Bullis Charter School has been awarded $2 million in forgivable loans through a federal relief program meant to help struggling small businesses pay employees and other big bills during the COVID-19 pandemic.
The Los Altos charter school applied for relief through the Payroll Protection Program (PPP) in order to offset an anticipated cut in state funding, and received the funding last month. Though the funding was primarily intended to assist small businesses that have shuttered or cut staff due to the pandemic, private schools and public charter schools can, and have, applied as nonprofit corporations in order to tap into the funds.
The $669 billion program is under increased scrutiny after U.S. Treasury Secretary Steven Mnuchin declined last week to disclose the recipients of the forgivable loans, raising concerns over the lack of public accountability and whether the money is reaching the intended recipients.
What has been disclosed to date, however, is that several charter schools in the North Bay and Southern California have received PPP funding in addition to Bullis Charter School. And charter school associations across the country have encouraged their membership to do the same.
Although charter schools are in many ways public institutions, receiving taxpayer funding along with oversight from a state or local chartering agency, the PPP underscores that they also serve as a dual role as private organizations that operate independently from public school districts. They can also use that status to apply for funding relief alongside private businesses that is otherwise unavailable to public schools.
The East Bay advocacy group In the Public Interest, which has long been critical of the proliferation of charter schools in California, released a report this month finding that Oakland charter schools received a combined $19 million in funding through the federal relief program. The group describes the use of PPP funds as a case of "double dipping" on public funds for the same purpose.
"Because charter schools are currently receiving full funding as public schools intended to maintain employees, while at the same time receiving funding as private entities that are also intended to maintain employees, taxpayers are left covering what appears to be the same bill twice," the report concludes.
Summit Public Schools, which operates a network of charter schools in California and Washington has also reportedly accepted at least $6.8 million in funding through the federal program, according to the New York Times. The network operates Summit Everest and Summit Prep in Redwood City and Summit Denali in Sunnyvale.
In a statement Tuesday, Bullis Charter School officials maintain that the PPP was tailored for nonprofit organizations as well, and that the roughly $2 million would be used to continue paying teachers and staff. Bullis Board Chairman Francis La Poll cited data showing the charter school receives significantly less funding per student than the rest of Los Altos School District, where it resides, and that already-low funding is expected to decrease next year.
Last month, Gov. Gavin Newsom unveiled his proposed 2020-21 state budget, which estimates that California faces a massive $54 billion deficit in the coming year, eliminating what had previously been a budget surplus before the pandemic devastated the state's economy. La Poll said the May budget's nearly 8% cut in state funding for schools is going to put a dent in the school's revenue at a time when costs are going up.
"Our teachers and staff worked extremely hard to provide high-quality online education experiences for our students this spring, and our school will face additional costs due to COVID-19 in the fall," La Poll said.
Bullis Charter School receives the majority of its $15 million annual budget from the Los Altos School District, which provides funding to the charter school based on the number of students it enrolls who live within the district's boundaries. In the case of the 2019-20 school year, the district transferred $8.3 million in funding to the charter school.
Charter school officials have long held that this funding is inadequate and far below the per-student funding Los Altos School District students receive, and has sought to fill the gap by requesting $5,000 per student in annual donations from its families. The charter school was expecting to receive close to $5 million in fundraising during the last school year, according to budget documents.
Bullis officials say that they are expecting a "significant decrease" in fundraising support for the coming school year, adding to the state cuts and putting the school in a difficult financial bind. Representatives from Bullis Charter School's foundation declined to comment.
During Bullis' charter renewal in 2016, staff at the Santa Clara County Office of Education warned that the charter school was too reliant on what it called "soft revenues," and that depending on financial contributions was a problematic way to balance a budget. At the time, more than one-third of the charter school's annual revenue was contingent on these donations and grants, and it was not clear whether the charter school had any guarantee the foundation could maintain its level of support in future years.
Outside of concerns about a big drop in funding from private sources, it does not appear that the charter school is poised for a massive decline in public funding. Los Altos School District Assistant Superintendent Randy Kenyon said they expect to transfer an estimated $8.1 million in funding to the charter school in the 2020-21 school year, only about $200,000 less than the current year. External sources of funding like the $2 million PPP loan does not affect the district's funding obligation for the charter school, Kenyon said.