At an April 2017 committee listening to in a gathering room tucked away within the Capitol’s underground extension, state Sen. Paul Bettencourt, a bespectacled Houston Republican, touted a proposal of his then referred to as Senate Invoice 1882.
The invoice was meant to “flip round” public faculties the state had deemed failing by tapping nonprofit constitution college operators to take over and implement “revolutionary practices,” Bettencourt promised. The brand new system can be a “mannequin of effectivity,” New Braunfels Republican Donna Campbell added to a refrain of bipartisan assist. Co-author José Menéndez, a San Antonio Democrat, later instructed the Texas Observer that he aimed to faucet into constitution operators’ “highest experience.”
On the listening to, one public college advocate warned of the proposal’s excessive value and lack of accountability, and one other requested extra protections for public college workers, however their testimonies had been largely ignored, and SB 1882 handed.
Since then, 27 college districts throughout Texas have struck offers beneath the statute, permitting nonprofit organizations and some public universities to gather taxpayer {dollars} to function 129 public faculties. Some cash-strapped college districts had been merely motivated to take part by further funding made accessible beneath this system, whereas others averted impending state takeovers by inking their contracts. Below a 2015 regulation (strengthened in 2021), the Texas Training Company (TEA) can depose an elected college board and take over a district if even one among its faculties receives a failing score (F, D, or Enchancment Required) for 5 consecutive years within the state’s “A-F Accountability” system. SB 1882 created an escape hatch for districts—in the event that they turned over their failing faculties.
To this point, 48 constitution operators — that are required to be nonprofits, governmental entities, or larger training establishments — have acquired at the very least $735 million in state and federal funds (handed via the varsity districts) beneath this system SB 1882 inaugurated, which got here to be referred to as “Texas Partnerships.” These operators largely management the budgets and operations of the general public faculties they helm.
Per scholar, Texas ranks among the many backside 10 states for common public training spending: round $12,000 in 2023-2024, roughly $5,000 lower than the nationwide common, in line with information from the Nationwide Training Affiliation. The state’s “primary allotment,” the core constructing block of that per-student spending, remained stagnant from 2019 to 2025 at simply $6,160. (The Legislature now seems poised to extend this determine considerably.) However Texas Partnerships unlock further per-student funding from the state. Since 2019, districts have collectively acquired, and largely disbursed to constitution operators, $284 million extra for college students in these partnership faculties than they’d usually get for a similar variety of college students, TEA data present.
Seven years into the expensive experiment that’s Texas Partnerships, the Observer has carried out a wide-ranging investigation into whether or not these state-backed constitution preparations have truly benefited Lone Star State youngsters in struggling faculties. Total, the Observer discovered that faculty districts have to this point ended contracts protecting 44 campuses, a 3rd of Texas Partnership faculties, with the contracts protecting 30 of these faculties being terminated early.
The Observer obtained and examined contracts, college evaluations, monetary reviews, and tax filings referring to all operators whose contracts have been terminated early or had been non-renewed. From 2018 via 2024, these 22 operators collectively ran 44 faculties in Austin, Beaumont, Dallas, Ector County, Fort Value, Grand Prairie, Hearne, Lubbock, Midland, San Antonio, Snyder, Victoria and Waco college districts. These entities acquired at the very least $393 million in state and federal funds, greater than half the entire awarded to all operators beneath the Texas Partnership program to this point, primarily based on district data.
The acknowledged mission of Texas Partnerships is to assist flip round struggling faculties. However the operators have achieved blended outcomes. Of these 44 campuses, 14 are preschools, which aren’t topic to the identical state rankings system as Ok-12 faculties. Twelve of these preschools additionally lack full tutorial efficiency information since they solely operated in the course of the COVID-19 pandemic, when the state didn’t implement end-of-year tutorial evaluation necessities. Of the remaining 30 faculties, 18 ended their time beneath non-public administration with failing state total accountability rankings, in line with an Observer evaluation of TEA rankings and tutorial efficiency reviews. Eleven posted worse rankings in at the very least one among their two last contract years than these faculties did within the yr earlier than the non-public partnerships started. And 24, together with the 2 preschools with full tutorial information, didn’t meet rankings targets set by college districts of their partnership contracts in at the very least one of many last two college years of these contracts, in line with public data and interviews with district officers.
