Charter School

Usually for-profit schools operated with taxpayer money, especially funds taken from a charter student’s local public school district.

Ohio's Charter Schools: Appendices

Ohio's Charter Schools: Appendices

Barbara Brothers, PhD

(2014)

Appendix A:

July 15, 2013 ohioeanda@sbcglobal.net: Ohio charter school industry: $7.4 billion and counting. The second system of education, which feeds off the public common school system, started as a "harmless" $11 million experiment. This new system has parasitically extracted a total of $7.4 billion from the Ohio public common school system in 15 years as follows:

Deduction Fiscal Year
$     10,985,021.93 1999
$     51,658,903.14 2000
$     91,199,488.07 2001
$    127,943,077.03 2002
$    203,733,491.59 2003
$    301,139,479.91 2004
$    421,736,138.00 2005
$    481,559,416.48 2006
$    530,582,458.73 2007
$    584,929,196.33 2008
$    646,504,550.76 2009
$    679,872,827.10 2010
$    721,951,119.83 2011
$    774,404,507.49 2012
$    824,032,968.42 2013
$    900,500,252.70 2014
$ 7,352,732,897.51 Total

Between 40 and 50 percent of the $7.4 billion is local tax money passed by local voters for the support of their local school districts. … The Cost of Ohio’s School Choice Alternatives including Community schools, open enrollment, and vouchers is $5,703 per pupil; Community schools for special education is $7,223.90 to $30,126.69 per pupil; Autism Scholarship $20,000 and Jon Peterson Scholarship is $7,196 to $20,000 per pupil. The Local School District must transfer these amounts, leaving school districts with less money per pupil (William Phillis, Ohio E & A).

Appendix B:

The Tallahassee News entitled its story on the State-Wide Study on School Choice by the League of Women Voters of Florida—"It’s Time for a New Accountability in American Education." They summed up the findings: "Whatever good charter schools might do 'their biggest contribution may be to corporate bottom lines.'" The Florida League study is available online and includes several recommendations: 1. Charters should be limited to those that fill unmet needs in identified local school districts; 2. Stronger local management oversight and disclosure policies are needed; 3. Financial mismanagement issues must be addressed, as too often the privatization of schools leads to financial abuse (See http://www.lwvglc.org/documents/lwvglc_paper_for_profit_virtual_charter_schools.pdf)

Appendix C:

janresseger | August 14, 2014, reports: Being free from such court oversight to enforce the mandates of a state constitution appeals to Chad Readler, a Columbus, Ohio attorney who chairs Ohio's Constitutional Modernization Commission. Readler is also, according to Karen Kesler of StateImpact Ohio, the chairman of the Ohio Alliance of Public Charter Schools. Kesler updates earlier reports that Readler's goal is to have the Constitutional Modernization Commission remove protection for school funding from Ohio's constitution by deleting this clause: "The General Assembly shall provide and fund a thorough and efficient system of common schools throughout the state." Kesler interviews members of the Ohio Senate and the Ohio House serving on the Constitutional Modernization Commission who agree with Readler and want to remove the language that makes school funding justifiable in Ohio. They say they want the Ohio Constitution to protect school choice instead. Kesler also quotes Charlie Wilson, a professor at the College of Law at The Ohio State University, who "fears if that language is removed, there would be no right to public education in Ohio, because the U.S. Supreme court has already held that education is not a federal fundamental right and has left it to the states."

Appendix D:

Abuses and areas of concern documented in a report by Policy Matters of Ohio in 2010 include the following: A charter school chain has violated state law that limits individuals to service on two school boards and prohibits the relatives of management company owners or employees from serving on charter boards; the same schools are part of a vertically integrated system in which the same individual has served in a variety of capacities, including founder, CEO, and president, for the sponsor, two management organizations, and the schools themselves.

The heavy hand of management organizations in running schools is evidenced by numerous instances of identical boards for different schools meeting at the same time. This includes Parma-based Constellation Schools, a 16-school chain which has employees of the charters it runs sitting on school boards at company-wide, simultaneous board meetings presided over by Constellation’s president. Five of six board members of a Lorain school operated by Mosaica Education are Colorado residents, and three of them are board members of a Mosaica-run school in Colorado Springs.

Management organizations control the vast majority of school revenues, which often flow straight into company accounts; some exercise this control indirectly by hiring and firing staff employed and paid by schools. Charters run by the Leona Group lease staff from an Ohio-based company set up by Leona’s founder and CEO.

