Charter company dumps plan to redirect funds

Friday, April 11, 2014, Vol. 38, No. 15
By Lisa Fingeroot

Rocketship has come under fire for a plan, which it calls “outdated,” to take money from existing schools by cutting staff and expenditures and using the savings to finance expansion into other states.

-- Submitted | Courtesy Of Rocketship Education

A national charter school group tapped to open schools in both Nashville and Memphis is dumping plans to syphon money from its schools here and in California to finance expansion into other states, a company official says.

The plan by Rocketship Education to use tax dollars collected in one state to finance the opening of schools in another state has elected officials and charter school observers questioning whether the move is legal.

But that plan has been scrapped and will be replaced in May with a similar business model that shows money will not be moved from state to state, says Kristoffer Haines, senior vice president of growth and development.

Revenues generated at a Nashville school, however, could be used to help jumpstart another Rocketship school in Nashville, he adds.

Even that kind of money movement isn’t winning points from Metro Nashville school board member Will Pinkston, a vocal opponent of unrestricted charter school growth.

“Any charter operator needs to be keeping those dollars in the school and not using them to fund growth inside or outside the community,” Pinkston says.

The Metro school board has approved one Rocketship charter school, but the company has plans to ask for at least one more in Nashville.

Rocketship does not need local approval, though, because it has state approval to take over failing schools in both Nashville and Memphis through the Achievement School District established to improve Tennessee schools performing in the bottom five percent of all schools.

The Rocketship plan to fuel growth through local schools called for cutting staff to save money, and taking an additional $200,000 per year from each of the company’s existing schools to use as seed money.

Kristoffer Haines, Rocketship’s senior vice president of growth and development, says philanthropic groups will fund future expansion.

-- Submitted | Courtesy Of Rocketship Education

“It’s called ‘cross subsidization,’ and whether it is legal or not is very questionable,” says Gary Miron, an education professor at Western Michigan University whose research includes the monitoring of more than 300 charter schools around the United States.

“Why would taxpayers in Tennessee want to pay for schools in another state,” he asks.

The plan was first found on the company’s website, but was removed when it became ammunition in a California neighborhood fight over whether Rocketship would be allowed to open a second school in the community.

Haines accuses critics of distorting the information and called the plan “outdated” because much of it was based on an old 2010 plan that was meant only for California schools and only to fund additional California schools, he explains.

However, the plan shows revenue comparisons between the company’s California schools and potential schools in Nashville and Memphis. A Nashville school generates more revenue than a Memphis school because the per-pupil payment is greater.

Haines denies that Rocketship chose to build a Nashville school first because of potential revenue.

“We chose to come to Nashville first because of Adam,” Haines says in reference to Nashville native Adam Nadeau, a Hume-Fogg graduate who has been chosen to lead the new Nashville school.

“In the long run, there will be more Rocketship schools in Memphis because of the need,” Haines adds. “But for us, the critical factor is leadership. At the end of the day, we’re serving kids and opening great schools.”

Haines said the company now plans to fund its rapid growth efforts through philanthropic avenues that include groups like the Charter School Growth Fund, the Bill and Melinda Gates Foundation and the Walton Family Foundation, all known for helping finance charter schools.

Each school start-up requires about $5.5 million, Haines adds.