Some operators additionally had monetary points. For instance, 4 didn’t submit annual monetary reviews to high school districts, as required by their district contracts, for a number of years. Three ended at the very least one among their contract years within the pink regardless of contractual language requiring them respectively to “function inside accessible funding,” to retain “a optimistic internet asset quantity,” or to make sure “whole expenditures doesn’t exceed whole revenues.” One operator was accused by a district of diverting funds to a campus it operated in one other district.
Some college district officers instructed the Observer that they voted to finish contracts after seeing lackluster outcomes. Thomas Sigee, a board member of Beaumont ISD, which has already terminated partnerships with three completely different operators early, instructed the Observer that he doesn’t perceive why the district would accomplice with non-public operators when “the outcomes will not be any higher.” Sigee added, “Constitution faculties haven’t confirmed to be higher than [traditional public schools].”
Different specialists expressed broader doubts concerning the state’s funding within the partnership constitution program at a time when different public college funding has been flat. Paul Colbert, a college finance professional and former Democratic state consultant, instructed the Observer, “We’re giving public {dollars} to establishments over which we don’t actually have oversight as to how [the dollars are] going to be spent, whether or not or not it’s a vital sum of money to offer them to spend, whether or not or not they’re getting used properly, and there’s no explicit recourse on it as a result of there’s no person trying over their shoulder.”
As a part of this investigation, the Observer sought remark from all 13 college districts the place partnerships ended. Eight college districts confirmed the Observer’s findings concerning their partnership faculties.
5 different districts offered restricted data or didn’t reply. A Victoria ISD spokesperson instructed the Observer the district didn’t acquire data on tutorial or monetary targets for its preschool partnership as a result of “the enrollment projections triggered the clause to terminate the partnership.” A spokesperson for Waco ISD stated the district was “unable to verify the info … as a result of Transformation Waco operated the varsity,” and a spokesperson from Snyder ISD stated that present district leaders didn’t have data of the small print of the partnership. The spokesperson for Lubbock ISD didn’t reply. A spokesperson for Dallas ISD—which signed contracts in July 2019 with 5 operators to run 10 preschool partnerships—stated that operators “weren’t paid beneath SB 1882” as a result of “in December 2019, the Dallas ISD Board of Trustees voted to change the cost technique to make the most of district and federal funds.”
Remark from non-public college operators was additionally sought and is included the place relevant.
Solely one of many 22 operators examined for this story continues to run partnership faculties in Texas: Third Future Colleges-Texas (TFS-Texas), the nonprofit beforehand run by present state-imposed Houston ISD Superintendent Mike Miles. A TFS-Texas contract with Ector County ISD was not renewed, and the nonprofit has stated it plans to finish its partnership with Beaumont ISD for 3 faculties there on the finish of the varsity yr, nevertheless it nonetheless operates 4 different faculties in Midland, Jasper, and Austin ISDs.
In whole, 27 organizations, together with non-public nonprofits and public universities, nonetheless function greater than 80 partnership faculties in Texas as we speak.
As legislators this yr permitted a proposal to ship much more funding to personal entities—via college vouchers—public training advocates say that the problems with Texas Partnerships provide a glimpse of what occurs when state {dollars} are handed to personal operators with few strings hooked up.
Patty Quinzi, legislative counsel for the Texas American Federation of Lecturers—a union representing lecturers and different college workers—and a former state Legislative Price range Board analyst, was the solely particular person to formally testify towards SB 1882 on the 2017 committee listening to, and she or he worries that the issues with the partnership program will solely worsen.
“We’re freely giving lots of and lots of of thousands and thousands of {dollars} with none actual accountability,” she instructed the Observer, “then it’s no shock that efficiency isn’t going to enhance, and that there’s going to be monetary improprieties.”