Many contracts include poison pills that require schools to make termination payments to management organizations if they decide to break or not renew management agreements. These provisions make it nearly impossible for charter boards to break from companies they ostensibly hire.

One-size-fits-all agreements signed by schools run by individual management organizations show that schools have little or no power to negotiate contracts fitting their needs and that managers are calling the shots in Ohio.

We have based our review on six criteria laid out by charter advocate Greg Richmond, CEO and president of the National Association of Charter School Authorizers, in a July 2010 Education Week commentary. These standards outline the importance of board independence and the need for clear contracts that leave boards, not management organizations, in control. Charter school sponsors, as authorizers are called in Ohio, should not approve charter proposals that do not meet these criteria, Richmond asserted in his commentary.

Appendix E:

More than a "half dozen charter school accountability and transparency bills pending in legislative committees are not being heard. In September 2013, Senator Schiavoni introduced legislation in order to create uniform standards with the traditional public common school system." Components include:

Accountability

  • Require the state Auditor to do an annual audit of each charter school
  • Require charter schools to follow public records laws the same as traditional public schools
  • Prohibit charter schools from using taxpayer dollars for advertising, recruiting, or promotional materials

 

Transparency

  • Ensure that charter school teachers are evaluated by the same methods as traditional public school teachers and that they are licensed the same and are paid equivalently
  • Require that upon a student’s transfer from one school to another, the report cards of both schools are given to the parents of that student

 

Uniform Standards

  • Require that schools follow the same course of study requirements and disciplinary standards and that school board members abide by the same standards

 

Appendix F:

In May 2014, the Center for Popular Democracy and Integrity in Education released a report, Charter School Vulnerabilities to Waste, Fraud, and Abuse. The title was borrowed from the title of a section of a report that appeared in the Department of Education's Office of the Inspector General's Semiannual Report to Congress, No. 60. The most common type of fraud identified was embezzlement. A new advocacy group, Integrity in Education, has filed Freedom of Information Act requests to expose connections between the U.S. Department of Education officials and for-profit education companies. Everything from embezzlement to data scrubbing is included in their list of problems. This is a list from the report of Ohio charters and their particular problems:

  • Appendix A: Charter Operators Using Charter Funds for Personal Gain: "An Ohio state audit found that administrators at the Greater Achievement Community Charter School egregiously mismanaged public funds, sometimes using money for personal expenses." Cleveland metro reported the audit findings in 2012: at least $570,000 misspent. Greater Heights Academy Charter School officials defrauded "more than $400,000." Imani Institute Leadership Charter School officials defrauded Ohio taxpayers of over $800,000. The investigation was begun in 2003 and ended in conviction in 2011. In March of 2013, Cincinnati College Preparatory Academy Charter School officials were found guilty of multiple criminal charges including stealing at least $148,000 of taxpayer money. Officials of another Cincinnati Charter, W.E.B. DuBois, were found guilty of "record-tampering [inflating enrollment] and theft of over $700,000 in public money." Theodore Roosevelt Public Community Charter School official dismissed for spending for personal use. (See www.charterschoolsscandals.blogspot.com)
  • Appendix B: School Revenue Used to Illegally Support Charter Operator Businesses: Lorain Arts Academy Charter School and Main Street Automotive Magnet School were both cited, and Lorain left $75,000 in unpaid bills when closed.
  • Appendix C: Mismanagement that Puts Children in Potential Danger: The Talented Tenth Leadership Academy for Boys Charter School and The Talented Tenth Leadership Academy for Girls Charter School in Columbus were closed in 2013 for health and safety reasons.
  • Appendix D: Charters Receiving Public Dollars for Services not Provided: Cleveland Academy of Scholarship Technology & Leadership Enterprise Charter School individuals and businesses were part of laundering or stealing $2 million of taxpayer money (April 2013).
  • Appendix E: Charter Executives Illegally Inflating Enrollment to Boost Revenues. In 2012, International Preparatory Schools Charter Schools were ordered to pay back $1.4 million that they charged the state for students who never enrolled.
  • Appendix F: Charter Operators Mismanaging Their Schools: Legacy Academy for Leaders and the Arts Charter School, George Washington Carver Preparatory Academy, NuBethel Center of Excellence, and New City Community School swindled $470,000 before they were closed. Carl Shye, who served as treasurer for as many as 10 charter schools in Ohio, embezzled over $1 million. Eagle Heights Academy Charter School in Youngstown was closed due to financial mismanagement and was immediately reopened under a different name.

