On Tuesday, Spectrum News published a jaw-dropping report that shows Texas taxpayer dollars, intended for Texas schools, being diverted out of state to a Colorado charter school network. The founder of that charter school network? Mike Miles, the state-installed superintendent of Houston ISD.
Before being appointed to helm Houston ISD amid the Texas Education Agency’s takeover of the B-rated district and after he was run out of his superintendent role in Dallas ISD, Miles founded the Third Future Schools charter school network with three schools in Colorado. All three of those schools, as reporter Brett Shipp notes, have since struggled with academic performance, student enrollment, and financial stability.
They struggled so mightily, it seems, that Texas taxpayer money from Third Future’s Texas schools found its way to Third Future’s struggling Colorado schools. As the Spectrum News story recounts:
So why were Miles’ new Texas schools losing money? Third Future Schools’ 2023 audit shows of the $25 million public tax dollars being spent on Miles’ three Texas schools, $15 million was spent on teachers and supplies. The other $10 million, about 40% of the budget, was spent on unspecified administrative costs and services.
Spectrum News made multiple requests over several months for a detailed accounting of those administrative expenses. Third Future Schools never responded. However, included in publicly available financial audit records were the auditor’s notes revealing the deficit was “caused by the liabilities of other Third Future Network schools” outside of Texas and to “Third Future Schools Corporate” in Colorado.
This saga may seem surprising to those who have not paid close attention to the rapid expansion of privately run charter schools in Texas. But unfortunately, this behavior is not uncommon. Many of the 900 charter schools in Texas are operated by out-of-state, third-party companies, and each year when new charter schools are presented for approval by the State Board of Education, public school policy experts raise concerns about accounting practices and financial transparency.
Because these schools are privately run and operated without elected boards of trustees, Texas taxpayers have very little insight into how state funds supplied to these charter schools are spent.
Whether Third Future Schools violated any state or federal laws in how they handled funding intended for Texas schools remains to be seen. On Thursday, amid calls from community members and local elected officials for an investigation, Congresswoman Sylvia Garcia sent a letter to Secretary of Education Miguel Cardona asking for assistance from the Department of Education’s inspector general in reviewing the matter.
But something doesn’t have to be illegal to be unethical. At a time when public school districts are in severe budget crises, it’s remarkable that eight new charter schools are under review by the Texas Education Agency right now and could be sent by the end of this month to the State Board of Education with TEA’s recommendation they be approved.
“Not only do we have these swirling questions about this charter school network founded by TEA’s hand-picked superintendent, but we also have the state’s largest charter school chain, IDEA, now under state conservatorship after nine years of cartoonish financial scandals,” said Zeph Capo, president of Texas AFT. “Texas tax dollars belong in Texas public schools, serving Texas public school students, not subsidizing a charter CEO’s private jet or stabilizing a Colorado charter school. Until we can ensure that, we need a moratorium on all new charter schools in this state.”
On Wednesday, TEA issued a statement from Commissioner Mike Morath, who said the matter was being referred to TEA’s complaints department, even though he claims the news story “left out significant context.”
Miles, meanwhile, called the report “irresponsibly inaccurate” in a statement released by HISD. Notably, in responding elsewhere to the allegations of financial misconduct, Miles noted himself that the actions described by the Spectrum News story, including substantial administrative fees, are common practice among charter schools.