The Privatization of Public Education

Over the last 20 years, privatization of public education has taken a huge toll on our public school system.   Privatization is a threat to public education and to our democracy itself. What follows is a general outline of the major factors involved in the chipping away of public education.

School privatization comes in many different forms.


Charter Schools:

Charter schools are taxpayer-funded but privately managed. They are also freed from many regulations that guide taxpayer-funded, district-managed traditional public schools.

A few facts about charters

The majority of charters do not out-perform public schools

  • The Center for Research on Education Outcomes (called CREDO) at Stanford University discovered that only 17 percent of charter schools provided a better education than traditional public schools and 37 percent of charter schools performed worse.

Many charters are run by for-profit entities

  • A recent New York Times expose on charters in Detroit revealed that for-profit companies “now operate about 80 percent of charters in Michigan, far more than in any other state.”
  • Many charters keep kids out who have learning disabilities, are English Language Learners or are poor.
  • Once students are enrolled, many charters “counsel out” students who don’t do well on standardized tests or can not conform to strict “no excuses” discipline practices.

Charter boards are appointed, not elected

  • Charters are funded by public money, but parents, taxpayers and community members are denied full access to charter operations and finances. This lack of transparency opens the door to rampant fraud.

Solution: Charter schools budgets must be transparent and posted on Department of Education’s website.


Decades of research have demonstrated that vouchers do not improve outcomes for students. Voucher programs have never passed a ballot measure. Because they also are in violation of many states constitutions and enabling acts, many states are renaming and rebranding voucher programs. States also skirt around the issue by not directly giving the money to the private schools. Instead the money is given as debit cards to the parents or run through School Tuition Organizations.

Individual tax credit scholarship programs

  • Tax credit scholarship programs allow individuals or corporationsto receive a tax credit from state taxes and apply it to a School Tuition Organization (STO). The STO then gives that scholarship money to a student.

A few facts about tax credits

Because STOs often have very little oversight, there has been a great deal of fraud.

  • An untold number of STOs, schools and parents are using the tax credits in ways that violate federal tax laws governing charitable donations.
  • Executives at two of the largest STOs have used tax credit donations to enrich themselves, buying luxury cars, real estate and funding their own outside for-profit businesses.
  • Private schools hiked tuition dramatically to take full advantage of the tax credit program.

The loss of general fund money hurts public education by reducing the K-12 budget.

Empowerment Scholarship Accounts (ESA) or Educational Scholarship Accounts (ESA)

  • These are debit accounts given to parents to use for the school of their choice. It’s usually 90% of the state’s per-pupil spending. The parent can use it for home-schooling, or to pay down the cost of a private education.

A few facts about ESAs

The money rolls over

  • The money is rolled over, so if a parent doesn’t spend it one year, it will roll into the next. If the student graduates from high school and there is still money in the account it can be used for college.

Most ESAs don’t help students in need

  • According to the Milton Friedman foundation, in Arizona where the ESA’s are designated for special needs and low-income students, only 32 percent of the scholarship money given through the individual tax-credit programs goes to children of “low income” families.
    • In Arizona’s public schools, “low income” is defined as those earning 185 percent of the federal poverty level, or $44,862 for a family of four.
    • The corporate tax credit for “low income” families has a more-generous definition — a family of four can earn as much as $82,996. …”
  • Almost 70 percent of that fund is used to send the children of reasonably affluent people to “a school of their choice” even though many of them could cover the tuition on their own.

As with tax credits, the loss of general fund money hurts public education by reducing the K-12 budget.

Corporate Tax credits

This tax-credit scholarship program allows corporate taxpayers to receive tax credits for school scholarships to K–12 students for low-income students. Like individual tax credits, they are run through a School Tuition Organization (STO).

Corporations get big tax breaks

  • In 2013, Geico took a $2 million tax credit in Florida and $8 million in Arizona for private school scholarships.
  • According to the Milton Friedman Family Foundation, the Arizona corporate tax credit for “low income” families, allows a family of four to have a yearly income of $82,996
  • 39% of these low-income scholarship recipients have incomes above $71,000.

Who are the Privateers?

The move to privatize the public education system is being underwritten by a handful of super-rich oligarchs like Bill Gates, Betsy DeVos, The Walton family (Walmart), Eli Broad, and Michael Bloomberg.