After SB 1882 took impact in June 2017, districts had been gradual to contract companions for struggling faculties. Following this system’s second yr, the Texas Tribune reported that solely 5 had inked partnerships: Austin, Ector County, Hearne, San Antonio, and Waco. The beginning was rocky: Seven of the primary 12 collaborating campuses reported decrease state accountability scores within the 2018-19 college yr than they did within the 2017-18 college yr, primarily based on printed rankings.
However San Antonio college district leaders continued to dive in headfirst. The San Antonio ISD (SAISD) college board gave non-public operators 10-year contracts for 5 campuses in 2018, plus 18 extra the following yr. Over time, the district granted 9 non-public entities and two public schools management over 33 campuses, greater than a 3rd of its faculties and probably the most of any district.
Two smaller districts have ceded management of greater than half their public faculties to personal operators or a public college: Longview ISD in East Texas has 13 of 14 faculties collaborating, and Edgewood ISD—a poor district inside San Antonio identified for a landmark case calling for an equitable state college funding system—has 10 of 18.
Statewide, a 3rd of the 48 whole Texas Partnership organizations—which embody out-of-state constitution administration organizations, faculty education schemes, and homegrown nonprofits—had been nonprofits included shortly earlier than taking up campuses. In San Antonio ISD, 5 of the 11 operators operating partnership faculties had been model new.
Jake Kobersky, a TEA spokesperson, instructed the Observer that, within the 2022-23 college yr, the training company started requiring that Texas Partnership operators “will need to have existed for at the very least three years, have managed a number of campuses for a number of years, and exhibit a monitor report of managing campuses to tutorial success or have considerably improved the tutorial efficiency of campuses.”
In a written assertion, TEA added: “70% of all partnerships have skilled some type of tutorial development or maintained acceptable efficiency. By selecting fastidiously chosen companions to function faculties via a rigorous vetting course of and high quality authorizing practices, districts can leverage exterior experience and introduce revolutionary practices and focused helps, which exhibits improved scholar efficiency.”
Sarah Sorensen, a San Antonio ISD mum or dad and now a college board trustee, grew to become alarmed when she first heard that the board was planning to signal a raft of personal partnership agreements. She began doing analysis, and she or he was astonished to see so many new nonprofit teams, freshly included in Texas and with no prior expertise, apply for the advanced job of operating a public college. “Actually, these had been created virtually in a single day,” she instructed the Observer.
Then-SAISD Superintendent Pedro Martinez, who had pushed for SB 1882, urged board members to approve partnerships. Martinez, now CEO of Chicago Public Colleges, didn’t reply to the Observer’s request for remark.
Lecturers fought again when the district introduced it was contracting Democracy Prep—a 20-year-old New York Metropolis-based constitution administration group that runs greater than a dozen faculties in New York and Nevada—to function Stewart Elementary. Stewart, which had beforehand acquired failing rankings from TEA, had lately “met requirements” and been acknowledged by TEA as among the many high 25 p.c of Texas faculties for educational development in 2018, when the varsity was handed to Democracy Prep.
That very same yr, San Antonio Alliance of Lecturers and Assist Personnel, a union representing 2,700 workers together with 33 lecturers at Stewart, sued San Antonio ISD leaders over the takeover. Alejandra Lopez, a instructor at Stewart who’s now the union president, instructed the Observer she and others had been employed by the principal to show across the college and “had been working extremely onerous to get the varsity as much as customary.”
Workers, represented by the San Antonio Alliance, alleged within the lawsuit that the district violated SB 1882 by contracting with Democracy Prep “with out consulting with the campus workers.”
However the union misplaced its case. In April 2019, the Texas Fourth Courtroom of Appeals dismissed the lawsuit, ruling that SB 1882’s session requirement “applies solely to an open-enrollment constitution college,” a class that excludes almost all Texas Partnerships, that are a legally distinct kind of constitution college.
Martha Owen, the lawyer representing the San Antonio Alliance, instructed the Observer she didn’t imagine the ruling mirrored the intention of the regulation however somewhat “sloppy drafting” within the legislative course of. “It was clear that they supposed that individual requirement, the session requirement, to use to everyone.”
