The biggest public spending scandal in the state's history came to light in a State Board of Accounts report halfway through the current legislative session. As much as $85 million was misspent by online charter school operators funneling taxpayer funds to connected companies, including $65 million collected for students who were not enrolled in the schools. The investigation has been turned over to federal authorities.
If you expected lawmakers would scramble to tighten spending rules and oversight of your tax dollars in the wake of this mess – think again. The Republican supermajority not only rejected attempts to hold virtual charter schools more accountable, it's now ramming through a last-minute measure to allow charter schools a cut of property taxes from referendums conducted by traditional public schools. Gov. Eric Holcomb, through a tie-breaking vote cast by his lieutenant governor, chose to stand with charter schools and against 291 public school districts.
With evidence of millions in misspending, why are lawmakers and the governor intent on steering public funds to private interests? Where are the fiscal conservatives fighting to protect tax dollars? Where are the calls for greater financial accountability?
Rep. Ed DeLaney, D-Indianapolis, made multiple attempts to strengthen oversight of charter schools this session. He offered five amendments to Senate Bill 455 addressing problems brought to light by the virtual schools scam, but the GOP-controlled House Education Committee chose to kill the Republican-authored bill rather than strengthen accountability over their freewheeling school choice program.
“Loose oversight and lack of regulation from this legislative body led Indiana taxpayers to be defrauded of nearly $65 million from virtual charter schools, while delivering little to no satisfactory educational results,” DeLaney said last week. “The Republican supermajority has failed teachers, parents, school districts, taxpayers and, most importantly, students by refusing to act on any legislative matters from House Democrats that would hold virtual charter schools accountable.”
DeLaney's efforts to address fraud in virtual charter schools began well before the State Board of Accounts report was released last month. In August, he called on House Speaker Brian Bosma and members of the Legislative Council to direct the Interim Study Committee on Education to look into issues involving online charters. They declined to do so.
“The suggestion from House Republicans that it is not the Indiana General Assembly's responsibility to address this issue by legislative investigation shows a high level of irresponsibility and apathy,” DeLaney said last month. “We just threw taxpayer dollars in the middle of the street and let the bad guys pick it up.”
Demanding the same level of financial accountability for charter schools – both virtual and bricks-and-mortar schools – seems like a no-brainer for any lawmaker who claims the title of fiscal conservative. But the push is to expose more tax dollars to abuse. A measure inserted in House Bill 1065 last week – after the opportunity for public testimony was past – allows charter schools to collect a share of property tax referendum money when school districts ask local property taxpayers to raise taxes for construction, operating or security expenses. The provision is worded as “may” in the current language, but legislative observers know how easily the wording can be changed to “shall” in subsequent sessions.
Sixteen Republican senators voted no on the referendum measure last week. Northeast Indiana lawmakers – Sens. Liz Brown, Justin Busch, Travis Holdman, Dennis Kruse and Andy Zay – all voted yes, however. Holdman, an attorney, was a paid consultant to the virtual schools responsible for $85 million in misspent funds.
In Monday's conference committee session to resolve differences between House and Senate versions of the bill, the charter referendum language was maintained.
Lawmakers have one more chance to protect local tax dollars. Will they choose privatization or fiscal accountability?