In 1996 NC passed HB 955, also known as the Charter School Act. In January 2011 the National Alliance for Public Charter Schools ranked NC 32nd out of 41 states with charter school laws with poor marks in accountability, equity of funding, and the low cap of 100 schools for the state.
The NAPCS is billed as a non-profit headed by former Bush administration official Nina Rees, the reality is that it is a powerful, well connected lobbying group with deep pockets and wealthy benefactors, which isn't unusual. What is unusual is the amount of success it's had influencing the decisions of NC GOP legislators and the banquet of taxpayer dollars they've established for hedge fund managers, Wall St. banks, big banks, and wealthy investors to gorge upon.
The NC GOP began planning this feast shortly after the NAPCS report, in February 2011 Republicans in NC began a movement to lift the cap on charter schools and the number of applications has expanded exponentially.
In the summer of 2011 at the annual ALEC conference in New Orleans Thom Tillis was crowned best corporate ass kisser. Among the main topics at ALEC's summer indoctrination camp for parasitical politicians was the privatization of public schools.
Embolden by his new title, Tillis and the NC delegation which included ALEC Education Task force member Republican Rep. Linda Johnson,and 28 other Republicans returned to NC with a plan.
That plan was to subvert our public school system and divert taxpayer funds into private hands, to enrich the few with the wealth of the many. By passing bills to expand the number of charter schools, create a separate charter school board, give out interest free loans to applicants, and take power away from local school boards, they opened the door and the vault of the state's treasury and turned their backs on the very people they were elected to serve.
Why would they do such a thing? Money, and lots of it. The reason hedge fund managers, Wall St., big banks, and wealthy donor/investors are interested in charter schools is the construction of them and the access to millions upon millions of tax dollars.
At the end of the Clinton administration, when the Republican controlled congress was undermining Glass-Steagall and setting up a feeding frenzy for Wall St., they passed anew kind of tax credit called the New Markets Tax Credit that gives enormous tax credits to banks and equity funds that invest in community projects in under served communities. This tax credit has been used extensively in recent years to build charter schools and hand the already wealthy a "free lunch" on the taxpayer's dime.
There is a lot of money in charter schools, and not just the ones run by for profit management companies, just google the salaries of the people that run them, non-profit and for profit alike, but it pales in comparison to the money to made by the New Markets Tax Credit.
Investors who put up the money for construction can double their money in seven years through a 39% tax credit from the federal government. This is a tax credit on the money they're lending, so they're collecting interest on the loans as well as the 39% tax credit.
Then they piggy back the tax credit on other federal tax credits such as historic preservation, job creation, or Brownsfields tax credits and pocket even more public money. If they invest 10 million, in seven years they can double their money.
And here's the icing on the cake, the charter schools, or the state ends up with the debt service on these loans and the corporations and banks whose lobbyists write the NC laws that allow them to do this walk away with tens of millions in tax payer dollars. On top of that, if the investor is a hedge fund, they don't even have to put up their own money.
The whole charter school scam is nothing but corporate socialism sponsored by the NC GOP that provides a path for them to redistribute the wealth of the state into the hands of their wealthy donors.