Texas has many older “open-enrollment” constitution faculties, like KIPP or IDEA, that are ruled by a subchapter of the state training code that outlines quite a few monetary and tutorial necessities. Texas Partnerships typically fall beneath a distinct subchapter, for in-district constitution faculties, which comprises few guardrails concerning hiring or funds and minimizes state oversight; as a substitute, these partnerships are largely ruled by particular person contracts between districts and constitution operators, as confirmed in a current TEA report. (In March, Democratic state Senator Borris Miles filed a invoice that might make in-district charters topic to the identical monetary necessities as open-enrollment charters, however the invoice has not acquired a listening to.)
Open-enrollment charters usually personal or lease their very own college buildings and are open to college students throughout the district via a lottery system. Texas Partnership operators usually run present public faculties, and a few have a district-wide lottery system whereas others enroll solely zoned college students like conventional neighborhood faculties.
“The dearth of rules permits for issues to worsen than they may just below a standard ISD or an open-enrollment constitution college,” stated Monty Exter, director of governmental relations on the Affiliation of Texas Skilled Educators, including {that a} lack of state management signifies that problematic operators can attempt to merely soar from district to district. “You see these contracts getting closed … nevertheless it doesn’t cease the entity from going some other place and operating a campus within the state.”
Below most Texas Partnership contracts, college districts retain the duty to take care of amenities, furnishings, and gear, provide transportation and meals to college students, and supply particular training providers, however they provide up management over administration, curriculum, and budgets.
After the San Antonio lecturers sued in 2018, San Antonio ISD started writing extra protections into its Texas Partnership contracts, together with that the district would pay workers at partnership campuses straight somewhat than passing cost via the operators. Spokespeople from just a few different districts, together with Waco and Fort Value, instructed the Observer their districts additionally straight pay lecturers and workers at partnership faculties. Some districts, nevertheless, use contracts primarily based on TEA’s boilerplate contract, which incorporates no such provision.
In San Antonio, Sorensen continued to protest what she thought of the district’s giveaway of public faculties and funds to personal operators and received her college board seat in 2021. She stated she doesn’t imagine there’s a lot distinction within the tutorial efficiency of partnership faculties. “The take a look at scores at these faculties will not be any higher. The expertise[s] of scholars at these faculties aren’t essentially any higher,” she stated, including: “Generally the companions are literally performing extra poorly than our district-managed faculties.”
At a time when shrinking tax income, inflation, and flat state funding have left public faculties in dire monetary straits, Sorensen questions whether or not any non-public operator ought to obtain public cash to experiment with the district’s faculties. “We simply want each penny that we get,” Sorensen stated.
In 2024, SAISD shuttered 13 faculties in an effort to shut price range gaps. Nonetheless, the district projected a $40.8 million deficit by the tip of the present college yr. In the meantime, it’s disbursed $42.7 million in public funding to personal partnership operators since 2018.
SAISD has already terminated Texas Partnerships early for 9 campuses for numerous causes, together with failure to submit a monetary audit, failure to fulfill tutorial targets, and misuse of funds, in line with an Observer assessment of board assembly minutes, district data, and interviews.
“Our constitution companions obtain extra funding, and subsequently they’re anticipated to outperform district-managed faculties. We maintain our constitution college companions to a higher accountability customary for scholar achievement and outcomes. If a partner-run college will not be performing, we do have the framework in our contract settlement to pursue probation and/or revocation,” Laura Quick, an SAISD spokesperson, instructed the Observer through e-mail.
The concept behind Texas Partnerships was that constitution operators, with the assistance of additional funding, would carry struggling faculties with failing state rankings up into passing territory. However the Observer discovered that, of 30 Ok-12 faculties the place partnerships have ended, 18 concluded their time beneath non-public management with failing state accountability rankings.
As well as, partnership operators entered into district agreements with particular tutorial targets—together with promising to enhance state accountability rankings and college students’ standardized take a look at scores, typically with particular benchmarks. The Observer discovered that 24 faculties, together with two preschools, didn’t meet their contractual tutorial targets in at the very least one of many final two years of their agreements. (Twelve preschools the place partnerships ended lack tutorial efficiency information.)
