Florida’s State Pension Fund to Bail Out Edison?
By Michelle Armstrong
Democratic legislators and teachers in Flordia sharply criticized plans for the state pension fund to invest $182 million in Edison Schools, Inc., a for-profit school management company. While Henry Levin, director of the National Center for the Study of Privatization in Education, says that ventures likes Edison are rarely profitable, he thinks that with the right approach, the company just might be. "My guess is if they can move a lot of their effort away from managing of schools to becoming a proficient provider of tutoring and summer schools, then they do have a chance," he said.
Critics expressed shock that a fund that provides retirement benefits to teachers and other public employees would take such a large stake in a company that attempts to make money by privatizing school management. Liberty Partners, a New York-based money manager that currently invests $1.1 billion of Florida's $92 billion state pension fund, will own 96% of Edison's shares if the deal is sealed. Since 1993, Liberty has been investing the Florida pension fund-its only investor-and generating a 12% annual return. Many are concerned about the potential deal with Edison from a financial standpoint, considering that the company has had only one profitable quarter since its founding in 1992.
The article, entitled "Legislators, Teachers Balk at Deal for Edison Schools" appeared in the September 26 edition of St. Petersburg Times.