Appendix G:

The Los Angeles United School District voted to close the network of eight Gulen charter schools authorized by that District because of charter school funds being used for such things as immigration costs and loans to the management company, some of which were not repaid. Why would the District Court order them kept open?

Appendix H:

That failed charters continue to operate is out of control as evidenced by several more recent examples. In a July 25 Columbus Dispatch article, FCI charter school is identified as a charter school in financial trouble. FCI charter school is on the campus of Living Faith Apostolic Church in Columbus. The Church's leader, his wife, and one other person founded it. The Church leader's wife is president of the school's board. … 3314.03(A)(11)(c) of the Ohio Revised Code states: "The school will be nonsectarian in its programs, admission policies, employment practices, and all other operations, and will not be operated by a sectarian school or religious institution." Why was the school allowed to operate in the first place and then able to reopen? Isn’t there a need for a full-scale investigation?

VLT Academy is another example of the abuse that results from a lack of oversight of charters: Bill Phillis reports in OE&A in June of 1914 that "the superintendent of the VLT Academy, a charter school of 600 some students, was making $140,000 per year; her daughter was making $92,000 per year for data entry; and her husband was making $62,000 in addition to running his company that performs the charter's janitorial services, under a highest bid contract, for $323,000 per year. The family was receiving nearly $1,000 per student for central office duties and cleaning. …This charter school, in six years of operation, has been rated academic emergency, two years; academic watch, three years; and continuous improvement, one year." The operators are searching for new sponsors and the sponsors for new EMO.

Appendix I:

7/28 The "Public Charter Schools Act" would expand on ALEC's pre-existing "Next Generation Charter Schools Act" and enrich ALEC members like K12, Inc., the nation's largest provider of online charter schools or cyber schools. It would allow privately-operated charter schools to continue taking public funds but without public accountability. The bill would give charter schools carte blanche to operate without being "subject to the state's education statutes or any state or local rule, regulation, policy, or procedure relating to non-charter public schools within an applicable local school district..." The related "Public Charter Schools Funding Act" restates charters' autonomy from the rule of law and democratically-elected school boards while still giving each charter school "one hundred percent" of the state and federal education funding "calculated pursuant to the state's funding formula for school districts."

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

Ohio's Charter Schools: Part IV - State Board of Education Advocacy

Ohio's Charter Schools: Part IV
State Board of Education Advocacy

Barbara Brothers, PhD

(2014)

The role of the State Board of Education, as defined in the Ohio Constitution, is to provide leadership, standards development, monitoring, and advocacy for the public common school system.

A major contributor to Ohio's problem is that the State Board of Education is no longer an entirely elected body and does not see its mission as defined under the 1953 Constitutional provision and its enabling legislation as an independent state-level governing body: At present it would seem that a majority are charter school advocates, ideology and politics trumping Constitutional responsibilities.

Doug Livingston and several journalism interns with The News Outlet, a consortium formed by the University of Akron and Youngstown State University, recently interviewed the members of the State Board of Education (November 2013 in the Akron Beacon Journal). Some members' statements reflect a pro-education choice bias and an antagonism toward the public common school system. Criticisms of the public education system include "overregulation," need for "educational opportunities [which] means publicly funded vouchers to attend private schools," a need to stick with the basics of reading, writing, and arithmetic, and lack of "choice" and "competition." So instead of choosing to reduce regulations for public schools that are "overregulated," they instead work to create a new system that has no regulation.

While some members of the State Board of Education are "vociferously advancing the state administration's pro-charter school and voucher agenda," others recognize the responsibility of the board to address its mission: One current state board member reflected that "First and foremost, we do not yet have a state funding formula that is reflective of the total responsibility of the state to educate its children and we have way too much of a financial burden on local property owners and it creates a significant imbalance of haves and have-nots, and the type of education that kids get, in many ways and many times, is reflective of their zip code."

Questions of ethics and conflicts of interest continue to plague the Board. The first Superintendent of Education that John Kasich appointed, Stan Hefner, had to resign because of ethics violations. Most recently, Bryan Williams resigned from the Board. Governor Kasich had appointed Williams to a vacant elected seat on the state school board in 2011. According to his resignation letter, ethics rules apply only to elected board members. Because Williams was an appointed official, state law allowed him to file exemptions that permitted him to simultaneously serve in a public position while still advocating for the Associated Builders and Contractors of Ohio, a consortium of private construction companies. When Williams won election in 2012, the exemption no longer applied, as he resumed office as an elected member. Just like Charters, there are two sets of rules—one private and exempt from the laws and one elected or public that does have to obey the laws (December 9, 2013 in the The News Outlet).