In Beaumont ISD, 4 campuses concluded their Texas Partnerships with failing state rankings—and three of these partnerships had been launched when the district was already beneath state management.
In 2014, TEA took over Beaumont ISD, appointing a state conservator to switch the superintendent and a board of managers to switch elected trustees, after a TEA investigation discovered district leaders mismanaged funds. By 2018, TEA began to part in elected board members. Below state management, the district had cleaned up its funds, however some faculties in high-poverty communities had been nonetheless failing or had dropped in rankings—together with Martin Luther King Center Faculty, a 61-year-old campus within the predominantly Hispanic neighborhood generally known as “The Avenues.”
In 2019, a yr earlier than the state takeover totally ended, Beaumont ISD leaders contracted Phalen Management Academies to run two campuses and Responsive Training Options to run one other.
“We selected constitution faculties primarily based on what TEA instructed us we might use. We made selections primarily based on what they allowed us to do,” stated Sigee, who was permitted by TEA to affix the board as a domestically elected trustee in 2019. “Whenever you convey on a constitution college to take over or accomplice with a public college, and you’ve got restricted choices, it kinda places us in a nook.”
In December 2020, Beaumont ISD’s then-fully elected board additionally voted to signal a contract with the Los Angeles-based constitution administration group Inexperienced Dot Public Colleges to run Martin Luther King Center Faculty. However Sigee instructed the Observer that he and different board members received a listing of potential companions from TEA and lacked time to vet them.
Kobersky, the TEA spokesperson, insisted that districts have at all times been accountable for deciding on operators. “Whereas the company can’t converse to particular person board members’ feedback, there could also be some confusion across the discussions TEA had with the superintendent about working companions,” he stated. “Within the early days of those partnerships, TEA would facilitate connections between districts and working companions who met the precise standards outlined in rule at the moment, however once more the decision-making authority has at all times rested with the district. For SB 1882 partnerships, TEA doesn’t approve who the district selects however the method through which they permitted the working accomplice.”
Below its 2020 contract, the district gave Inexperienced Dot’s affiliate Inexperienced Dot Southeast Texas “preliminary, last, and sole authority over all issues involving tutorial curriculum and the instruction program and associated expenditures”—comparable language to that present in most partnership agreements reviewed by the Observer. Inexperienced Dot’s deal acknowledged it will obtain about $11,000 in state and federal cash yearly for every of its roughly 560 college students, whereas native {dollars} nonetheless individually coated different bills together with upkeep and meals.
Previous to incorporating its Texas nonprofit, Inexperienced Dot Public Colleges had a historical past of claims of issues in different states, together with allegations of excessive workers attrition charges in California and college closures in Washington, in line with press reviews and an on-line publish written by a former Inexperienced Dot instructor. Sigee stated he was unaware of these allegations on the time of his vote.
Inexperienced Dot didn’t reply to the Observer’s requests for remark.
After two years beneath Inexperienced Dot management, Martin Luther King—a campus that serves largely Black and brown college students—was nonetheless failing, in line with projected rankings the district launched in 2024. The board terminated its contract early in June 2024.
Board members then felt pressured into closing the varsity, Sigee stated. “Had we not closed it, with having failed for seven years in a row, then we’d have run the chance of getting the state take over our district [again].”
In response to an Observer query concerning the Beaumont college’s tutorial efficiency, a spokesperson for Inexperienced Dot Public Colleges famous through e-mail that its associated group, Inexperienced Dot Public Colleges Southeast Texas, ran the varsity and was dissolved in June 2024, including: “We shouldn’t have further background or context that we are able to present.”
Beaumont ISD’s leaders selected a distinct path for his or her different three Texas Partnership faculties. As of 2023, this trio nonetheless had failing rankings after three years beneath non-public management, reviving the potential of one other state takeover. In March 2023, the varsity board selected handy the colleges over to a distinct non-public operator: TFS-Texas, incomes one other two-year reprieve from sanctions. TFS-Texas is a part of a community beneath a Colorado-based mum or dad nonprofit, Third Future Colleges, that operates faculties in 4 states.
