical 11-bill packages, the School Freedom, Accountability, Choice and Transparency (FACT) Act, that would require authorizing organizations that oversee charter schools and the education management organizations that run them to produce financial audits, strengthen requirements and prevent conflicts of interests.

The bills are House Bills 5846-5856 and Senate Bills 927-327. They’ll have an uphill battle in the GOP-led Legislature that has backed school choice measures.

Here’s what the package does: 

  • House Bill 5853, introduced by Rep. Samantha Steckloff (D-Farmington Hills), and Senate Bill 927, introduced by Sen. Dayna Polehanki (D-Livonia): Require EMOs to produce annual audited financial statements for authorizers to account for any fees collected to oversee charters. 
  • House Bill 5846, introduced by Rep. Padma Kuppa (D-Troy), and Senate Bill 928, introduced by Sen. Rosemary Bayer (D-Beverly Hills): Require an EMO contract to include annual audited financial statement provisions. 
  • House Bill 5856, introduced by Rep. Stephanie Young (D-Detroit), and Senate Bill 929, introduced by Bayer: Require all schools to post annual student recruitment costs. 
  • House Bill 5850, introduced by Rep. Matt Koleszar (D-Plymouth), and Senate Bill 930, introduced by Polehanki: Establish a due process and rehabilitation process and require state superintendents to suspend authorizers for failing to provide appropriate continuing oversight. 
  • House Bill 5848, introduced by Rep. Mary Cavanagh (D-Redford Twp.), and Senate Bill 931, introduced by Sen. Jeremy Moss (D-Southfield): Require the Department of Treasury to notify authorizers of fiscal distress in a school they oversee and require authorizers to notify other charters under their oversight of a fiscally distressed school contracting with the same EMO. 
  • House Bill 5847, introduced by Rep. Darrin Camilleri (D-Brownstown Twp.), and Senate Bill 932, introduced by Polehanki: Prevent expansion or authorizer shopping by charter schools performing in the bottom 5% of schools. 
  • House Bill 5851, introduced by Rep. Helena Scott (D-Detroit), and Senate Bill 933, introduced by Bayer: Establish and strengthen authorizer requirements and school board bylaw requirements. 
  • House Bill 5854, introduced by Rep. Lori Stone (D-Warren) and Senate Bill 934, introduced by Polehanki: Prevent EMOs from making “sweetheart” real estate deals and require the board of directors to ensure the lease or purchase of property reflects fair market rates. 
  • House Bill 5855, introduced by Rep. Regina Weiss (D-Oak Park), and Senate Bill 935, introduced by Moss: Prevent conflicts of interest between EMOs and groups or individuals who establish charters. 
  • House Bill 5849, introduced by Rep. Cara Clemente (D-Lincoln Park), and Senate Bill 936, introduced by Bayer: Subjects EMOs to FOIA. 
  • House Bill 5852, introduced by Rep. Bill Sowerby (D-Clinton Twp.), and Senate Bill 937, introduced by Bayer: Require schools to hold monthly school board meetings subject to the Open Meetings Act.

Michigan has 295 active charter schools, and about 81% of these schools are run by for-profit education management organizations (EMOs). Despite being run by for-profit companies, Michigan’s charter schools received $1.4 billion in Fiscal Year 2021.

Pamela Pugh, vice president of the Michigan State Board of Education, said charter schools and their EMOs should be held to the same accountability standards as the state’s public schools including “financial, academic, and ethical transparency requirements.” 

The goal of these bill packages isn’t to cut off funding to charter schools, but monitor where the money is going and how it’s being spent. 

“Each year, taxpayers are providing more than a billion dollars to charter schools and EMOs that operate throughout Michigan. Much of this money is hidden from the public and we need to know where this funding is going,” said Sen. Jeremy Moss (D-Southfield). 

In Michigan, charter schools have been susceptible to poor management, and 136 charter schools have had to shut their doors from financial distress or mismanagement, according to state House Democrats. 

Many charter schools in Michigan are also overseen by the state’s partnership program, which was started under former Gov. Rick Snyder administration in 2017 formed the Michigan Partnership Model to improve the state’s lowest-performing public and charter schools and keep them from closing. 

Last month, Republicans, along with Betsy DeVos, the former U.S. secretary of Education from West Michigan and longtime champion for charter schools, unveiled a ballot initiative to create a school voucher-style system that would use public tax dollars to fund private education. Whitmer already struck down legislation in February that would give tax credits to Michiganders who contributed to a scholarship program for non-public schools.

This isn’t the first time the state Legislature has seen many of the Democratic bills. In 2017, the original act was introduced, made up of 16 bills, but none of those bills made it to a first reading.

The FACT Act bills were referred to as the Education Committee in the House and the Committee on Education and Career Readiness in the Senate. 

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Allison R. Donahue
Allison R. Donahue

Allison R. Donahue covers education, women's issues and LGBTQ issues. Previously, she was a suburbs reporter at the St. Cloud Times in St. Cloud, Minn., covering local education and government. As a graduate of Grand Valley State University, she has previous experience as a freelance researcher for USA Today and an intern with WOOD TV-8. When she is away from her desk, she spends her time going to concerts, comedy shows or getting lost on hikes in different places around the world.