While sitting in a position to influence state regulation on the school board, Williams lobbied the legislature, numerous state agencies. and the governor's office on issues that affect school funding and school regulation to the benefit of his non-union contractors group, including a program that would have allowed companies to receive high school students and state money for privately run apprenticeship programs. As with the State Superintendent of Education, there is no expectation that criminal charges will be pursued just as in the case with data scrubbers: If you are a public school employee, expect to be charged under the law; if not, just resign and keep your money.

Other officials overseeing the money that is to flow to K-12 public education reflect their biases, if not their pocketbooks, when making decisions. According to a report in the May 13 Gongwer, 21 charter schools that received low scores on an independent review of applications for Straight A Funding will get the benefit of another review by the Ohio Department of Education. Straight A Funding Governing Board member Representative Andy Brenner (who recently made news by advocating privatization of the public school system) wondered if the reviewers were biased against charter schools.

Jan Resseger, who writes a blog all Ohioans interested in education should read, finds it incredible that "despite all their evidence that such school choice has brought neither access, nor opportunity, nor coordinated services, nor quality oversight," many still argue that "traditional public schools are something that society needs to get away from and parents must have the right to escape." She wonders, "Why refuse even to consider that traditional public education—with the advantages of a coherent and coordinated system of services and a long and growing history of oversight to protect school quality, financial stewardship, equal access, and equal opportunity—may be the best kind of school governance to serve the needs and protect the rights of the greatest number of children" (July 30, 2014).

The most significant change that has resulted from the introduction of so-called school choice is a culture shift to accepting graft and corruption in education as well as in politics. We might say that the value of education has been replaced by the value of money. No Improvements! No transparency! Professionalism replaced with rhetoric and promises and profits! "So long as the charter industry buys favoritism from state legislatures, as long as amateurs win public dollars to run inferior schools, as long as virtual charter schools get rich while supplying poor results, there will continue to be critics—and should be."

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

Ohio's Charter Schools: Part III - Fraud and Legalized Corruption

Ohio's Charter Schools: Part III
Fraud and Legalized Corruption

Barbara Brothers, PhD

(2014)

Recently, the Detroit Free Press published an extensive investigative series of articles on the one-billon-dollar charter school operations in that state—"How Michigan Spends $1 Billion but Fails to Hold Schools Accountable." As in Ohio, most of Michigan's charters are for-profit, and as is true for Ohio, Michigan legislators fail to hold the charters accountable for financial practices and academic outcomes. The year-long investigation found "wasteful spending, conflicts of interest, poor performing schools," and not even the "worst of the worst" were closed. In May of 2014, the Center for Popular Democracy and Integrity in Education published a report on problems in for-profit education companies. The list includes everything from documented embezzlement to data scrubbing (for Ohio charters included in the list, see Appendix F).

As is true of legislators in Ohio and Michigan, so it is of Florida legislators, as the Florida League of Women Voters documents in their study of charter schools. The League of Women Voters of Greater Las Cruces, NM, points out in their study of Virtual Charter Schools, one significant part of the charter school industry, that the "learning companies have problematic political and business relationships" and that "Adequate Yearly Progress (AYP) measures, state performance rankings and graduation rates of full-time virtual schools lag significantly behind traditional public schools."

What is the State of Ohio's response to reports of corruption in charter schools? Why are they reluctant to hold them accountable for their performance and spending of taxpayer dollars? In June, the FBI raided 19 Concept School locations in Illinois, Indiana, and Ohio, including the group's Des Plaines headquarters. Search warrants showed they were seeking records concerning Concept's use of the federal E-rate program and companies hired under that program, which helps pay for high-tech upgrades. Contractors facing scrutiny in an ongoing federal investigation of Concept Schools have been paid nearly $1 million over the past 3 years for work at 3 Chicago Public Schools-funded campuses run by the Des Plaines-based charter operator. According to the Chicago Sun-Times, the agents also were looking for records regarding top Concept officials.

These schools operated by Concept schools are associated with the Turkish cleric named Fethullah Gulen, who lives in exile in Pennsylvania and is the honorary chairman of the Niagara Foundation. Concept Schools, managed from the Des Plaines office, operates 19 schools under the names of Horizon Academy and Noble Academy in Ohio. The schools are staffed in part by employing Turkish citizens holding H-1B visas. The Vindicator, a Youngstown newspaper, reported that as "early as 2002, state audits found thousands of public dollars 'illegally expended' to finance the U.S. citizenship process of Turkish employees...Help with legal and immigration fees also extended to their children and families, including the spouses of the directors."