In August 2024, Beaumont ISD reported its projected rankings for the prior college yr, revealing that two of the three campuses TFS-Texas runs—Fehl-Worth and Jones-Clark Elementary—had been nonetheless failing, which meant it might nonetheless face the specter of one other state takeover if take a look at scores didn’t enhance.
“Regardless of the failures of earlier companions, I used to be hopeful that TFS would succeed the place others had not,” Superintendent Shannon Allen wrote in a March op-ed.
On March 1, Third Future Colleges introduced it was ending its partnership with Beaumont ISD early, on the finish of the 2024-25 college yr, saying the district was not passing alongside sufficient income to the nonprofit.
In her op-ed, Allen wrote that the constitution community was demanding $1 million extra this college yr and $2 million extra the following when the district had already “made monetary concessions” after coming into into an settlement to pay the group $8.27 million. She wrote, “Beaumont ISD is not going to be pressured. … As a substitute, we embrace the chance to take again management, strengthen these faculties, and construct a future that’s in one of the best curiosity of our group.”
Per its contract with the nonprofit, Beaumont ISD pays at minimal for the prices of constructing upkeep, scholar transportation, meals providers, some particular training providers, safety, and accounting personnel for the three district campuses that TFS-Texas runs.
In a assertion, Third Future Colleges wrote: “These excessive income holdbacks forestall TFS from delivering its instructional programming to the wonderful customary that the scholars and lecturers anticipate.”
Some constitution operators’ struggles to “flip round” faculties might stem from the identical challenges confronted by public college districts to start with: systemic inequalities, a instructor scarcity, and the system of high-stakes testing that determines rankings.
For years, mother and father and lecturers have protested the state’s accountability score system, which Quinzi referred to as an “oversimplification primarily based completely on the take a look at rating.” With the specter of state takeover tied to those scores, many district leaders have been pushing again on how the state grades faculties. TEA paused rankings in 2020 and 2021 in the course of the peak of the pandemic, then launched numerical rankings in 2022 however didn’t assign an official letter grade for failing faculties. Later, a number of districts sued TEA blocking the company from releasing rankings for the 2022-23 and 2023-24 college years, although some districts have printed their very own projected rankings for these years. After a state appeals court docket dominated the 2022-23 rankings could possibly be launched, TEA launched these rankings on April 24.
Shelly Haney, a longtime educator, turned Midland ISD’s Goddard Junior Excessive from an F-rated to a C-rated college as principal from 2013 to 2019. That’s why, in 2019, then-superintendent Orlando Riddick requested her, whereas she was nonetheless Goddard’s principal, to start out a nonprofit and apply for a Texas Partnership contract to run the varsity along with Bunche Elementary Faculty and later different elementaries, Haney stated. The constitution group can be referred to as the REACH Community.
Bunche Elementary had gone via ups and downs for the reason that campus reopened in a brand new constructing in 2015 to accommodate a rising low-income Hispanic inhabitants in southeast Midland. In its first yr, it failed state requirements. It improved, nevertheless it was failing once more by the point Riddick approached Haney, in line with state accountability reviews. The concept was to use Haney’s profitable strategies from Goddard, which included offering small-group assist for struggling college students.
Haney introduced in a full-time household liaison, a disaster counselor, studying interventionists, and chess and mariachi applications for college students, efforts that helped enhance attendance, Haney stated.
However Haney bumped into the identical obstacles that her predecessors at Bunche had confronted: group poverty, low instructor retention, after which COVID-19. There have been early indicators of hassle when Bunche’s new principal give up in September 2019, 4 weeks after the varsity yr began. Three extra principals left in the course of the 4 years REACH was in operation. Amid instructor shortages that received worse in the course of the pandemic, Midland ISD waived certification necessities —as allowed beneath state regulation—and there have been fewer skilled lecturers accessible within the district’s hiring pool to assist perform reforms, Haney instructed the Observer.
