Charter schools provide wealthy investors with a 39 percent tax credit that more than doubles the return on these investments within just seven years.
As NY Daily News reporter Juan Gonzalez reported for Democracy Now!, “this is a tax credit on money that they’re lending, so they’re collecting interest on the loans, as well as getting the 39 percent tax credit.” Additionally, as Gonzalez explained, the federal government “piggyback[s] the tax credit on other kinds of federal tax credits, like historic preservation or job creation or Brownfield’s credits. The result is, you can put in $10 million and in seven years double your money.”
A firm called Capital Roundtable has on its website: “For-profit education is one of the largest U.S. investment markets, currently topping $1.3 trillion in value.” Capital Roundtable focuses on the “‘need-to-know’ information needs of general and limited partners, and their colleagues and portfolio company managers.”
Then there’s David Brain, head of large real-estate investment firm Entertainment Properties Trust, who appeared on CNBC in 2012 to tell audiences just how profitable charter school investment has become.
He explained, “Well I think it’s a very stable business, very recession-resistant. It’s a very high-demand product…the charter school business.it’s our highest growth and most appealing sector right now of the portfolio.
It’s the most high in demand, it’s the most recession-resistant. And a great opportunity set with 500 schools starting every year.
It’s a two and a half billion dollar opportunity set in rough measure annually.”
Eminent Properties Trust boasts, “Our investment portfolio of nearly $3 billion includes megaplex movie theatres and adjacent retail, public charter schools, and other destination recreational and specialty investments…”
In his 1997 State of the Union Address, former President Clinton called for the creation of 3,000 charter schools by the year 2002. In 2002, President Bush called for $200 million to support charter schools.
President Bush’s proposed budget called for another $100 million for a new Credit Enhancement for Charter Schools Facilities Program. Funding from the Credit Enhancement “shall be used by the eligible entity” essentially to get them off the ground in terms of facilitating the issuance and guarantee of bonds, guaranteeing and insuring leases of personal and real property and facilitating financing by identifying potential lending sources.
Since 1994, the U.S. Department of Education has provided grants to support states’ charter school efforts, starting with $6 million in fiscal year 1995.
Reuters has reported that “wealthy individuals from as far away as China, Nigeria, Russia and Australia are spending tens of millions of dollars to build classrooms, libraries, basketball courts and science labs for American charter schools…And Florida, state business development officials say foreign investment in charter schools is poised to triple next year [in 2013], to $90 million.”
To be continued.