Oakland Needs a Moratorium on Charter Schools

The proliferation of charters in the city has left traditional public schools without enough money to educate children with special needs.

For years, opponents of charter schools have contended that they harm traditional public schools by siphoning off students and the state funds used to educate them. But this argument has never gained much traction in California, and charter schools remain popular. However, the recent controversy involving Obamacare and the cancellation of cheap health insurance plans offers a striking parallel to the problem charter schools create for school districts, and may provide the best reason yet for why Oakland needs a moratorium on charters.

Over the past month, millions of Americans have received notices stating that their health insurance plans are being canceled because the plans do not meet the minimum coverage requirements in the Affordable Care Act. The cancellation notices sparked a firestorm of criticism because they directly contradicted a promise President Obama had made about his signature health care law — that people could keep their insurance plans if they liked them.

After apologizing for the cancellation notices and his past misstatements, the president requested that states allow insurance companies to keep offering the inferior plans for at least one more year. And while many states have indicated that they will honor the president’s request, officials for Covered California — the state’s version of Obamacare — voted unanimously last week to let the less-comprehensive plans expire at the end of 2013. As a result, about one million previously insured residents will have to buy new, potentially more expensive plans on the Covered California insurance exchange by next month.

The 5-0 vote by the Covered California board of directors quickly drew criticism from consumer groups and some politicians. But the reasoning behind the decision was sound. Allowing one million people to maintain their cheap, noncompliant plans could harm Obamacare and force the rest of us to pay higher health insurance premiums, while potentially requiring the government to provide more financial subsidies to the plan.

Why? Obamacare, at its core, is based on two simple and laudable goals: namely, that patients with serious existing illnesses shouldn’t be denied health insurance, nor should people who can’t afford to buy coverage. But achieving these goals is costly. So the Affordable Care Act finances them in part by requiring young, healthy people to purchase comprehensive health-care coverage. It’s called the individual mandate and it’s premised on the fact that young, healthy people don’t often get sick, and thus don’t really use their health coverage. Requiring them to buy health insurance is designed to provide insurance companies with the extra money needed to pay for treating the sick and the poor.

However, many consumers who currently have the noncompliant plans are young, healthy, and well-off. And thus allowing them to keep these plans — and not requiring them to buy more expensive, comprehensive ones — could leave Obamacare without enough money to pay to treat those who need health care the most. In fact, this concern is precisely why Covered California’s board voted unanimously to kill the old plans.

Using the same basic reasoning, the state should allow cities like Oakland to enact a moratorium on charter schools. Why? At their core, charter schools are not that much different from the old insurance plans: They often don’t supply comprehensive educational services, or at least not at the level that traditional public schools must provide under the law.

Most importantly, many charters do not serve students with special needs. And educating these kids, as traditional schools must do under the law, tends to be costly (much like it’s expensive to care for sick and poor patients). According to its 2013-14 budget, the Oakland Unified School District projects it will divert at least $30.9 million from its $277 million general fund budget this school year to subsidize the costs of special education and transportation for children with special needs.

But charter schools don’t shoulder that same burden. In a report last week, the San Francisco Chronicle noted that only 5 percent of students in Oakland charter schools were enrolled in special education programs, compared to 11 percent of students in the public school district. Some charter schools, in fact, serve no or only a few children with special needs. “We have to provide it,” Oakland school board member Jody London said in an interview, referring to special education. “We can’t say ‘no.’ If we don’t provide it, we’ll get sued.”

Charter schools, however, don’t typically face such problems. That’s why London is now leading a campaign to block more charter schools from opening in the city. Oakland already has nearly forty charter schools — far more per capita than any other city in the state. And if it had fewer charters, then the city’s traditional public schools would have more students without special needs. And because non-special-needs kids are cheaper to educate, they would help finance the costs of serving students in special education programs — much like how young, healthy, well-off people finance the costs of treating poor and sick people under Obamacare.

However, under current law, school districts can’t do what Covered California just did. Districts, in fact, have no real power to block new charter schools from opening, let alone cancel the ones that already exist. As a result, the number of charter schools in Oakland likely will grow, and the financial strain of educating special-needs kids will intensify for the city’s traditional schools.

But it shouldn’t be that way. California shouldn’t have one system that has a way to pay for those in need and another that does not.


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