Standardized take a look at scores didn’t enhance sufficient to stave off Midland ISD’s fears of a state takeover. Haney instructed the Observer that another Texas Partnership faculties have a “technique of hunting down your college students” via functions, whereas hers admitted all college students zoned to the varsity, which made bringing scores up tougher: “The objective was simply to serve the neighborhood college students. … I don’t need it to sound like excuses. In the end, we didn’t meet our targets.”
Within the 2022-23 and 2023-24 college years, Bunche acquired an F, primarily based on TEA and districtratings. Even Goddard, which Haney had boosted to a C-rated college beneath district management, declined, receiving a D and F in these years. Midland ISD didn’t renew its contract with REACH after the 2023-24 college yr.
Texas Partnership agreements are usually mild on monetary necessities, typically requiring little greater than that operators provide annual monetary statements and “unqualified audit opinions”—clear audits freed from adversarial feedback or disclaimers concerning the group’s funds—along with working within the black.
Nonetheless, 4 operators didn’t present any monetary statements or audits in a number of contract years, as their agreements required, in line with public data requests and districts’ emailed responses.
Three operators completed at the very least one yr with a deficit, in line with their 990 tax kinds, despite the fact that their agreements required them to “function inside accessible funding,” guarantee “statements mirror a optimistic internet asset quantity,” or preserve expenditures that “don’t exceed whole revenues for the fiscal yr.”
Colbert, the varsity finance professional and former legislator, stated that faculty districts goal to make sure that organizations function and not using a deficit as a result of: “It’s important to find the money for to have the ability to do what you contractually promised you had been going to do. And for those who don’t find the money for to have the ability to do this, we don’t have the arrogance that you would be able to fulfill your contract.”
Previous to being contracted by SAISD in 2019 to run two preschools—the Caroll and Tynan Early Childhood facilities—the Michigan-based nonprofit HighScope Instructional Analysis Basis centered on analysis and growing preschool curriculum.
As first reported by the San Antonio Report, HighScope didn’t submit a monetary assertion to the district within the 2021-22 college yr—a requirement in its partnership settlement—for its preschool operations. The group’s contract additionally required the campus to take care of “a balanced price range and steady money move.” HighScope started its San Antonio partnership with an unrelated working deficit of $766,000, and it didn’t come out of its deficit till two years into the partnership in 2021, in line with its IRS Kind 990s.
At a December 2022 college board assembly, San Antonio ISD Chief Technique Officer John Norman instructed board members that HighScope “didn’t meet any of their targets” and was “beneath district common for each [parent and teacher satisfaction]” for Carroll. TEA information exhibits the proportion of scholars proficient in literacy had declined at each faculties. In 2023, SAISD terminated the contract early.
The Observer additionally couldn’t discover incorporation filings for HighScope within the Texas Secretary of State database of entities doing enterprise in Texas, and the state comptroller’s taxable entity database signifies the group by no means registered with the secretary of state. Darren Moore, a nonprofit lawyer and Baylor Regulation Faculty professor, stated that Texas regulation requires nonprofit firms that do enterprise within the state to register. HighScope’s president Alejandra Barraza didn’t reply to the Observer’s request for feedback.
Faculty Innovation Collaborative, which was contracted by San Antonio ISD in 2019 to run 4 faculties, fashioned as a nonprofit in 2019 however was required to forfeit its existence for failure to pay taxes in 2021 (earlier than being reinstated in 2022 and forfeiting existence once more in 2024), per the secretary of state. There’s additionally no report that Faculty Innovation Collaborative utilized for federal tax-exempt standing within the Inner Income Service database. San Antonio ISD terminated its contract early with the group in 2023. CEO Doug Dawson didn’t reply to the Observer’s request for remark.
Colbert described these sorts of paperwork points as pink flags. “These are public tax {dollars} which can be going to pay these individuals, and there are necessities of the regulation that they’re not assembly,” he stated.
Statewide, public college districts spend a median of 4 p.c on administrative or non-program bills, in line with the Texas Affiliation of Faculty Boards. The 22 Texas Partnership operators whose contracts ended typically reported spending greater than that on their overhead. However as a result of some operators ran different applications in addition to partnership faculties and a few districts paid the majority of program bills for partnership campuses straight, it’s tough to find out a median overhead expense fee.