Recently in The Columbus Dispatch, an article by Denis Smith, former overseer of charter schools for the Ohio State Department of Education, notes that at a "State Board of Education meeting this week, four former charter-school teachers testified on alleged unlawful conduct at Horizon Science Academy Dayton High School, including what The Dispatch described as "test cheating, attendance tampering, sexual misconduct and other misdeeds..." The State Board of Education announced that it was investigating the teachers who might lose their licenses, and only under pressure did they decide to investigate the Dayton school even though the FBI probe had received major news coverage. (See Appendix G for Gulen school problems in California.)

There is "no ban on using public funds earmarked for charter schools for political campaign donations." What results is legalized corruption. For example, we learn that the Niagara Foundation, a Gulen operation, "has receptions for legislators [such as the recent one in Ohio] and arranges trips to Turkey for legislators." Cliff Rosenberger, who is expected to become speaker of the Ohio House in January, is the recipient of a trip to Turkey. In the case of the Gulen Schools, the political favors can be done under the name of the Niagara Foundation, a non-profit corporation, which illustrates the importance of the public and its officials being able to clearly and easily identify a school, such as Horizon Science Academy or Summit Academy, with its Education Management Organization and then with its sponsor.

Taxpayers' losses to the unregulated charter school Industry in Ohio are in the millions of dollars. These unregulated businesses and their corporate owners who have passed themselves off as educators owe more than $31 million to that state for charters that have closed and been referred to Attorney General Mike DeWine's office for tax collection. Of that, $30.5 million remain uncollected as reported last February on NBC 4 Columbus by investigative reporter Duane Pohlman. As William Phillis points out, "That's $30.5 million in taxpayer dollars that have remained uncollected by the state's Attorney General. For scale, that is more than the state ends up sending to 128 of Ohio's 612 school districts."

In June of this year, The Columbus Dispatch reported that in William Lager's race for Ohio House Speaker, Lager and David Brennan, founder of White Hat Management, gave one of the candidates a combined amount of $36,500. Political contributions have been integral to the success of charter operators. In 2011, The Columbus Dispatch reported that Brennan was behind extensive charter-school changes to accountability, which drew heavy fire even from several charter-school advocates alarmed at the removal of accountability measures. Batchelder identified Brennan as the prime source for the changes. Brennan's campaign contributions were listed as $217,000 to House Republicans and $177,000 to Senate Republicans for the most recent two-year election cycle.

This year's midterm budget bill contained further cash for Brennan (HB483) through the provision that allows dropout-recovery schools that are privately run but publicly funded to collect $5,000 per student until age 30. Brennan received the lucrative contract in spite of the extraordinary poor performance of his schools. Six years ago, the Scripps Howard News Service reported that "taxpayers pay millions of dollars every month to educate tens of thousands of students who rarely or never attend class in privately-operated charter high schools. ...For-profit companies operate schools in 30 states and in Washington, D.C. Hargrove cites Ohio as being hardest hit by the ghost school trend, paying $29.9 million a year for absent students who were enrolled at 47 dropout-recovery schools. The nation's single worst truancy rate—according to government records—was at a Cincinnati campus, where 64 percent of enrolled students were not in class." A former principal of Life Skills Center, a White Hat Management school, said that he spent less than $1 million and took in $3 million. A Salem, MA, for-profit company owner is quoted in the report as saying, "Ohio is the profit-making EMO capital of America." More recently, the Akron Beacon Journal has reported on the failure of the "dropout recovery" charter schools. Hargrove was astonished that no one had gone to jail, as Phillis reports. Instead, House Republicans rewarded Brennan's lack of success with a place in the budget, a line item that was initially opposed by the House and Senate that would have given the funding to community colleges and vocational programs to provide job training.

When we look at Virtual Charters in Ohio, the same pattern emerges as for bricks-and-mortar for-profit schools—No accountability. Failing performance. Huge profits. Large contributions to their supporters in the Ohio legislature. William Lager operates ECOT, a Virtual School. In May 2014, The Columbus Dispatch reported that Lager contributed $266,121 to House and Senate Republicans during the first 16 months of this election cycle. In 2013, Lager contributed $208,378.06 to political campaigns. That computes to about $15 per pupil for the 13,836 clients enrolled in this business operation. Check the Secretary of State's website to review the campaign contributions of Lager, ECOT CEO, CEO of Altair Learning Management, and CEO of IQ Innovations. Documented is the fact that Lager made political contributions totaling over $700,000 from 2010 through the first half of 2013 to Ohio lawmakers.

