Education, Emergency Managers — April 28, 2014 at 8:34 am

SHOCKER! For-profit charter Mosaica discovers it can’t make a profit from underfunded schools


Mosaica, the for-profit charter group that has been running Muskegon Heights schools has agreed to end their contract with the school district. Why? They couldn’t make a profit:

“To be brutally honest – they had to be brutally honest to themselves as well with us – in their model as a for profit company, their profit was not there,” Weatherspoon said. […]

In order to pay teachers, vendors and staff for the rest of this school year, Weatherspoon is asking the state for a $1.4 million loan. That loan would go to the original Muskegon Heights Public School district, which would then funnel the cash to the new charter district it authorizes, Muskegon Heights Public School Academy. […]

The money from the loan would cover expenses through June 30, 2014. It’s not clear yet where the district will get money to start the new school year or the estimated $650,000 it’ll need to finish repairs to its four school buildings. Weatherspoon says one of the buildings will likely be closed instead of being repaired because it’s expected to take about $400,000 to fix.

So we’re clear, the company made a business decision to take over the schools in Muskegon Heights under the presumption that they could do a better job than the local school district from a financial standpoint. Then, after underestimating the costs for education special education students, how much it would cost to make the buildings usable, and how much it would cost to run the schools overall, decided they couldn’t actually do it on the amount of money they got from the state, much less secure a profit for their shareholders.

I’m going to go out on a limb and say they are the ONLY ones surprised by this. Most anyone looking at this situation would acknowledge that you can’t run a school system that is so challenged by widespread poverty and so massively underfunded and make money on it from our tax dollars.