Ohio's Charter Schools: Part I
Choice and Market-based Education
What has Privatizing Public Education Cost Us?

Barbara Brothers, PhD

(2014)

Over 7.4 billion Ohio taxpayer dollars have been transferred from public schools to charters as of fiscal year 2014. Charters are an experiment that began in Ohio in 1999 with an investment of $11 million, but the cost of the experiment for the fiscal year 2014 reached nearly a billion dollars (Appendix A). What evidence do we have that the experiment is working? Where have our public dollars gone? Has the privatization of our public education system produced something other than huge profits for a few individuals and the companies they operate? In addition to the billions of dollars of taxpayer money taken from the locally controlled public schools, what is the experiment costing?

Public schools transfer state and local taxpayer dollars on average of $7,000 per pupil to charters, payments ranging from over $5,700 to over $30,000 per pupil. In addition, the local school district must pay to bus charter students, because the state law requires busing for students in charter schools even for students who would have to walk to their local public school. For example, the Akron Beacon Journal reported that the Akron schools will need an additional $300,000 for fiscal year 2013-14 to transport children not in its schools. "Parents who withdraw from Akron schools, where their children often are not eligible for busing, can send them to a charter, and Akron must transfer all public dollars to the new school plus provide busing." The three-part charter school series reveals that not only do the public schools have to bear the expenditure, but also charter school students cost more to transport. Charter school students cost $6.18 per day or 44% more than the $4.30 per day for district students. In 2012, in the Akron School District, the additional transportation expenditure for charter school students was over $550,000.

Increasing numbers of school districts reduces efficiencies. Over a period of 100 years, Ohio reduced the number of Ohio school districts from about 4,000 to 613. William Phillis of the Ohio Coalition for Equity and Adequacy noted: "Reorganization of school districts as a means of improving the effectiveness and efficiency of the public common school system was a state priority for a century." As recently as July 2012, The Youngstown/Warren Regional Chamber called for consolidation of public school administrations. Yet Ohio has expanded the number of school districts (Ohio Revised Code treats a charter school as a school district) and their administrations by over 400 since beginning the "experiment"—56 new for fall 2013 alone. The Columbus Dispatch reported that State auditor Yost found that of the 17 new charters that opened in 2013 in Columbus, 9 closed within months, "costing taxpayers at least $1.6 million and leaving hundreds of students without schools." Our so-called experiment has produced a huge waste of taxpayer dollars and a significant loss of educational opportunities for students.

Charter schools pay more for administration and less for instruction. In a 2012 study published by the Education Policy Center of Michigan State University, the authors found that charter schools on average spend nearly $800 more per pupil per year on administration and $1,100 less on instruction (http://epaa.asu.edu/ojs/article/view/1016). These estimates would be low for Virtual Schools that have extremely high teacher-per-pupil ratios and pay very poorly.

Breakdown of per-pupil expenditure percentages in Ohio
  Public Charter
Administrative 12.69% 26.20%
Building operations 20.11% 11.69%
Staff Support 2.13% 5.41%
Pupil Support 9.06% 4.00%
Instructional Per-Pupil 56.01% 52.70%

Studies by the League of Women Voters in Florida and New Mexico have also noted that taxpayer dollars go not for teaching our students, but for administration (see Appendix B).

Reductions in state dollars available to public school districts are significant, especially when combined with fewer state and federal dollars. In Ohio this has specifically meant an even greater reliance on property taxes. The Ohio Supreme Court in the DeRolph IV reiterated earlier decisions of the 1990s that ruled that Ohio‘s overreliance on property taxes to fund Ohio schools is unconstitutional. Elimination of the state's 12.5 percent property tax rollback, a program established in the 1970s; revisions to the homestead exemption, which includes an income test set at $30,000 for our Ohio seniors who turn 65 (Policy Matters suggests $50,000 might be a more realistic and fair means test); and cuts to local government while raising sales tax kept by the state make it more difficult for schools to pass levies needed to replace state dollars for public schools.

The situation has only gotten worse since State Impact Member NPR Stations Ohio issued this report in August of 2011: "State budget cuts and failed local levies have left Ohio's schools desperate to trim costs and still maintain services. That leaves parents paying for what schools can no longer afford, including fees for extracurricular activities." In 2011 "roughly half of Ohio schools already required some form of pay-to-play." Education Week suggested then that one of five solutions for districts was for state legislature changes to how schools are funded. Things have only gotten worse: the legislature diverting ever more funds to private hands and fewer to locally controlled public school districts.