Like Brennan, Lager recently received a bonus of nearly $3 million from State of Ohio taxpayer money—the Straight A Fund that was "to put more dollars in the classroom" to try "new approaches" that would be "cost-effective." It is hard to imagine that any application from Lager would not be rejected with the following recommendation: To be cost effective, cut overhead, and pay yourself less!

In August of 2013, three new e-schools were approved. Mosaica Online Academy, Provost Academy, and Insight School bring the number of e-schools to 26. The state ban was lifted with no real standards approved as ordered by the moratorium in 2005. The standards developed by the governor and state school superintendent were not adopted by the legislature. Instead, they used those written by the industry: No "attendance-keeping or budgeting," no requirement for "functioning hardware and software before they [students] could be considered enrolled (The Columbus Dispatch, August 19, 2013).

Ohio Virtual Academy (owner/management K12, Inc.) received $85,061,142.53 in FY 2013-14 alone. Electronic Classroom of Tomorrow (ECOT) took $96,088,432.91 from public school districts. Since their introduction, the total of Ohio taxpayer dollars paid to these two e-schools is $1,115,626,932.94. The management company of K12, Inc. is a for-profit company founded in 1999 by convicted junk-bond king Michael Milliken and Ronald Packard, a hedge fund banker who makes a multimillion-dollar salary. According to the Center for Media and Democracy's PR Watch, "CEO Ronald Packard was named in a 2012 class action suit citing his alleged false statements regarding student performance and K12, Inc.'s "aggressive tactics" to recruit and enroll students in [an] effort to cover up the 40-60 percent turnover rate (the parties reached a tentative $6.75 million settlement agreement in March 2013)." In spring of 2014, it was announced that the NCAA schools would no longer accept credits from Virtual Academies. The State Board of Education took no action or made no announcement. Is this information readily available to parents exercising the right to choose?

Failed charters that were questionable in the first place continue to be reauthorized. Charter schools remain officially closed only when the sponsor is not willing to continue and when no new sponsor was found. One such example occurred this summer when VLT Academy in Cincinnati was unable to secure a new sponsor. For more specific examples of charter abuse and fraud in Ohio, see Appendix H.

Charters were originally billed as necessary to producing a better product—educated children—through competition and choice. Technology would replace teachers. But the track record of virtual schools proves the opposite: "Our findings are clear," said Miron, an NEPC [National Education Policy Center] fellow, "Children who enroll in a K12 Inc. cyberschool, who receive full-time instruction in front of a computer instead of in a classroom with a live teacher and other students, are more likely to fall behind in reading and math." Their report analyzed federal and state data sets for Arizona, Arkansas, Idaho, Ohio, and Pennsylvania as well as reports of such pro-charter funded groups as CREDO of Stanford University. Their analysis of revenue, expenditures, and student performance showed that students were more likely to drop out and were much less likely to meet federal education standards. They criticized K12's poor academic results and high administration costs.

Investigative journalists have been warning the public about the influence of money on our legislatures from the for-profit charter school Education Management Organization corporations. That influence is felt throughout the country as ALEC writes Public School Acts (see Appendix H). Nor is it just state legislatures that have responded to the lobbying of the charter industry. Our Federal Government gives huge tax breaks to companies building charter schools. The program began in 1995 when the Charter Schools Program provided $4.5 million to fund nine applicants to build charter schools. The Community Renewal Tax Relief Act of 2000 included the New Markets Tax Credit that supports investors in charter-school construction to collect a return of 9 percent over 7 years. In addition, there is EB-5, a federal program that enables foreign investors (China, Nigeria, Russia, Australia, Turkey) to get immigration visas by investing $500,000 or more to build charter schools.

For these schools of choice, we lack information about who really operates them. For example, you now know who operates Horizon Science Academy in Youngstown, but you must be more than computer literate to get that information. The sponsor and the management company are not clearly identified even to school treasurers who make the payments to the community school. Shopping or choosing a school for your child is like hearing slogans to buy Wheaties, the Breakfast of Champions, and having to conduct a computer search to find out who produces the cereal and what's in it. In addition, there are no packaging regulations nor advertising oversight to verify charter claims.

