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.

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.

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.

State Rep. Misleads on School Funding. Again.

It's not every day that my state Rep. Anthony DeVitis, R-Green, sends me a letter. Bu I received two at my home yesterday -- both addressed rather personally to "Edcuator". So, curiosity caused me to open them. It was a letter explaining what great things he and his colleagues are doing for education in the state's biennial budget.

The budget passed in June, so I'm not sure why I'm getting this a week before Christmas, but whatever.

Anyway, there were four bullet points he mentioned. The first was the removal of a provision that would have forced teachers to shadow a business leader. The second was the elimination of a provision that would have put business leaders on school boards as non-voting members.

Let's pause there.

These two provisions were never in state law. These provisions were proposed by Gov. John Kasich -- the same party as Rep. DeVitis. So he's claiming a victory for stopping a provision proposed by the governor of his own party.

Weird.

The final two are really misleading, though. He claims that the per-pupil funding for students was increased. Which is true. By $100. Now students get $6,000 per student. That's about $600 less than a simple inflationary increase would have provided over the last 10 years.

And one more thing: anytime an Ohio politician tells you the per pupil funding level increased, understand that means the only schools to which this means a definite increase in revenue is charter schools. That's because the small per pupil increase DeVitis touts will likely be offset by cuts to transportation or other areas. But charters never see cuts in those areas because they don't have to provide transportation. So what he's really trumpeting is an increase to funding for charter schools -- most of which do a worse job educating kids than the districts the kids leave -- and cost the state about twice as much per pupil to educate.

Yes, charters don't get local revenue, but they do get about twice as much per pupil funding from the state.

The fourth and final bullet point is that state foundation funding increased by $154 million in this school year and $120 million in the second year. What he and his colleagues never mention is that while the foundation line has increased, other lines that contributed significant revenue for kids in the past have been eliminated, or all but eliminated, by this legislature. For example, in 2009, the state provided about $1 billion in reimbursements for local tangible personal property tax payments the state eliminated in 2005. Now these schools get barely $100 million.

Also, in 2009, there was about $450 million coming annually to Ohio from State Fiscal Stabilization Funds that were intended to be replaced by state funding once the economy snapped back from the Great Recession. But DeVitis and his colleagues declined to replace that funding, effectively eliminating $450 million a year in education funding.

So overall funding since the Great Recession budget of 2009 is almost $900 million less over the course of this budget than districts received at the height of the Recession.

He continues to tout the benefits of HB 170 -- a bill he says (among other things) would "authorize" districts to set up a computer science and technology fund which he said could consist of district revenue, or privately raised money.

Notice the one pot of money he didn't mention? That's right. Not a single state dollar would be designated for these local tech funds. All the bill would do is let districts set aside some money and raise local money for a tech fund. But it's not important enough for the state to actually contribute even one penny.

Add this to the fact that the state is seriously considering spending at least $48 million on an unprecedented expansion of vouchers paid to private, mostly religious schools, and you start wondering if DeVitis and his colleagues are really concerned about the 1.6 million Ohio students in local public schools. If he's willing to drop $48 million or more on vouchers that we know hurt kids' education attainment, why won't he invest a single penny in establishing local tech funds?

I doubt that DeVitis did this independently. He's not on any education committees. I would assume all Republican members are sending around similar letters, trying desperately to explain away their terrible negligence of our state's kids.

But they're going to have to do better than that.

Ohio Charters More Segregated than School District Buildings. Is this the Real Charter School Civil Rights Issue?

A recent story in the Columbus Dispatch revealed that Ohio's charter schools mirror charter schools nationally in that they have been a major contributor to the re-segregation of the nation's public schools.

However, it appears that the Dispatch story was a localized version of a national Associated Press story that used federal data to reach their conclusions. Using that data, the Dispatch found that by 2015, 25 Ohio charters had 5,000 minority students without a single white student.

So, using a similar segregation standard, I decided to take a look at state-level data. And the results are striking.

