Governor Andrew Cuomo hasn’t minced words about the challenges the State of the New York will face paying for schools, healthcare, and local aid if the federal government doesn’t come through with money for states and localities in the next stimulus bill.   

What You Need To Know

  • The Paycheck Protection Program is a federal loan designed to provide a direct incentive for small businesses to keep their workers on the payroll
  • At least 21 upstate New York charter schools received between $350,000 to $2 million from the federal program; many in New York City did as well
  • According to the National Alliance for Charter Schools, charter schools are public schools
  • Traditional public schools are ineligible for PPP

“I want to be very clear about what this federal bill means to New York,” he told reporters on Wednesday. “The way we did the budget this year, the state budget, is that we basically had a big hole in terms of what the revenues will be. The revenues are what will be provided by the federal bill.”

Most school districts across the state, which put their budgets up for a public vote in June, have had to make deep cuts to next year’s budget because federal stimulus has, so far, not been forthcoming.

But rather than making cuts, charter schools in New York are reaping the benefits of a different kind of federal money: the Paycheck Protection Program.

PPP is a federal loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses. 

Valerie Strauss of the Washington Post noted this in her July 27th column:

“Charter schools received emergency stimulus money from Congress from the same fund that traditional public schools did — but some charter schools decided to apply for PPP loans as well, saying that they are underfunded through regular funding formulas and had a right to seek more aid. Other charter schools chose not to apply for loans, saying it would be double-dipping in federal aid funds.”

According to the database of companies that received SBA PPP loans of $150K or more created by Pro Publica, at least 20 upstate charter schools received between $150,000 to $2 million from the federal program.

These include charters in Buffalo, Niagara Falls, Rochester, Syracuse and Albany.

KIPP Tech Valley Charter School and Albany Community Charter School have merged for the 2020-2021 school year. But in April, each school received over $1 million in loan money from the federal Paycheck Protection Program.

Executive Director Stephanie Valle told Spectrum News via email, “We applied for the PPP loan because, as a non-profit, we were eligible and to guarantee we were able to preserve jobs while also delivering needed resources and support to all of our students and families in a time of extreme uncertainty.”

According to Valle, the schools focused the PPP loan on salaries, “allowing us to both avoid teacher and staff layoffs as well as maintain average weekly salaries for all of our hourly employees, even when they couldn't report to work or complete their work remotely.”

Traditional public schools aren’t eligible for PPP.

The windfall for charters was noted by the Network for Public Education, a public school advocacy group.

“At the end of the day, we found that over 1,300 charter schools around the U.S. and their non-profit or for-profit management companies secured between $929 million and $2.2 billion,” said Carol Burris, the executive director of the Network for Public Education. “This is money that is going to schools that never lost a penny during the pandemic.”

Not every charter school in New York State applied for PPP. According to the Network for Public Education, which examined the SBA’s database, 144 New York state charter schools and management organizations applied. There are about 320 charter schools in New York State, according the State Department of Education.

Some charters may have been too large to apply; for example, Success Academy did not apply for PPP. If a business has over 500 employees, it is ineligible for PPP.

“Of the ones we know, the amount of money that they got, the New York State Charter sector got between $126 million and $293.2 million,” Burris said.

The 21 charters in upstate cities accounted for between $10.2 million and $24.85 million.

The numbers aren’t specific because the SBA database provides ranges of funding, not exact amounts.

“The whole point behind the Paycheck Protection Program was that businesses would not lay off their staff.  But none of these schools had to lay off staff (in 2019-2020) because they were getting the same funding they were getting before COVID hit,” said Burris.

In planning for next year (2020-2021), public schools around the state have had to implement deep cuts as well as staffing layoffs. 

Charter schools would have had to make similar cuts for the 2020-2021 school year that district schools have had to make, but due to PPP money, many of their staffers are safe. There will be no layoffs at either Kipp Tech Valley Charter School or the Albany Community Charter School next year.

In her emailed statement to Spectrum News, KIPP Tech Valley Charter School Executive Director Stephanie Valle said, "Additionally, maintaining full staffing allows us to ensure we can start this next school year meeting the needs of our students and families, including a deep investment in the resources our students need to learn whether in-person or remotely.”

“I think when most of us think of PPP we think of the mom and pop barber shop, or the candy store on the corner or the beauty parlor that’s now going under because of COVID,” said Burris. “We don’t think of charter schools, which claim they are public schools.”