Taxpayers Get Billed for Kids of Millionaires at Charter School

In Silicon Valley, Bullis elementary school accepts one in six kindergarten applicants, offers Chinese and asks families to donate $5,000 per child each year. Parents include Ken Moore, son of Intel Corp.’s co-founder, and Steven Kirsch, inventor of the optical mouse.

Bullis isn’t a high-end private school. It’s a taxpayer- funded, privately run public school, part of the charter-school movement that educates 1.8 million U.S. children. While charters are heralded for offering underprivileged kids an alternative to failing U.S. districts, Bullis gives an admissions edge to residents of parts of Los Altos Hills, where the median home is worth $1 million and household income is $219,000, four times the state average.

“Bullis is a boutique charter school,” said Nancy Gill, a Los Altos education consultant who helps parents choose schools. “It could bring a whole new level of inequality to public education.”

The growing ranks of U.S. charter schools in affluent suburbs are pitting neighbor against neighbor and, critics say, undercutting the original goals of the charter movement. Families who benefit cherish extensive academic offerings and small classes. Those who don’t say their children are being shortchanged because the schools are siphoning off money and the strongest students, leaving school districts with higher expenses and fewer resources for poor, immigrant and special- needs kids.

Bullis Charter School offers its 465 students a rich, interdisciplinary education unavailable in regular schools, said Principal Wanny Hersey. She compared Bullis to Silicon Valley companies such as Apple Inc. (AAPL) — whose leader, the late Steve Jobs, grew up in Los Altos.

Valley’s Spirit
“It really speaks to the spirit of the valley, trying to be a model for innovation and unleashing human potential,” Hersey said in an interview.

Bullis’s popularity shows that even parents in wealthy, top-performing school districts such as Los Altos have become disenchanted and are seeking alternatives. Bullis has higher state standardized test scores and offers more art and extracurricular activities than the Los Altos district, which is cutting music and increasing class size. Bullis has achieved this success while receiving about 60 percent of the conventional system’s public funding.

Every child deserves a good education, Buffy Poon, a Bullis mother of three and former EBay Inc. (EBAY) executive and Merrill Lynch & Co. banker, said in an interview.

“It takes all of us, the ‘haves’ and the ‘have nots’ (I cringe to use such blunt distinctions), to help improve the world.” Poon wrote in an e-mail to the Santa Clara County Board of Education, which oversees the school.

Netflix Founder
Parents in Los Altos Hills created Bullis in 2003 because they were angry after the district closed their neighborhood school, said Mark Breier, a founder of the school and former chief executive of Beyond.com.

To get advice on starting Bullis, Breier said he consulted with Silicon Valley luminaries and charter advocates. They included Reed Hastings, chief executive of Netflix Inc. and former president of the California State Board of Education and venture capitalist John Doerr of Kleiner Perkins Caulfield & Byers.

The founding parents won a charter from the Santa Clara County Board of Education after the Los Altos district twice rejected them. After giving spots to current students and their siblings, Bullis reserves half of its slots for residents of the neighborhood that fed into the old school.

First Charter
Last year, U.S. charter schools received $14.8 billion in local, state and federal money, up from $4.5 billion in 2003, according to an estimate by Washington-based Aspire Consulting LLC, which analyzes public-education finances.

One out of five of the country’s 5,200 charter schools is in a suburb, including affluent communities like Los Altos, according to the National Alliance for Public Charter Schools. In Minnesota, where the charter school movement began in 1992, charters in the Minneapolis-St. Paul region initially focused on black, urban neighborhoods and have since spread into wealthy suburbs, where schools are often predominantly white, according to research from the University of Minnesota Law School’s Institute on Race and Poverty.

A quarter of U.S. charter schools don’t participate in the federal free and reduced-price lunch program, compared with 2 percent at conventional public schools, according to a 2010 study by the Civil Rights Project at the University of California, Los Angeles.

Racial Balance
That means they aren’t serving a significant low-income population, Erica Frankenberg, co-author of the report and an assistant professor at Pennsylvania State University, said in an interview.

California’s 1992 charter law — the second in the U.S., after Minnesota’s — says schools should place “special emphasis” on “academically low-achieving” students and make an effort to reflect the “racial and ethnic balance” of the population in its district.

Last year, about 2 percent of Bullis students spoke English as a second language, compared with 11 percent in the district, county data show. Bullis had about half the percentage of Hispanic students or those with disabilities.

The charter school makes it tough for non English-speaking students to attend because it doesn’t have materials in Spanish, Doug Smith, a trustee on the Los Altos school board, said in an interview. Lower-income families aren’t even aware that the school is an alternative, he said.