Last year, in Ohio's brick and mortar charter schools (I excluded eSchools, as the AP did), 27,451 of 48,208 black students attended charter schools with fewer than 15 percent white student populations. That means about 6 in 10 black charter students attend schools with nearly every student being black.

Meanwhile, less than 35 percent of black students in Ohio's urban school buildings attend schools with fewer than 15 percent white student populations.

And outside of the big 8 urban districts (Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Toledo and Youngstown), the desegregation is even more remarkable. Only 12.3 percent of Ohio's black students attend schools with less than 10 percent white students. Remember that last school year, about 1/2 of all Ohio charter school students do not come the state's Big 8 urban districts.

Meanwhile, Only 28 of 2484 district buildings fit this segregated definition, which is a stunning 1.1 percent of Ohio's non-Big 8 public school buildings. And only 23.3 percent of Ohio's Big 8 buildings fit this segregated definition.

Ohio's charter schools?

28.6 percent.

Finally, you can look at a simple line graph to see how the distribution of racial composition is much more uniform in Ohio's urban buildings than in charters. What does this mean? It means Ohio charters tend to be more frequently segregated and to a greater degree than their urban school building counterparts.

Look, it's bad enough that Ohio charter schools overall have a performance problem and a funding problem. Now it appears they have a serious racial segregation problem -- an issue that was deemed unconstitutional by the U.S. Supreme Court in the landmark Brown v. Board of Education case in 1954. It seems to me that allowing more students greater access to a more segregated school system would run afoul of that historic ruling.

Are there exceptions to this rule? Of course. But overall, the trend is clear.

Can we please address these serious and significant problems quickly and firmly, Ohio General Assembly and Gov. Kasich?

Anyone care to hold their breath while we and our kids wait?

Kids in 100 Ohio School Districts Lose Overall Funding to Charter Schools

One of the arguments pro-charter folks typically trot out to oppose the "charter schools cost students in local public schools money" argument is that while state funding drops, per pupil funding goes up because no local funding follows the charter school student to the charter school.

The way charters are funded Ohio is if a child decides to leave Columbus City Schools, the state removes at least $6,000 in state aid originally meant for Columbus to educate the student and sends it to the privately run charter school. The problem is that the state would have only given Columbus about half that amount if the students had stayed in Columbus. So it doesn't take long for that state funding loss to add up.

Columbus then has to fill in the state funding gap with money raised from local taxpayers. And while that will mean an overall per pupil increase for some districts, the reliance on locally raised property taxes jumps significantly, which is the exact opposite result the Ohio Supreme Court ordered the Ohio General Assembly to fix four different times.

Last school year, for example, several school districts saw their state-funded share of the education funding pie drop by as much as 27 percent. Here is a list of the top 25 percentage state funding share drops.

As you can see, the major urban school districts see the largest percentage of state aid cut from charter school deductions. So this means the state's unconstitutional funding system that relied too much on property taxes is exacerbated the worst in our urban core.

But there is also a phenomenon that pro-charter advocates rarely discuss: What about school districts that don't raise enough local revenue to make up for their huge state funding losses to charter schools?

Yes, there are school districts that fit this mold. In fact, about 15 percent of Ohio's school districts fit this bill as kids in 100 school districts lose overall funding to charter school deductions.

That's right. In 100 Ohio school districts, charter schools take so much of their state revenue that these districts can't raise enough property taxes to make up the difference.

Here are the top 25 overall, per pupil funding losses to charter schools. Remember that every kid in each of these districts lose overall funding because charter schools take so much local revenue the local districts can't raise enough property taxes to fill in the gap.

Now these per pupil funding losses are not enormous. But the fact is that they happen, and they do so fairly frequently. And even when they don't, the charter school funding system makes our state's unconstitutional, property tax overreliance worse, not better.

It would be one thing if charter schools were providing better educational options for our kids. But they, on the whole, are definitely not doing that.

So here's the result of more than $11 billion spent over 20 years on Ohio charter schools: schools that perform worse than the schools they were meant to compete with all while making Ohio's school funding system more unconstitutional.

Think we need some reform?