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Monday, February 19, 2018

ECOT Bills State for Students ... AFTER IT CLOSES

The Electronic Classroom of Tomorrow told the Ohio Department of Education on Jan. 23 that it still had 5,580 students, and the state should pay them for educating those students. Trouble was, the school closed Jan. 19 -- four days before that payment was sent to the department.

That's right. It appears ECOT wanted to be paid for students it said it was educating after the school had closed.

To the Department's credit, they issued no taxpayer money to the state's once largest virtual school based on their Jan. 23 request. But the fact that ECOT, even after the end had come, demanded taxpayer money for educating kids everyone knew weren't there because the school had closed, put a rather tight, ironic bow on this school's sordid history.

Remember, it was the fact they couldn't prove they educated $80 million worth of students over the last two years, which then the state demanded they repay, that led to the school's abrupt closing last month.

But that closure didn't stop ECOT from continuing to demand taxpayers give them money. According to department reports, ECOT's February monthly payment to charter schools is based on data received by the state Jan. 23 -- four days after the school officially shut down. 

Fortunately for taxpayers, the school only billed the state for 5,580 students -- not the 11,876 students the school claimed it had enrolled on Dec. 24, 2017 -- the last date ODE looked at prior to the school's closure.

So that meant that the school, if it only had 5,580 students, had been overpaid by about $11 million because the state had paid the school for educating about twice as many students for the first half of the school year. So the school only needed $41.3 million to educate those students all year. However, the state had already paid the school $52 million through January based on the larger enrollment.

And that doesn't include the $30 million payment the school was supposed to cough up in return for charging taxpayers $60 million for students the school couldn't prove it actually educated in the 2015-2016 school year (another $20 million in overpayments was discovered later by ODE for last school year).

So while the state did its job and didn't pay ECOT for kids it claimed it educated while it was closed, the fact that ECOT actually charged taxpayers for this is incredible.

What a scandal. 

Monday, February 12, 2018

ECOT argues in Supreme Court tomorrow that it should be paid for educating kids it can't prove it educated. Really.

Tomorrow, ECOT will argue before the Ohio Supreme Court that even though it can't demonstrate that more than 60 percent of the students it charged taxpayers for educating actually engaged in educational activity, it should still receive taxpayer money because they could have been educated by them

The state forcing the school to re-pay taxpayers $80 million for kids it can't prove ever engaged in any learning experiences at ECOT is eventually what led to the Educational Service Center of Lake Erie West to drop the mega-virtual school last month, forcing the school to close and leaving hundreds of staff and thousands of families in a lurch -- a lurch caused by ECOT founder Bill Lager's love of money and fancy houses (owned under the name NestEgg Development, LLC. I can't make this up)


And while it appears that finances will be what shuts down the state's first and largest online school (though in a welcome departure from pure finances, apparently the Insight School of Ohio, run by K-12, Inc., which also runs the Ohio Virtual Academy -- currently the state's largest online school -- will be shut down for failing kids rather than accountants), ECOT's academic performance for the kids it actually did educate was not much better than those it didn't.

According to state data from the 2016-2017 school year, every penny sent from a school district to ECOT last year (which was more than $100 million) came from a district that outperformed the online giant by at least 4 of 13 state report card categories. And an astonishing 1 out of every 4 dollars sent to ECOT came from a district that outperformed ECOT on every comparable measure.
This is not to say there weren't success stories at ECOT. There were. But in the vast, overwhelming majority of cases, ECOT simply did not provide a better academic option for students than the districts they left.

And while they did graduate large numbers of students, they failed to graduate about twice as many as they actually graduated. Some of ECOT's paid supporters like posting impressive photos of their Schottenstein Center graduations. They never post a filled Fenway Park, which holds about the number of students ECOT failed to graduate since its opening.

One telling metric of the school's long-term impact on kids is how many ECOT graduates have a college degree within six years of graduation. 