Private School?’
On a recent afternoon, Anna Barragon, a 33-year-old immigrant from Mexico, picked up her kids at the Los Altos district’s Santa Rita Elementary School, down the street from Bullis. Every day, she drives by the charter school.

“I don’t know anything about it,” Barragon said of Bullis. “Is it a private school?”

“Bullis doesn’t fit with the spirit of the law,” said Gary Rummelhoff, a former president of the Santa Clara County Board of Education who sits on the board of a charter school in nearby San Jose. “It only existed to serve a very wealthy area.”

Bullis doesn’t discriminate because it accepts children through a random lottery and broadly reflects the demographics of the community, said Moore, son of Intel co-founder Gordon Moore.

“Bullis is a public school, free and open to all,” said Moore, who chairs the Bullis board.

The school plans to translate materials into Spanish and advertise in Spanish-language papers, he said. Bullis offers free lunches to low-income students and doesn’t participate in the federal program because of administrative costs, Hersey said. Less than 1 percent of students would qualify for the program, she said.

Broadway and Stocks
On a recent school day at Bullis, a kindergarten class studied Mandarin. Second-graders, sitting cross-legged under pictures of Bach, Mozart, Liszt and Stravinsky, learned to read music. A seventh-grade math class worked on algebra — a year or two before most U.S. schools — while an advanced student did linear equations at a high-school level. The school offers electives in Broadway dance and the stock market.

“We’re lucky to have so many different things we can study here,” said third-grader Ishani Sood, 8, taking a break from her Mandarin class.

A foundation set up to help fund the school asks Bullis parents to donate at least $5,000 for each child they enroll. Those who can’t afford to pay should discuss the reason with a foundation member, “recognizing that other school families will need to make up the difference,” the foundation said on its website.

‘Aggressive’ Requests
In an interview, Anna Song, a member of the Santa Clara County Board of Education, said she received about 20 phone calls from parents who felt pressured to give because of repeated solicitation in school parking lots, e-mails and phone calls.

“They are very aggressive in asking parents for money,” said Laurie Uhler, a former Bullis parent. “If you don’t pay it, word gets out that you aren’t doing your part.” Parents often refer to the payments as “tuition,” she said in an interview.

Donations are “purely voluntary,” Moore said. They are necessary because Bullis receives less public money than the district, which has a foundation that asks for $1,000 per child, Moore said. The Los Altos School District last year spent about $10,000 per student, according to state data. Bullis receives about $6,000 in public funding, primarily because it doesn’t qualify for money from a local tax that the school district receives. On average U.S. charter schools get 19 percent less local, state and federal money than traditional districts, according to a 2010 Ball State University study.

District Cuts
The Los Altos school system is cutting back. Since 2009, the district’s budget has fallen 9 percent to about $40 million. Los Altos cut 20 teaching and other positions and eliminated many of its music programs. Maximum class sizes in kindergarten through third grade rose to 25 from 20. Bullis averages fewer than 20.

Along with leaving the district with the hardest-to-serve students, Bullis-related expenses have hurt the Los Altos school system in other ways, said Randy Kenyon, an assistant superintendent.

For each district student who attends Bullis, the system loses about $5,000 in per-pupil funding, Kenyon said. Los Altos pays about $300,000 a year for the school’s facilities, he said.

Hersey said Bullis can provide its enriched education with the same amount of funding as the district, including donations, because it has less bureaucracy and overhead.

Bullis last month won an appeal of a lawsuit against the school district saying Los Altos must provide more space and buildings under the state’s charter-school law. Bullis currently operates out of portable classrooms. The case cost Bullis $900,000 in legal fees, according to its tax filings. The district spent about $700,000.

‘Sense of Entitlement’
Song, who originally supported the school, changed her mind when Bullis’s charter came up for renewal last month.

In an open letter, Song cited the school’s “sense of entitlement and lack of understanding of what it means to be part of public education.”

Bullis “performed abysmally in serving socioeconomically disadvantaged students,” she wrote. After a more than four-hour session, attended by 200 people, many of them Bullis parents wearing school T-shirts, the Santa Clara County school board voted to renew the charter, 5 to 2.

During a break, Arash Baratloo, a Google Inc. software engineer and Bullis parent, said he considered the $5,000 donation requested every year by Bullis to be “money well spent.” He previously sent his child to a private school where tuition was about $25,000 a year.

“It could be considered a bargain, but that’s not why we came,” Baratloo said. “We were looking for the best education out there, and that’s what we found.”

To contact the reporter on this story: John Hechinger in Boston at jhechinger@bloomberg.net
To contact the editor responsible for this story: Jonathan Kaufman at jkaufman17@bloomberg.net