Will School District Bankruptcy Lead to “the Next Education Revolution”?

On September 23, 2015, I wrote a post about the Hillsborough County (Florida) Public Schools and some of its fiscal issues, one of which involves former superintendent MaryEllen Elia’s spending over half of the district’s financial reserves without school board knowledge or approval. The result is a drop in district reserves that threatens its bond rating, which could result in higher interest rates for the district when it borrows money.

The Hillsborough district has also had to tap into its fund balance in order to meet payroll at the end of the 2014-15 school year.

In short, Hillsborough schools’ finances are showing signs of instability.

It seems that this is what Rebecca Sibilia, CEO of charter school facilities financing nonprofit, EdBuild, is looking for in a traditional school district. After all, shaky finances might get shakier, which might lead a district down the dark path of bankruptcy.

Sibilia views bankruptcy of traditional school districts as “a huge opportunity” that could usher in “the next education revolution.” In other words, Sibilia wants to seize fiscally weakened traditional school districts and convert them into charter districts.

That’s Sibilia’s “revolution.” A pro-charter vulture circling.

On May 29, 2015, I posted about Sibilia’s background and her ambition to feed public dollars to privately-managed charters, under the euphemistic guise of “creating healthy competition” and “innovative community revitalization.”

  Rebecca Sibilia

Don’t you buy it, And don’t you Chapter 9 it, either.

On September 23, 2015, Jonas Persson of the Center for Media and Democracy’s PR Watch posted about Sibilia and her promoting bankruptcy as revolutionary charter expansion opportunity.  For the remainder of this post, I offer Persson’s exploration of Sibilia’s plan.

Exclusive: Bankruptcy Is a “Huge Opportunity” to Privatize Schools Says EdBuild

  By Jonas Persson on September 23, 2015 – 9:26 am

The school privatization movement has long sought to consign public schools and locally elected school boards to the dust heap of history to usher in a brave new world of “free market” schools instead of free and universal public education.

One big reason for this obsession?

There’s at least half a trillion dollars a year up for grabs for corporations that want to line their coffers with taxpayer money. K-12 education, Rupert Murdoch explained in a press release a few years ago, is a “$500 billion sector in the U.S. alone that is waiting to be transformed.”

But the transition to for-profit education has been too slow for some advocates who have some new and rather drastic ideas on how to pick up the pace, according to information obtained by the Center for Media and Democracy/PRWatch.

“Bankruptcy Might Be the Thing that Leads to the Next Education Revolution”

In a year which marks the 10^th anniversary of Hurricane Katrina, school “reform” advocates gathered in New Orleans under the aegis of billionaire Betsy DeVos’s American Federation for Children (AFC).

Held at the luxurious Hyatt Regency Hotel in the Business District—far from the wards devastated by Katrina—the AFC Policy Summit was a celebration of New Orleans’ school privatization spree in the aftermath of the disaster took the lives of 2,000 Americans and destroyed entire neighborhoods.

But in the absence of a new hurricane that would sweep away public schools, a man-made calamity might do the trick. Such was the argument of Rebecca Sibilia, who is the CEO of a new non-profit education group: Edbuild.

“When you think of bankruptcy … this is a huge opportunity. Bankruptcy is not a problem for kids; bankruptcy is a problem for the people governing the system, right? So, when a school district goes bankrupt all of their legacy debt can be eliminated . . . How are we going to pay for the buildings? How are we going to bring in new operators when there is pension debt? Look, if we can eliminate that in an entire urban system, then we can throw all the cards up in the air, and redistribute everything with all new models. You’ve heard it first: bankruptcy might be the thing that leads to the next education revolution,” Sibilia explained.

“A Naked Power Grab”

“This sounds like an attempt at a naked power grab,” Saqib Bhatti an expert in municipal finance with the Roosevelt Institute told the Center for Media and Democracy. Bhatti explained how bankruptcy could potentially lead to the kind of public-to-private “redistribution” Sibilia has in mind.

“Once you’ve cleared any hurdle the state has set up and file for Chapter 9 bankruptcy, the case goes before a federal judge who reviews the bankruptcy plan the municipality has submitted. The judge can only accept it or reject it, and is not allowed to propose any changes. This gives you plenty of leeway to impose radical policy changes under the guise of saving money. You could, for example, turn traditional public schools into charters and undo union contracts,” said Bhatti.

Bhatti was drawing upon his experience examining the Detroit bankruptcy.

The Detroit Bankruptcy Blueprint

Two years ago, the city became the largest in U.S. history to file for federal bankruptcy protection.

“Conventional wisdom,” Bhatti wrote in In These Times, “held that bloated pensions had bankrupted Detroit.” But, as he demonstrated:

“[The] bankruptcy was not borne out of financial necessity and was not a foregone conclusion. It was a political decision made by state officials. Gov. Rick Snyder and the Michigan Legislature chose to push the distressed city over the edge in order to accomplish two otherwise difficult political goals: slashing pensions and regionalizing the Detroit Water and Sewage Department.”

Using a phrase coined by Naomi Klein to describe the corporate takeover of public schools in New Orleans post-Katrina, Bhatti referred to the bankruptcy push as “disaster capitalism at its finest.”

There is more, including more about Detroit, as well as Illinois Governor Bruce Rauner’s push for the Chicago Public Schools to declare bankruptcy. For the conclusion of Persson’s excellent and informative post, click here.

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Schneider is a southern Louisiana native, career teacher, trained researcher, and author of the ed reform whistle blower, A Chronicle of Echoes: Who’s Who In the Implosion of American Public Education.

She also has a second book, Common Core Dilemma: Who Owns Our Schools?, published on June 12, 2015.