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Monday, August 7, 2017

Don't Worry. Even With Additional 12% Cut, ECOT Still Gets Paid. A Lot.

In another drip in the leak that has become the Electronic Classroom of Tomorrow scandal, the Ohio Department of Education last week announced that it would withhold an additional 12 percent of the school's payments for which it has billed the state.

The idea that another 12 percent pay cut will ECOT out of business is folly. How can I say that? Because I looked at the data.

According to the school's bill it sent to the state for payments last month, ECOT was set to be paid $8.1 million in July for the 14,207 kids it claimed to be educating. Annualized, that would be $97.4 million a year -- not much of a cut from the $103 million they were paid last year.

However, because the state found that in the 2015-2016 year ECOT could only account for about 40 percent of the kids it actually billed the state for educating, the Ohio Department of Education is collecting $60 million from the school -- $30 million for this school year and another $30 million next year.

This is being done in $2.5 million, monthly increments.

So instead of about $97 million, ECOT was set to be paid $67 million this school year. Another 12 percent reduction would make the payment now about $55 million.

That seems like quite a pay cut, doesn't it? And there's little doubt that it is. However, ECOT has cut its staff in half, which means that to pay all their teachers, it will cost them $11 million. That leaves $44 million for them to spend on administrators, their politically connected founder William Lager and computer-related expenses. Remember that ECOT is a virtual shcool. It doesn't pay for buses, lunch ladies, janitors, HVAC, or any of the other myriad, substantial costs brick and mortar schools contend with every year.

But here's the rub of it: the per pupil funding.

If ECOT actually has 14,207 kids, their per pupil state funding has been cut from $6,854 to $3,908 -- about the average net state funding for local school districts. However, if they continue to only be educating full time 40 percent of that figure (about 5,825), as they were found to have done in 2015-2016 (and, according to the letter from ODE, it appears there remains a concern about this inflation), then their per pupil state funding has gone from $16,717 to $9,531.

To give you an idea of how much that is, there are 8 school districts in the state that spend more than $16,717 per pupil, including all state, federal and local money put together, with the highest being the high-performing, wealthy Orange City school district in Cuyahoga County at $21,714. Only two districts -- Orange and Beachwood -- spent more than that per equivalent pupil.

There are about 130 districts that spend more than $9,531 per equivalent pupil and 435 that spend more than $9,531 per pupil. So while, yes, this is a per pupil cut however you look at it, ECOT would still be able to spend per pupil what Newton Falls spends in Trumbull County.

But this all comes down to the actual number of kids ECOT has. If the number of kids remaining is closer to the 5,825, then the school will still clean up from the taxpayers. If they're closer to the 14,207, then they will be (finally) more in line with their actual costs. 

The point though is this: Even with all these fines, ECOT will be able to survive -- maybe not quite as high on the hog as its founder is used to, but it will survive.

And now that the Ohio Republican Party, who has collected millions from Lager over the years, was shamed into returning $76,000 in donations, here's hoping the state's politics are turning away from this failed virtual school experiment at ECOT, where not even 40 percent of students receive a diploma and corruption rules the roost.