Choice is not choice without credible information; otherwise, the parent is playing a game of Blind Man's Bluff who can respond only to the siren songs of market advertisements. Parents lack reliable performance data to make an informed choice just as taxpayers lack information on what the charter experiment is costing them. What data there is can be found only by someone who can access the information from the State Board of Education's website, and even then that information is incomplete. In June 2014, Horizon Science Academy Cleveland High posted this announcement on its website: "This year HSA is proud to report that we had a 100% graduation rate, with all 83 seniors completing the necessary requirements." The school didn't mention that 84 Class of 2014 students disappeared along the way. As usual with statistical claims like this, one needs to ask 100 percent of what. With no oversight and no regulation, the for-profit schools can make whatever unsubstantiated claims their advertisements put forth. A great deal of effort has to go into challenging the exaggerated claims.

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

Ohio's Charter Schools: Part II - Are Charter Schools Accountable?

Ohio's Charter Schools: Part II
Are Charter Schools Accountable?

Barbara Brothers, PhD

(2014)

Charter schools are exempt from more than 150 provisions of state law that otherwise are applicable to school districts, including a requirement to annually report the names, salaries, and credentials of licensed employees to the State Board. Of the Education Laws and Community Schools Members Only Brief produced by the Ohio Legislative Service Commission (http://www.lsc.state.oh.us/membersonly/129educationlaws.pdf), pages 2-11 of the 20 pages list the State policy requirements from which charter schools are exempt, leaving only 9 for those to which they must adhere.

Examples of exemptions include the following:

  • Teacher qualifications and evaluations: State Board of Education minimum standards that require teachers to be assigned to teach in the area or grade level in which they are licensed, e.g., "highly qualified" requirement, ORC 3314.04; OTES teacher evaluation system (currently applies only to charter schools in the Race to the Top program), ORC 3319.11; Substitute teacher employment requirements, ORC 3319.10
  • Curriculum, student protections, and reports: Requirement that school principals report certain offenses committed by students, ORC 3319.45; School course of study requirement, ORC 3313.60; Penalties and consequences for failure to submit reports to the State Board, ORC 3319.35 and 3319.37; Requirements on statistical reporting to the State Board, ORC 3319.33; Requirements to annually report licensed employees to the State Board, ORC 3317.061; Requirements on retention of school records and establishing a records commission, ORC 149.351 and 149.41
  • Financial requirements: Regarding temporary deficits in school district special funds, ORC 3315.20; Requirements related to the payment of employee salaries and the administration of payroll accounts, ORC 3315.08; Check writing and deposit requirements related to school treasurers, ORC 3313.51; Requirement to attach certificate of available resources to school district appropriation measures, contracts, and purchase orders, ORC 5705.412; Requirements related to shared savings contracts for energy savings measures for school facilities, ORC 3313.373
  • Ethical standards and transparency laws: Ohio’s Sunshine laws and ethics laws that can lead to dismissal or criminal charges against officials who violate them do not apply to those running the Educational Management Operations (EMO) of charter schools. The State laws are written to consider the EMO personnel and their operations as private for the purpose of operations but public for the taxpayer money they receive. For example, they can award contracts to relatives, and there is no prohibition against appointment of their board members as charter school employees or consultants. ORC 3313.70

Most recently in articles for The Columbus Dispatch and for Diane Ravitch's blog, Denis Smith, a retired school administrator who worked both as a sponsor representative for charter schools as well as a consultant in the Ohio charter school office, points out the fatal flaw in Ohio’s charters: Governance, or rather the lack thereof. "Charter-school board members aren't elected by or responsible to the voters. Some are hand-picked by for-profit management companies running the schools." Charter school board members can be replaced by the EMOS if they raise questions or interfere with the running of the business.

"Charter-school board members do not have to be qualified voters (citizens) who are registered with the secretary of state’s office in recognition of their status as members of a public board." How ironic that in an age that wants to enclose US borders with fences and guards, we permit foreign nationals to run schools to educate our children. "With hand-picked, unelected boards, charter-school administrators can pay themselves exorbitant salaries." The citizens of Ohio have no basis in Ohio law for objecting to those salaries or any other self-serving practices boards engage in. Administrators are paid exorbitantly; on the other hand, teachers, who we say are the ones solely responsible for the educational achievement of our children, are paid poorly.