When coupled with the fact that ECOT was charging taxpayers tens of millions of dollars to educate kids that never participated in learning at the school, it's clear that this school was not living up to expectations academically or financially.

As I wrote before, ECOT has generally not performed well on state metrics and have been unable to account for the children's learning experiences, but they have until recently been protected by powerful friends in the Ohio General Assembly and state government who benefited from ECOT founder Bill Lager's political largess.

And now the Supreme Court will decide, essentially, whether the school should be paid for educating kids it can't prove it educated and therefore remain open forever. 

Monday, January 22, 2018

ECOT's political patrons are many and vast

Now that the Electronic Classroom of Tomorrow (ECOT) is closed, it pays to step back and understand why a school that the Ohio Department of Education didn't approve in 1999 because it didn't think ECOT could effectively account for its students was shut down 18 years later because ... it couldn't effectively account for its students.

A major reason that this 18 year, more than $1 billion in state taxpayer funded operation was allowed to continue, despite repeated signs they weren't keeping track of their students. (One of those signs included an audit by then-Auditor Betty Montgomery that showed ECOT had overbilled taxpayers every year between 2001 and 2005.)

A big reason was ECOT founder William Lager's political contributions, primarily to powerful Republican lawmakers. According to www.followthemoney.org (which tracks state and local campaign contributions from the early 1990s to present), Lager himself gave more than $1.2 million to primarily legislative candidates since 2000, less than 5 percent of which went to Democrats.

Included in those contributions are current Attorney General Mike DeWine and Secretary of State Jon Husted. They are now running for Governor and Lieutenant Governor. 

Another recipient has been current Auditor Dave Yost, who is running for Attorney General. Another is Keith Faber, who is running for Auditor.

The list includes Speakers of the House, Presidents of the Senate and chairmen and chairwomen of powerful legislative committees.

And while the school is now shut down, what is clear is that the reason it remained open as long as it was was because the school had powerful allies and protectors in state government. In fact, Lager often complimented the recipients of his largess at ECOT graduations (where many of the largest recipients spoke) and thanked them for stopping efforts to close or "harm" the school. 

Here is a list of the recipients who received more than $10,000 from Lager:




Wednesday, January 17, 2018

ECOT in receivership? ECOT paid more to for-profit companies owned by political donor than its teachers

So now the Electronic Classroom of Tomorrow's sponsor, the Educational Service Center of Lake Erie West, wants to put ECOT in receivership to ensure the business can be properly wound down.

I'm fascinated by this "ECOT has no money" claim. Because by all counts, they should have plenty. Why do I say this? Because, as I have written before, even after ECOT loses its monthly, $2.5 million repayment (because it billed taxpayers for $60 million more than it should have in the 2015-2016 school year), the state pays ECOT $4,831.30 per pupil. That’s more than the state pays to educate kids in 265 of Ohio’s 613 school districts.

Yet ECOT is a virtual school. So no buses, janitors, lunch ladies, etc. So the school could pay the 597 teachers it had in the 2016-2017 school year their average $37,527 salary, provide brand-new MacBook Pros from Apple at $1,299 each and still clear about $20 million, or 34 percent.

However, it still has to pay its for-profit companies that run the school and provide the software for the school's operations. These companies are run by William Lager -- the big-time political donor.

How much is that? Well, in the four most recent state audits, Lager's companies end up receiving about $20.9 million a year.

Ah ha. So that is the problem! See, Lager needs to have his cut. And if Lager can't get his cut, well, forget the kids and parents, the school must close.

Here's the amazing thing. Between 2012-2013 and 2015-2016 (the school's most recent audited school year), Lager's for-profit companies received $83.6 million in public funds. Meanwhile, ECOT only paid $82.9 million for its teachers during the same period.

This is the problem with for-profit companies running schools. The schools end up paying more to the companies than the teachers.

Perhaps if Lager had settled for less of a cut or profit, ECOT parents wouldn't be scrambling today? Of course, that would have meant fewer potential donations to Ohio politicians. And we can't have that now, can we?