The oligarchs are using their billions to fund charter expansions, buy school board and state legislative elections and to influence policy.

Funding Charter Expansion


  • The privateers spent $3.5 million in the 2015 race to keep Louisiana’s Board of Elementary and Secondary Education (BESE) in the hands of privatizers. This is a non-paying position!
  • Who were the privatization players in the BESE election?
    • Michael Bloomberg $800,000
    • John Arnold $625,000 (plus $125,000 to Stand for Children)
    • Alice Walton $400,000 ( plus $250,000 to Stand)
    • Eli Broad $250,000
    • Betsy Devos-$100,000
    • Education Reform Now (Democrats for Education Reform’s PAC) gave $700,000
  • Opposition candidates called for the ouster of State Superintendent John White, who is a staunch supporter of charter schools and the continued privatization of Louisiana’s public schools.
  • In New Orleans, where the first big outside money was seen in a school board race in 2012, there are only 14 public schools left, the rest are charters.


  • In the 2013 Los Angeles Unified School Board race, pro-public education candidate Monica Ratliff had less than $52,000 in campaign funds, while her opponent had $2.2 million. Ratliff was outspent 84-1, but she WON – proof that the privatizers CAN be defeated.
  • Who were the privatization players in LAUSD?
    • Michael Bloomberg $1,000,000
    • Eli Broad $500,000
    • Reed Hastings $100,000
  • Who are the privatization players in LAUSD in 2016?
    • Reed Hastings $1,500,000
    • Bloomberg $550,000
    • Walton family $375,00
    • Broad, $205,000.
  • A plan spearheaded by the Eli and Edythe Broad Foundation wants to raise $490 million to enroll half the students in the Los Angeles Unified School District (LAUSD) into charter schools over the next eight years. A sympathetic board will make their job easier.
  • In 2016 LAUSD found that the US Department of Education had increased federal support for charter schools by nearly 32 percent but by only 6 percent for district run magnet schools, even though the magnet schools out-performed the charter schools.


  • In Jefferson County, a newly elected pro-charter/pro-privatization board majority has directed district money away from district schools, including giving a $400,000 emergency loan to a charter school and giving $3.7 million more in “mill levy” (property taxes) funds to charter schools.
  • This was money that voters had passed for reducing class sizes and increasing teacher pay before the new board was even voted in.
  • The board majority voted to withhold $600,000 in funds for full-day kindergarten.

Funding Voucher Programs


  • In Douglas County, Colorado, the school board voted to give students vouchers to leave the district’s public schools to attend private schools. The Colorado Supreme court said Douglas County’s voucher program was un-constitutional.
  • The New York Times reported that vouchers are “at the heart of a series of conservative reforms that have transformed Douglas County into an educational battleground in recent years, pitting teachers’ unions, civil liberties groups and liberal parents against conservative families, a majority conservative school board and a group backed by the conservative Koch brothers.

Undermining Public Education


  • As Arizona State Treasurer, Doug Ducey’s claim to fame was his successful effort to defeat a referendum aimed at properly funding Arizona public schools. $925,000 out of the $1.8 million campaign came from the Koch Brother’s Americans for Responsible Leadership. Through various groups, the Koch brothers were the top underwriters of Ducey’s run for governor. As a thank-you to underwriting his campaign, Governor Doug Ducey appointed American’s for Responsible Leadership’s chair, Kirk Adams, his Chief of Staff, has provided first time state funding of $5 million for Koch initiated think-tanks at two state universities, cut K-12 public education, expanded tax credits and ESA programs, and refused to follow the Arizona Supreme Court order requiring the state to pay back the $3 billion in K-12 money he used for other budget needs.
  • Arizona has a unique law that allows privately run charters to keep their property if they close. Can you imagine a retiring high school principal selling the high school he or she worked at and keeping the profit? It would be laughable if it weren’t happening.


Brennan Center for Justice analyzed campaign spending in 6 states, including AZ: dark money spending state/local elections was 38 times greater in 2014 than in 2006.

(Secret Spending in the States)

The private ownership and control of public entities, programs and services is costing American taxpayers hundreds of billions of dollars a year as a result of waste, corruption and the insertion of the “profit” motive into the provision of public responsibilities.