When charter schools fail, shouldn't they be closed and turned over to local public schools and elected boards? The Department of Education's ranking of Ohio schools and districts reveals that 83 out of the bottom 84 schools are charter schools. The same performance records that lead to urban schools being closed and public school teachers being dismissed are excused for charters. In fact, the head of the Ohio Alliance for Public Charter Schools cautions against using the same ODE standards to close charter schools because of "extenuating circumstances." Why aren’t the public schools and their teachers excused because of "extenuating circumstances"? What are the "extenuating circumstances"? Wasn’t the excuse for giving public dollars to private charter entrepreneurs that they could do the job the public schools and their teachers were not doing?

Ohio officials have not enforced the rules and laws for closing failing charter schools. A name change seems to be all that is required. The Akron Beacon Journal reported in August of 2013 that Romig Road Community School in West Akron, a huge, publicly funded charter, would have "to close at the end of the coming school year, 2012-13." Poor academic performance and failure to show improvement were the reasons. However, the same letter that announced the school closing to parents said that the school would now operate under the name of Imagine Leadership Academy. What happened on Romig Road isn’t all that new. Analysis of Ohio Department of Education records for years prior to 2013 by Doug Livingston shows that seven charter schools operated by for-profit management companies were closed for academic performance and were reopened under that same company, with only one exception.

Failed charter schools are allowed "to reopen with essentially the same facilities, personnel, students" (September 1 The Columbus Dispatch) is a story told over and over. Livingston points out two more examples of failing charter schools in the Canton area, both of which were also ordered closed by the state. Yet White Hat Management, the company operating the schools, maneuvered to keep each essentially in operation, the names of the schools changing but little else, one school holding onto 70 percent of the staff, the school boards apparently remaining the same. The same thing happened a few years ago in Youngstown when Eagle Heights Academy became Summit Academy.

Policy Matters Ohio published a report as early as May of 2010, Public Good vs. Private Profit: Imagine Schools, Inc., on Ohio’s failure to enforce its wholly inadequate charter laws. In 2010, Imagine Schools, Inc. was "no longer allowed, by law, to open new schools here." At that time, its "six Ohio schools that had been open long enough to be rated by the state were either in Academic Emergency or Academic Watch." Instead of closing these schools or enforcing the law, the state has granted them permission to open an additional 6 more, increasing to 17 the number of schools operated in Ohio. The Romig Road School that was ordered closed in 2013 and then reopened under another name was an Imagine School. One might quip, "Imagine That!" The Cleveland-based think tank has again recommended strengthening the mechanism for oversight. Management companies should be accountable for the performance of their charter schools (see Appendix D).

Recommendations for enforcement and a moratorium on additional charters are ignored. Instead, the state has decided to revamp the way schools are evaluated and to hold failing charter schools exempt from closure until 2017. Instead of responding to criticism and calls for accountability, the state has decided to allow the charter train to run full steam ahead. In his mid-year legislative update, Senator Schiavoni, minority whip of the Democratic party, has once again focused on the need for charter school reform legislation. The bill he jointly introduced into the Senate in September of 2013 has languished without even a hearing in spite of repeated attempts to call attention to the need for such legislation (see Appendix E).

Accountability applies only to public education, and as soon as charter schools are asked for even the most basic of information--such as how they spend their taxpayer money or who oversees them--they claim they are private. Earlier this year, The News Outlet (http://thenewsoutlet.org) asked nearly 300 Ohio charter schools for such information as: Who are your board members? Nearly 100 refused to respond with any information (Akron Beacon Journal, 2013).

Even more disturbing is the fact that Chad Readler, member of Ohio’s Constitution Modernization Commission and a lawyer who serves as chair of the Board of Directors of the Ohio Alliance of Public Charter Schools, wants to remove the phrase "thorough and efficient" from Article VI of the Constitution (see Appendix C). In August, Readler, on behalf of the Ohio Alliance for Quality Education, another charter school advocacy group, filed a Merit Brief of Amicus Curiae in support of Appellees White Hat Management. The brief for the Alliance supports White Hat's claims that "public funds sent to the company are private." White Hat asserts ownership of all of the assets of the charter schools. White Hat further asserts that neither the charter school board nor the public is entitled to any financial information from the company. Readler presented some arguments: Fees paid to management companies (as high as 96%) do not constitute public money; Property purchased by and used by management companies is owned by the private company; Ohio's schoolchildren will be the "victims" if the Court rules that White Hat and other companies are local and considered to be "public."

Why is it that Ohio’s legislators and charter advocates claim that the public has no grounds to ask for accountability and transparency in the spending of their tax dollars? As one commentator put it, "The for-profit management companies that operate many charter schools think that their mission and vision (read: profit) supersede the legitimate interests and aspirations of the public and their tax monies."

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

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

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