This year's Floridian of the Year has parlayed his experience as an education policy wonk into one of the fastest-growing for-profit charter school management companies in the nation, Charter Schools USA.
After the state Legislature passed the law authorizing charter schools in 1996, Hage left the foundation and started his own consulting group, giving advice to charter school operators on how to get their applications approved by school districts. A year later, he started Charter Schools USA with less than $5,000.
Charter schools first appeared in the U.S. in the early 1990s, created as a way to give parents and students more choice. Typically, a group or organization petitions a local school district to start a charter school, which often has a particular specialty or theme—art, for example, or math. If approved, the responsibility for running the school passes to the group’s board of directors.
Founding organizations may consist of groups of parents, teachers, non-profit groups or universities. Some founding groups build and operate charter schools themselves — hiring teachers, developing curriculums and managing their own financial affairs. But most turn to operating firms like Charter Schools USA.
In exchange for freedom from many of the regulations that apply to traditional public schools, charters receive less funding and must meet performance standards to stay in business. In Florida, for example, charters receive between 68% and 71% of what traditional public schools get, according to a TaxWatch report.
Charters in Florida get a $6,383 per-pupil state allocation for each student they attract (minus an “administrative fee’’ assessed by the local district) but receive few funds from locally levied school-related taxes that can be used for school construction. Eligible charters split $55 million in state money to fund school construction. Charters can receive private donations but can’t charge tuition.
Operating companies like Charter Schools USA make money by creating efficiencies of scale in exchange for a fee — typically, Charter Schools USA’s fee is around 10% of the school’s budget. Overall, Hage says, the charter schools his firm operates in Florida get by on about two-thirds of the money spent on each pupil in a traditional public school.
Making those numbers work, he says, requires innovation and the ability to operate outside the regulatory box.
By not having to build to the state’s byzantine school building code and follow onerous bidding requirements, for example, Hage says he can build schools at half the cost of traditional public schools and can do it faster, typically taking about six months from groundbreaking to opening compared to over two years for traditional public schools.
Another cost-saving measure is combining elementary schools and middle schools on one campus, with shared facilities such as a gymnasium or cafeteria. Charter Schools USA also typically builds schools without kitchens, instead bringing food in and reheating it to cut down on preparation costs.
Starting salaries for teachers are 3% to 5% less than at traditional public schools, though Hage says teachers can make up to $5,000 in bonuses and earn an average salary of between $35,000 and $55,000.
One of Hage’s biggest efficiencies is in administration. Hage says the Miami-Dade County district spends $2,036 per child on administrative costs, while Charter Schools USA spends $1,425. Operations and maintenance costs are also about a third of what large urban districts typically spend, he says.
Charter schools don’t make money managing schools until after the first few years, when enrollment has risen and startup costs are past, Hage says. At the Cherokee Charter School in Georgia last year, for example, Charter Schools USA didn’t receive a fee and paid $900,000 to keep the school on its feet.
Studies of charter school students’ performance show mixed results. A 2011 state Department of Education report found students at charters performed comparably to those in traditional schools on most achievement measures, including “level 3 or above” on FCAT math and reading scores. Charter school students also showed lower “achievement gaps” among white, black and Hispanic students in most areas. A University of Central Florida professor disputes those findings based on calculations he did that controlled for income.
Collectively, the population of charter school students in Florida is 37% white, 23% African-American and 35% Hispanic, compared to 44% white, 23% African-American and 27% Hispanic in traditional schools.
Among the 23 schools operated by Charter Schools USA that received grades from the state last year, 16 were given “A,” six were “B” and one was a “C.”