HighScope reported on its Kind 990s spending greater than half its whole bills on overhead prices in the course of the three years it operated the 2 San Antonio preschools, nevertheless it didn’t separate out its Texas Partnership spending from its unrelated operations. Its president, Barraza, acquired a wage of over $200,000 a yr in each 2022 and 2023, in line with the 990s.
TFS-Texas additionally reported spending greater than half its bills on administrative prices in its 990s from 2021 to 2023. Mike Miles, CEO of the Third Future Colleges community for many of that point, was paid an annual wage between $230,000 and $260,000 by the Colorado mum or dad group. For fiscal yr 2023, TFS-Texas reported a unfavorable $2.7 million year-end steadiness in internet belongings—despite the fact that its contracts with Ector County ISD and Austin ISD required a “optimistic internet asset quantity” or “optimistic money move on the finish of the yr.” TFS-Texas solely runs Texas Partnership faculties and has no different operations within the state.
“That’s cash that’s not being spent on the scholars,” Colbert stated of TFS-Texas’ excessive administrative prices.
A spokesperson for Third Future Colleges declined in November to clarify the supply of the 2023 deficit to the Observer and didn’t reply to the outlet’s questions for this story concerning the supply of its deficit and excessive overhead. TFS-Texas confronted media scrutiny final yr from the Observer and different shops over out-of-state fund transfers—although the TEA cleared the nonprofit of wrongdoing in an investigation—and the Observer lately reported on accusations the group failed to show required lessons in Midland.
Quinzi, who reviewed a abstract of the Observer’s findings on this story, believes the Texas Partnership program is failing: “These constitution operators will not be confirmed turnaround fashions.”
Relating to Texas Partnership operators usually, Quinzi, the lecturers union authorized counsel, stated: “They’re going to place as a lot cash into their pockets and the least sum of money within the classroom.”
She stated the state has “rigged” the system by forcing college boards to decide on between closing faculties or contracting non-public operators to keep away from state takeover.
“It’s the TEA that decides the ‘A-F’ rankings. It’s the [TEA] that determines what the standardized take a look at scores must be to get these rankings,” Quinzi stated. “Then it’s additionally TEA that takes over public college districts as a result of they’re low-rated. So it’s only a self-interested circle. The intent was by no means on enhancing faculties.”
In 2019, SB 1882 co-author Menéndez filed one other invoice making an attempt to make partnership operators extra accountable to the general public by requiring districts to seek the advice of with campus personnel and to get 75 p.c of fogeys to approve a contract earlier than it was signed. However the invoice by no means acquired a committee listening to.
This legislative session, Democratic Senator Nathan Johnson and Republican Consultant Gary VanDeaver launched what could possibly be an alternative choice to the Texas Partnership program. As a substitute of handing off a failing campus to a personal operator, Senate Invoice 235 and its Home companion invoice would give college districts a two-year reprieve from state takeover in the event that they flip the campus right into a “group college.” Below that mannequin, mum or dad, campus, and faculty district representatives would work collectively to create a turnaround plan. Each payments are languishing in committee.
“The findings on SB 1882 partnerships spotlight severe considerations concerning monetary accountability, transparency, and academic outcomes,” Johnson instructed the Observer. “Regardless of what might have been one of the best of intentions and assumptions that appeared affordable on the time, the SB 1882 outcomes clearly point out the necessity for a distinct strategy.”
Menéndez instructed the Observer that the Texas Partnerships program has deviated from his authentic objective.
“We appear to be constructing a reproduction public college system with constitution faculties, which I don’t suppose was ever the intention,” he stated. “I don’t imagine that this technique has labored. What I feel it’s been doing, it’s been taking already very restricted assets—as a result of the state has refused to broaden its funding in our community-based public faculties, and it’s simply dividing it additional.”
This text initially appeared in The Texas Observer, a progressive nonprofit information outlet that has coated the Lone Star State since 1954.
