However, as Corbett eagerly points out, the second year's funding was backed by $654 million in temporary stimulus dollars. His cuts have, for now, reversed that progress.
"He's dealing with the effects of the recession," says Rendell. And "dealing with the fact that he took a no-tax pledge. ... He told us exactly what he's going to do and he's living up to his word. For better or worse."
The state legislature passed a bill legalizing privately managed public schools in 1997. Since then, though, charter schools have failed to live up to their utopian promise. A Stanford University study found that students at almost half of Pennsylvania's charters performed "significantly worse" than their peers at traditional schools.
Still, there are good charters. Hundreds of students enter a lottery each year for a seat at Center City's Independence Charter School, a top-tier school whose board is packed with well-connected, affluent members. This, presumably, is the sort of fundraising prowess that Knudsen hopes for.
But other charters depend on young and inexperienced teachers who are asked to work very, very hard. "The workload is really high," says one Mastery teacher, a Teach for America participant. This will not be his career. "Most of the teachers are under 35. That pace is not sustainable."
It may not be sustainable for the district either. Last month, Commonwealth Court ruled the district illegally capped enrollment at the Walter D. Palmer Learning Partners Charter School; it must pay out $1.3 million as a result. The implications could be disastrous: If the district can't negotiate charter growth, it cannot budget.
Chester upland public schools are going bankrupt. And so, this January, the school district joined civil rights groups and parents in filing a federal lawsuit against Corbett, demanding aid to schools that had been broke since Harrisburg ended 16 years of state control in 2010. Teachers pledged to work for free if necessary.
The judge forced the state to provide emergency aid. Two future trials will determine whether Corbett's cuts violated federal laws protecting special-education students, and whether the cuts were racially discriminatory, much as Philadelphia had alleged in 2001.
"Chester Upland is the canary of school districts," says Michael Churchill, a lawyer at the Public Interest Law Center representing the district. "They're just the first one to go. Most of the school districts around the state, except the rich suburban ones, are really suffering. And I don't see any solution that anyone is proposing in terms of legislative help. I don't see what the endgame is from the Corbett administration."
On the other hand, the outcome for Chester Community Charter School — which enrolls more than half the district's K-8 students — seems to be quite lucrative: $16.7 million of the charter's budget (more than 41 percent) will go to CSMI, the company that administers the school, according to the Inquirer. Where does that money go? Some point to the likes of CSMI's chief executive Vahan Gureghian — wealthy businessman, Montgomery County Republican Party powerhouse and a major Corbett donor. Last year, he spent $28.9 million on a Palm Beach oceanfront property.
CSMI's president, Jake Der Hagopian, is no better. He maintained numerous business ties to Leonardo Pelullo — described by the New Jersey State Commission of Investigation as a "key organized crime associate."
Der Hagopian, who did not respond to calls from CP, spent much of the 1980s and '90s in Miami as executive vice president of the Royale Group. Pelullo ran the firm, and was convicted of defrauding Royale and the American Savings and Loan bank of $2.2 million partly to pay off a debt to an associate of vicious Philly mob boss Nicky Scarfo.
There is more: In 1990, Pelullo and his associates were accused of stealing $1.8 million from Transcom Trucking soon after they took over. Transcom's assets were turned over to another company, PIE Nationwide, where Der Hagopian sat on the board. Der Hagopian was never indicted. But former Assistant U.S. Attorney Ronald G. Cole, who prosecuted Pelullo, says the two were close: "Pelullo ... would bring Der Hagopian to be his muscle. I don't care about his title. There wasn't really anything going on in the Royale Group."
Back at Chester Community Charter, the federal lawsuit also alleges it inflates the number of special-education students it serves to up its state funding. CSMI is scheduled to open a new charter in Camden this September.
Scandal is no stranger to Philadelphia-area charter schools: 18 have been the subject of federal investigations since 2008, according to the Inquirer. A 2010 City Controller investigation found the district's "Charter School Office is only providing minimal oversight of charter schools except during the time leading up to the charter renewal," making them "extremely vulnerable to fraud, waste and abuse."
Philadelphia charters spend hundreds of thousands of taxpayer dollars on undefined legal and accounting work, "purchases," "services" or just plain "other," according to data uncovered by Temple Law professor Susan DeJarnatt in a forthcoming article in the journal Urban Lawyer.
Hugh C. Clark, former head of Northwest Philly's New Media Charter School, last month pled guilty to stealing $522,000 in tax dollars. North Philly's Truebright Science Academy, part of a 130-school nationwide network headed by controversial Turkish imam M. Fetullah Gulen, is the subject of a federal investigation of potential forced employee kickbacks. The SRC has recommended that Truebright's charter not be renewed. And sketchy real estate practices abound: Multi-Cultural Academy, for example, paid rent to an entity controlled by founder Vuong Thuy, who was fired last year after complaints. The SRC, which also questioned whether the school was culling lower-performing students, nonetheless renewed the school's charter last Friday.
A charter can go so far as to totally collapse without prompting intervention. This February an employee of Frontier "virtual charter" school contacted Daily News reporter David Gambacorta: Teachers were working just 20 hours a week, and receiving only half pay. Many students were performing poorly or just not "attending" their online classes. A month later, the CEO laid off all the teachers. Neither the state nor the school district (which pays Frontier nearly $435,000 a year) has so far publicly intervened.
Cyber charters as a whole have been called a scam. The Stanford study found students at 100 percent of Pennsylvania's cyber charters performed significantly worse than counterparts at traditional schools. Five Pennsylvania cyber charters, according to DeJarnatt, receive $200 million in tax money each year. K12, the for-profit company that runs Agora Cyber Charter, made $31.6 million last year from state taxpayers. If this seems troubling, consider that K12's owners include billionaire Michael Milken, the convicted securities fraudster.
Corbett, a professed friend of the private sector, has deep political ties to the for-profit reform movement. Former Corbett adviser Jeanne Allen heads the Center for Education Reform and runs TAC Public Affairs, which has represented for-profit education firms like Kaplan and Charter Schools USA. The governor is now backing legislation that will dramatically decrease charter oversight, reduce local control, extend the charter period to 10 years, and grant automatic charter renewals.
As Philadelphia schools cut past the bone and spin beyond crisis, the movement to privatize them has grown fat. After 15 years of pellmell growth, 82 charter schools now educate 25 percent of district students, and will this year receive $525 million. The flight of children to charters has increased the price of educating those who remain in the district — a key reason the district is now pushing to close under-attended schools. Charters have also siphoned off many Catholic-school students, according to a Pew Foundation study, prompting a similar enrollment crisis for the Archdiocese of Philadelphia.
The Catholic Church has nonetheless eagerly joined conservatives to back school vouchers, or the use of tax dollars to fund private school tuition. The movement is a powerful one: Students First, a PAC backed by Bala Cynwyd hedge-fund managers, poured $5 million into the quixotic 2010 gubernatorial campaign of voucher proponent state Sen. Anthony Williams. Williams lost, but his candidacy prompted a political sea change when Democratic nominee Dan Onorato declared his support for vouchers. "It's no longer a partisan right-wing conversation," Williams told CP. "It's a conversation about what do you do about failing schools."
Last week, state Rep. James Roebuck, the ranking Democrat on the House Education Committee and a voucher opponent, narrowly fought off a primary challenge heavily funded by pro-voucher PAC money.
The pro-voucher funding stream appears unstoppable, with sources like the Bill and Melinda Gates Foundation, the Eli and Edythe Broad Foundation and the Walton Family Foundation. So it goes: The same political forces that have bled Philly schools for decades now decry their poor performance. The solution, of course, is the private sector.