For example, Ohio's biennium budget for 2013 expanded the EdChoice program to include children in grade K and then grade 1 next year based on income and not on the performance of their local school. Unlike most voucher programs, it is not limited to children who would be attending a poorly rated school. The number of students who can use it is capped by the amount of state funding appropriated. About 4,000 children will be able to use this scholarship in the first year (2014-15), and then the number is to be expanded to include new students each year. Those children receiving it in the first year are supposed to be guaranteed the money for their entire K-12 education. MORE MONEY FOR PRIVATE EDUCATION EQUALS LESS FOR PUBLIC EDUCATION. As the Ohio Department of Education website states, EdChoice, which was about providing "students from underperforming public schools the opportunity to attend participating private schools," is now about expanding the funding of private education. No longer is the experiment being masked as improving education through competition. Rather, the legislature's agenda is to privatize education.

By including the EdChoice expansion in the budget bill, the legislature ended the public's ability to repeal a law that they had earlier rejected. This is yet another action that demonstrates that Ohio's so-called reforms are not about improving our public education system through choice and accountability but about using those words to destroy public education run by professionals and to turn it into a legislatively sanctioned deregulated business.

At the rate of increase in charters that the legislators seem determined to pursue, more than a billion dollars a year will go to private investors, bringing Ohio's total investment in the experiment in accountability and choice to over $11 billion and counting. There is, however, no moratorium on closing public schools. In fact, if Republican legislators have their way, a proposed revision to the State Constitution would leave us without a public school system and our future generations with "no right to public education in Ohio" (see Appendix C). Chris Readler, a citizen member of the Constitutional Modernization Commission, has introduced a proposal to remove the "thorough and efficient" clause from the Constitution, which provides the legal basis for the public system of education in Ohio.

As taxpayers of Ohio, we also lose because our tax dollars flow to these private investors and out of our local communities, the state, and even, in some instances, the country. Phillis points out that "the Gulen/Niagara Foundation/Concept Schools/Horizon Science Academies/Noble Academies enterprise has a foreign economic allegiance. This industrial complex is aggressively employing foreign charter school personnel and making business transactions with primarily Turkish-affiliated businesses" (8/7/2014 OE&A mailer). The bases of operation for many charter school chains are not located in Ohio. K-12, Inc., based in Herndon, VA, operates the Ohio Virtual Academy. "This company moves much of the annual $80 million of Ohio tax dollars out of state. The last CEO of K-12, Inc. was paid an annual salary in the range of $500,000 and owned millions of company stocks." Some of the other out-of-state, for-profit charter school companies that Phillis lists as removing tax funds from Ohio's economy include the following:

  • Imagine Schools, Inc.—based in Arlington, VA
  • The Leona Group, LLC—based in Phoenix, AZ
  • Mosaica Education—based in New York, NY
  • Connections Education, Inc.—based in Baltimore, MD
  • Global Education Excellence—based in Ann Arbor, MI
  • SABIS Educational Systems, Inc.—based in Eden Prairie, MN
  • National Heritage Academies—based in Grand Rapids, MI
  • Edison Learning, Inc.—based in Knoxville, TN

While there are some successful charters, none are better than the best of our public schools; most are worse: 87 percent of Ohio's charter school students attend a charter school with a D or F rating. At best, school choice is rhetoric trumping evidence; at worst it is graft and corruption. In September of 2013, The Columbus Dispatch published "Charter schools' failed promise," a front-page story about the academic performance of Ohio's public schools of choice. The story examines the results for these schools in the new state reporting system: on the whole, charter schools not only are no better than the traditional public schools they compete with but often are far worse. For example, ECOT's 4-year graduation rate is 35.3 percent, 5-year rate 37.8 percent, slightly higher but still over 25 points worse than the lowest urban school district, Cleveland, which checked in at 63.3 percent; OHDELA graduated 35.9 percent, also lower than Cleveland. Why are we putting more and more public dollars into supporting charters and charter chains when they have proven themselves to be less effective than our public schools?

Marketing of Charter Schools to the public has emphasized accountability and choice as leading the way "to improving public school systems by holding them accountable to market forces." This statement was made by David Hansen, former President of the Buckeye Institute and Governor Kasich's choice in 2013 to fill the newly created post in the Department of Education: the Office of Quality School Choice and Funding. But do Hansen and his fellow travelers apply those measures to the charter school industry? What evidence do Hansen and others like him committed to replacing public education with publically funded private schools have for their assumptions that our public schools are "failing" and that "teacher union contracts are the greatest impediment to … meaningful reform" (Op-ed article Hillsboro Times-Gazette, 2007). Do our non-union charter schools really attract and keep the best teachers?

Part I | Part II | Part III | Part IV | Appendices

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