Monday, March 31, 2008

Ohio Teacher Union Sicks IRS on Charter Managment Company

From the The Columbus Dispatch:
More than two dozen schools run by Ohio's largest charter-school operator have illegally claimed tax-free status, a teachers union alleges.

More charter schools run by other for-profit operators probably shouldn't be considered nonprofit organizations, the Ohio Federation of Teachers contended yesterday in announcing that it had asked the IRS to examine whether White Hat Management schools should pay taxes.

Akron-based White Hat operates 34 Ohio schools that received about $85 million in state per-pupil aid in the previous school year. That is why the federation targeted White Hat, said union President Sue Taylor. The union has been critical of charter schools and has questioned White Hat's practices before.

The union contends that some of White Hat's schools -- Life Skills Centers for dropouts and HOPE academies -- should pay taxes because the for-profit White Hat is too involved in their day-to-day business. The company regularly takes as much as 97 percent of the schools' state funding for its services.
The White Hat Management Company, of course, denied any wrongdoing, claiming that the IRS knows of their practice.

Let's assume that White Hat is not doing things by the IRS rules, how does that lead to this statement:
Charter schools, which are privately run but publicly funded, can't turn a profit in Ohio. But they can hire for-profit companies to run them.

"These are all abuses of Ohio taxpayer dollars," Taylor said. "The charter-school movement has been a disaster for our students.

"It's a loose system of anything goes."
I don't have any idea of how the students in the White Hat schools are doing, but if I had to guess they are probably doing OK since the groups runs so many schools. If they were an ineffective company they wouldn't keep getting contracts to run schools.

The question is no whether their tax practices are on the up and up, which is no small concern, but tangential to the real question, how are the students doing?

The unions appear to be running out of avenues of attack on charter schools if this charge is any evidence of their tactical bag of tricks.

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