RI charter schools face an ethical dilemma: Should they keep millions in federal loans that traditional districts cannot get?
On the other hand, traditional public schools are not eligible for loans under the Small Business Administration’s Paycheck Protection Program, and accepting the money would open the charters to common criticism that they obey. different rules.
The board ultimately voted to pay off his loan, but other charter schools in Rhode Island – and across the country – chose to keep the money. With all eyes on the coronavirus, the normally tight-knit charter school community has been quietly debating the issue for more than a month, and officials are divided over the right approach.
“It was painful,” said Hillary Salmons, a prominent nonprofit executive who sits on The Learning Community’s board of directors, after a 90-minute debate.
Small businesses and nonprofits have received hundreds of billions of dollars in low-interest loans since Congress approved the paycheck protection program in March. Businesses with 500 or fewer employees are eligible for 1% interest loans, which can be canceled if the proceeds are used to retain or rehire workers.
In many states, charter schools have applied for and have been approved for loans, but critics have accused them of taking advantage of a program that claims to be designed for small businesses with few employees, such as restaurants. . Charter schools are publicly funded, so they still have revenue streams from state and local governments that other small businesses lack.
In Rhode Island, charter schools are 501 (c) 3 nonprofit organizations, which are eligible for PPP loans. By comparison, most charter schools in Massachusetts are considered government entities and are not eligible for the program, according to a spokeswoman for the Massachusetts Charter Public School Association.
But Rhode Island leaders have repeatedly said they are considering all options to close a massive budget deficit next year, and Administration Director Brett Smiley confirmed this week that this could include a significant reduction in $ 1.3 billion Governor Gina Raimondo offered to spend on schools in January.
This uncertainty about future funding has therefore led some state charter schools to apply for federal loans.
Board members at Blackstone Valley Prep, which operates several charter schools, voted this week to keep a $ 4 million P3 loan the school had previously received, even though several city leaders who sit on the board prompted the council to return the money. .
At a Zoom board meeting on Monday night, Lincoln City Administrator T. Joseph Almond said he didn’t think the loan money was going to charter schools. Cumberland Mayor Jeff Mutter argued the school does not need the money as it continues to receive per-pupil funding from the districts as required by state law.
“Has a sending district not made payment to BVP?” The answer is no, ”says Mutter.
But Michael Magee, board member and CEO of Chiefs for Change, a national nonprofit that trains reformist heads of state and principals of local schools, said it was clear Rhode Island had enough questions about future education funding to justify continuing the loan.
“Substantively alone, is there still significant tax uncertainty that could force us to lay off employees?” Magee said. “I would say the answer is clearly yes.”
The council ultimately voted to keep the money, but Central Falls Mayor James Diossa, who is president of Blackstone Valley Prep, said if the school did not face state budget cuts, it should then return the money.
Other charter schools in the state have been divided over whether or not to accept the money. Achievement First, a mayor’s academy that primarily serves students in Providence, retained a $ 2.5 million loan because “we are very concerned about public and private funding for next year,” according to Elizabeth Winangun, director of the organization’s external relations.
The uncertainty goes both ways. Lawyers at different charter schools have offered different interpretations of the loan eligibility rules, while lobbyists privately warned their clients that accepting the money could expose them to criticism from teachers’ unions and lawmakers who have already a negative view of charter schools.
Marc Greenfield, an attorney who chairs The Learning Community’s board of directors, said the concept and vision of the PPP program “has continued to be redefined since its inception,” which has left the board in a state of turmoil. precarious situation.
“We have come to believe that PPP loans are intended for a more distinct or traditional nonprofit organization, and although we are technically a nonprofit organization, our core identity, mission and value is that of a public school, ”he said.
Keith Oliveira, executive director of the League of Charter Schools of Rhode Island, said at least nine of its 18 member schools have received a P3 loan or are considering applying for one. While the learning community and Kingston Hill Academy refused their loans, Nowell Leadership Academy decided to keep the $ 407,000 it had received.
“We have had extensive discussions with our member schools and concluded that the decision to apply for such loans should be made by each school,” Oliveira said in a statement. “Each school must decide for itself what is in the best interest of its school.”
Jonathan E. Collins, assistant professor of education and political science at Brown University, said charter schools could not be criticized for taking advantage of their tax status, but he suggested that accepting the money undermines the argument that charters follow the same rules. as traditional public schools.
The federal CARES law that was approved for coronavirus relief includes billions of dollars in the Primary and Secondary Education Relief Fund, but Collins said the use of PPP loans raises the question of whether traditional districts will be eligible for more support from the federal government. the government is moving forward.
“The scariest part of this is I don’t know the answer,” Collins said.