A Good Question Being Raised

in Susan Ohanian's comments before an article about a charter school closing is why there is so much interest by crooks--er, hedge fund types--in scamming the taxpayers by opening up charters?

If you guessed our illustrious elected officials, including a Democrat, Bill Clinton, you'd be right, as she quotes a Democracy Now interview:

There's a lot of money to be made in charter schools, and I'm not talking just about the for-profit management companies that run a lot of these charter schools.

It turns out that at the tail end of the Clinton administration in 2000, Congress passed a new kind of tax credit called a New Markets tax credit. What this allows is it gives enormous federal tax credit to banks and equity funds that invest in community projects in underserved communities and it's been used heavily now for the last several years for charter schools. I have focused on Albany, New York, which in New York state, is the district with the highest percentage of children in charter schools, twenty percent of the schoolchildren in Albany attend are now attending charter schools. I discovered that quite a few of the charter schools there have been built using these New Markets tax credits.

What happens is the investors who put up the money to build charter schools get to basically or virtually double their money in seven years through a thirty-nine percent tax credit from the federal government. In addition, this is a tax credit on money that they're lending, so they're also collecting interest on the loans as well as getting the thirty-nine percent tax credit. They piggy-back the tax credit on other kinds of federal tax credits like historic preservation or job creation or brownfields credits.

If there is anything Congress does anymore or in the recent past that isn't designed to screw over the taxpayers to benefit the few, I'd like to know what it is.