Excerpted from Democracy Now transcripts:

JUAN GONZALEZ: Yes, Amy, one of the things I’ve been trying now for a couple of years is to try to figure out why is it that so many hedge fund managers, wealthy Americans and big banks, Wall Street banks, have — executives of Wall Street banks, have all lined up supporting and getting involved in the development of charter schools. And I think I may have come across one of the reasons: there’s a lot of money to be made in charter schools. And I’m not talking just about the for-profit management companies that run a lot of these charter schools.

It turns out that at the tail end of the Clinton administration in 2000, Congress passed a new kind of tax credit called a New Markets Tax Credit. And what this allows is it gives an enormous federal tax credit to banks and equity funds that invest in community projects in under-served communities, and it’s been used heavily now for the last several years for charter schools. And I focused on Albany, New York, which in New York state is the district with the highest percentage of children in charter schools. Twenty percent of the schoolchildren in Albany are now attending charter schools. And I discovered that quite a few of the charter schools there have been built using these New Markets Tax Credits.

And what happens is, the investors who put up the money to build the charter schools get to basically virtually double their money in seven years through a 39 percent tax credit from the federal government. In addition, this is a tax credit on money that they’re lending, so they’re collecting interest on the loans, as well as getting the 39 percent tax credit. They piggyback the tax credit on other kinds of federal tax credits, like historic preservation or job creation or Brownfields credits. The result is, you can put in $10 million and in seven years double your money.

And the problem is that the charter schools end up paying in rents the debt service on these loans. And so, now a lot of the charter schools in Albany are straining paying their debt — their rent has gone up from $170,000 to $500,000 in a year, or huge increases in their rents, as they strain to pay off these loans, these construction loans. And the rents are eating up huge portions of their total cost. And, of course, the money is coming from the state.

So, one of the big issues is that so many of these charter schools are not being audited. No one knows who are the people making these huge windfall profits as the investors. And often there are interlocking relationships between the charter school boards and the nonprofit groups that organize and syndicate the loans. And so, there needs to be sunlight on this whole issue. And the state legislature right now is considering expanding charter school caps, but one of the things I press for in my column, there has to be the power of the government to independently audit all of these charter schools, or we’re not going to know how public dollars are ending up in the coffers of Wall Street investors.

Footnote (not mine): For those of you not well versed in tax law, remember this: a tax credit (as opposed to a tax deduction) is not deducted from your income before figuring out how much tax you owe. Instead, it is deducted dollar for dollar from the tax dollars you owe. Take, for example a new, young teacher who is making $50,000 and has a single tax deduction of $500. That lowers the teacher's adjusted gross income to $49,500. Roughly speaking, the teacher would have paid $12,550 or so in taxes on his $50,000 salary. With the $500 deduction and the reduction of income to $49,500, the teacher's taxes for that year would be reduced to $12,500 a reduction of $50. But change the deduction to a $500 tax credit. Instead of subtracting the $500 figure from the $50,000 the teacher earned during the year, you would direct/deduct it from the $12,500 she or he had to pay Uncle Sam. Instead of the $50 saving the tax deduction gave the teacher, she or he would get the full $500. Now multiply those numbers in terms of the kind of income hedge funds receive and consider the consequences.

Educated Response to the YouTube video of “racist white girls in Arizona.”

http://www.youtube.com/watch?v=PzTXVbArO4A

1. Why are you recording in shadow? Are you embarrassed about what you are saying? Afraid your friends and family might not agree with your blatantly racist attitude?
2. The Arizona law regarding immigration that you speak of was written almost entirely by a prison company whose profits are down. You can look this up. They need to increase profits, so they lock up illegal immigrants that, other than being in this country illegally, have committed no crime. Often they are just hard working people trying to create a better life for themselves and their families.
3. Politicians supported the law because they don’t want to be seen as incapable of leading and helping their constituents, which is their job. The idea of illegal immigration as a problem is a wonderful distraction from the reality of them having sold out their constituent in favor of the wealthy and corporate interests.
4. Do you honestly believe that illegal immigrants are stealing jobs? Often these are the people working two and three jobs that no one else wants because they don’t pay enough.
5. Let’s step back in time for a moment and think about how Arizona came to be a state. Arizona was part of a land grab from Mexico that occurred as a result of the Mexican-American war. Arizona, New Mexico and part of California were forcefully sold to the United States. So, when you so blatantly claim that “we were here first,” think deep and hard. In reality, they were here first.
6. Another point that is often neglected is this: we are all immigrants. The only non-immigrants are the Native Americans, and if you go back far enough even they immigrated.

Ironically, your claim to be American is in itself an error. Mexicans too are Americans, and so is anyone else who lives in North or South America.