Ohio Stays Mired in the Middle of National Rankings after Ranking 5th Best in 2010

Some out there think this doesn't mean much because of changes in the way Education Week has rated state school systems, but once again, Ohio ranks 22nd nationally for education excellence among the 50 states in EdWeek's annual Quality Counts report, down from 5th in 2010.

I tend to think that dropping from 5th to 22nd is kind of a bad thing. But my friends at Fordham are defending the drop, even suggesting it's not even a drop at all. Why? Because EdWeek changed the way it calculated quality between 2010 and 2018. To suggest the drop is an issue is "intellectually dishonest," they claim.

So, for example, the de-emphasizing of standards and the fact other states caught up to us on those measures means that really we were probably 22nd back in 2010, just as we are today. At least, that's their argument.

Beyond the rank speculation that entails, it completely ignores one incredibly important fact: In 2009, Ohio had adopted the Evidence Based Model of school funding, which promised an additional $3.1 billion in state funding over the next 10 years. Full disclosure, I helped improve and pass the EBM in 2009 while serving as chairman of the Primary and Secondary Education Subcommittee on the House Finance and Appropriations Committee.

However, because Democrats had created the funding model, newly minted Republican Gov. John Kasich, fulfilling a campaign promise, came into office with less than 50% of the vote and immediately eliminated the EBM, crushing any hope that Ohioans had of actually meeting the state's constitutional mandate of providing a thorough and efficient system of public common schools.

Not only did he fail to fulfill the $3.1 billion promise, he immediately cut $1.8 billion from education and continues to provide less funding today, adjusted for inflation, than was provided to kids in districts during the Great Recession. All while the state's biennial budget has ballooned from $50 billion in 2009 to about $65 billion last year.

One other state in 2010 had adopted the EBM -- Wyoming. Since 2010, Wyoming has jumped in the Quality Counts rankings from 33rd to 7th in 2018. A major driver of that improvement has been Wyoming's continued and significant commitment to funding its schools equitably and adequately. In fact, it's the only state in the union that received an A in education finance (a category that remains the same in both years) from Quality Counts in 2018.

Not Massachusetts.

Not Connecticut.

Not Maryland.

Wyoming -- the most conservative state in the union. I know, right?

If Ohio had stuck with its funding plan from 2010, there is little doubt that this state today would rank up with -- and possibly higher than --  Wyoming overall. Ohio's education finance score is 3.8 percent lower today than it was in 2010, when Ohio actually earned a B for equity, but because of the Recession, Ohio ranked low on adequacy in 2010.

If its score was the same as Wyoming's today, rather than 16 points lower, that would easily offset any of the changes Fordham and others try to use to excuse the state's drop.

This is not a matter of speculation.

It is a fact.

If Ohio had stayed on its funding path from 2010, the state would be ranked far higher today than it currently is. And, more importantly, Ohio's students would have more access to the world-class educations they deserve, regardless of where they live.

That's not being intellectually dishonest.

It is telling the truth.

Friday, January 12, 2018

If ECOT Closes, the Jury's out on School District Impact


Several of the follow up news stories about the potential closing of the Electronic Classroom of Tomorrow are focusing on the potential impact on local school districts. What happens if 12,000 students suddenly show up for school next week who weren't there before?

But this assumes there are actually 12,000 students at ECOT -- a dubious proposition given the school's history of playing enrollment games. My guess is many of those 12,000 students will migrate to one of the other half dozen or so statewide online schools -- some of which actually perform worse than ECOT, if you can believe that.

Another group will probably become home schoolers.

Another group will look for vouchers or brick and mortar charter schools.

Which leaves a much smaller group of potential additions to school district enrollment rolls next week. Ever since ECOT warned they may shut down this year, I know many districts have made preparations to handle the potential influx. And while some districts have more than 1,000 students going to ECOT, because 95 percent of Ohio's 613 school districts lost money and students to ECOT, the numbers for each district are actually pretty low -- about 20 students is the average if you divide the students by the number of districts.

So while some may fret about the huge influx of kids, I'm not so sure that will be the case. Which is why I love reading what Mark Williamson at Akron Public Schools said in response to a reporter's question about what Akron will do if the 200 kids it lost to ECOT this year return:
"We saved them all seats."
Normally, I'd say that's just one guy's opinion, but this is the attitude I've heard for years from school districts around the state: We don't care how many kids there are or whether we get all the money we need to educate them. Just let us take and rescue these kids from ECOT. And for good reason. The graph on the left shows you just how poorly ECOT educates kids.

I heard it 10 years ago when I served in the Ohio House. And I'm glad I still hear it today. Ohio's school districts and teachers are remarkably resilient. But more important, they're simply remarkable. They teach kids because they want to see them learn. And when those kids are in a place that doesn't value learning, Ohio's great teachers and education leaders simply want the kids in a place where they can learn, which is most assuredly NOT at ECOT.

In several days, 12,000 Ohio school children may finally be rescued from the academic disaster that is ECOT. And that, I'm proud to say, is a great thing.

Thursday, January 11, 2018

If ECOT Closes, It Will Be Because It Failed Accountants, Not Kids

There is certainly a buzz about the Electronic Classroom of Tomorrow now. The Columbus Dispatch reported late yesterday that ECOT’s sponsor – the Educational Service Center of Lake Erie West – has decided to drop the school from its portfolio, which means the school may close by next week.

And while I’ve seen this action hailed as an “about time” moment, I want to remind everyone why the ESC decided to drop the school. Is it because ECOT can’t graduate even 4 out of 10 kids and contributed more dropouts than any other school in the nation?

No.

Could it be because since Ohio went to an A-F report card 46 of the school’s 53 Ohio Report Card grades were Fs?

No.

According to the Dispatch story, it’s “due to the online school’s growing financial troubles.”

Frankly, I don’t get it. ECOT’s financial woes, I mean. 

Hear me out. 

Even after ECOT loses its monthly, $2.5 million repayment (because it billed taxpayers for $60 million more than it should have in the 2015-2016 school year), the state pays ECOT $4,831.30. That’s more than the state pays to educate kids in 265 of Ohio’s 613 school districts.

Yet ECOT is a virtual school. So no buses, janitors, lunch ladies, etc. So the school could pay the 597 teachers it had in the 2016-2017 school year their average $37,527 salary, provide brand-new MacBook Pros from Apple at $1,299 each and still clear about $20 million, or 34 percent.

So what’s the problem?

Especially since it was also reported that ECOT laid off about 350 staff this year. Assuming 300 of those were teachers, that would leave ECOT with a 53 percent margin after paying its teachers and providing new MacBook Pros to every one of its students (which it does NOT do, I might add).

Now, according to state audits, William Lager – ECOT’s founder, who runs the for-profit Altair Management, which runs the school – collects about 4 percent of the funding the school receives from the state. Even with the lower margins, though, that still leaves ECOT with about $16 million to pay its management and software people.

Whatever the case, it’s clear ECOT has utterly failed its kids for years. Yet only when it fails the bottom lines for the adults involved does the school sponsor care enough to shut down this operation.

But this isn’t unusual. Of the 260 closed charters in Ohio, most have closed for financial viability. Closures for academic reasons are relatively rare.

Perhaps they should become less so.

I guess, though, in a way, we’re seeing the free market answer to education with the ECOT situation. Just as when a restaurant can’t pay its bills, it shuts down, regardless of whether it's great or bad at preparing food. 

Likewise in the free market education world, a school’s success is predicated on its ability to pay adults. Not educate kids. While this is becoming less so around the country, and even in Ohio to some extent, the fundamental fact remains that in much of Ohio’s Charter School World, the adults are running an operation for the adults, not the kids.

And that, my friends, is a crime.