Bizarro World: Ohio Wins Big USDOE Award for Charter School Oversight.

Every once in a while, I'm gobstopped. Really and truly. Yesterday was one of those times. That's when I found out that Ohio had received the nation's largest award from the U.S. Department of Education for Charter School oversight.

Considering that study after study after report after comment has indicated that Ohio has among the nation's weakest charter school oversight regimes, I was left scratching my head. According to the USDOE evaluation,

"Ohio has established high and exacting accountability expectations of authorizers (including evaluation against standards) and, inferentially, schools. This is critical to their plan and the priority of high quality authorizing permeates this and other sections of the application ... Overall, a very clear and carefully planned strategy."

More outrageous is the reviewers said there were "no weaknesses noted."

Huh?

What about the Bellwether report from December that found:

"Part of the problem has been Ohio’s incoherent charter-school law—a law that has too often failed to put students’ best interests first. Instead, in too many ways, it has protected powerful vested interests, smothered schools with red tape, starved even the best schools, and tolerated academic mediocrity. But fixing Ohio’s charter law is no easy task. The law itself is roughly 40,000 words and has been amended nineteen times since its enactment in 1997. It contains many peculiar exceptions, loopholes, and restrictions."

Or what about the National Association of Charter School Authorizers, who recently reiterated that Ohio's authorizer laws make Ohio the "Wild, Wild West" of charter school authorizing?

Or what about the comment made later in the reviewer comments that found that "The numbers [on authorizers] are very aggressive and not adequately informed by data, especially Past Performance."

I mean, WTF?

How about this little chestnut:

"There is insufficient data to determine the extent to which the academic achievement and academic attainment (including high school graduation rates and college and other postsecondary education enrollment rates) of charter school students equal or exceed the academic achievement and academic attainment of similar students in other public schools in the State over the past five years."

Huh?

Here are the last 9 years of state report cards that allow the public to do that exact thing -- compare charters with local districts and schools. Or how about www.KnowYourCharter.com, which has compiled all that info into one site?

What are these reviewers talking about?

How about this:

"Included in the strategy is demonstrated evidence and willingness to close poor performing schools (p. 22)

According to ODE's own school closure data, only 24 charter schools have been closed under the state's closure law, which was passed in 2005. Of those, 17 were closed between FY2009 and FY2011. Only 7 have been closed under the statute since FY2011. The state has ordered that 56 charters close for several reasons since FY2000. However, only 18 of those happened since FY2011.

To give you an idea of scale, there have been 209 charters shut down since the program began. The state only had anything to do with 81 of those, or less than 40%, with only a handful in the last 5 years.

Where is this so-called willingness?

Try this nugget:

"There is an effort to aggressively replicate successful schools and models that serve at-risk students, primarily in the Ohio 8."

Huh?

This would be news to the Breakthrough Schools in Cleveland, by the way, when according to emails recently released, the head of the Charter School division at ODE thought Breakthrough -- the state's highest performing charter group -- was ruining the Ohio charter school potential.

The Ohio 8 are the big urban districts in Ohio -- Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Toledo and Youngstown.

I can only assume this is a reference to the so-called Youngstown plan, which will replace the elected school board with a CEO who could then turn all schools into charters. But Youngstown is not the area where the high performing charters reside.

Again, where is this aggressive effort to replicate charter groups like Breakthrough?

I'm not saying Ohio shouldn't take the money. My concern is whether Ohio sufficiently misled the USDOE about what's going on here and whether ODE, which is now without a charter school oversight head because the old one manipulated data, is going to ensure this funding goes to schools like Breakthrough and not the old, poor performing, politically connected charter operators.

You can't possibly read this story in the 74 -- Campbell Brown's education reform group -- and square it with the massive award Ohio received.

What's weirder? Try this. Macke Raymond -- the director of CREDO, which looks at charter school performance around the country -- this year told Ohio folks , "Be very glad you have Nevada, so you are not the worst."

Guess who also got a federal award this week? That's right. Nevada.

So the two worst performing charter states in the country got awards from the USDOE to increase the number of charter schools in those states.

How, exactly, does this improve the overall quality of the nation's charter schools?

How Contracts Trump Good Public Policy

Yesterday, I wrote about the recent Ohio Supreme Court ruling that found that White Hat Management can profit from failing kids. While I spent most of my post talking about the campaign contributions Brennan and his family have given to the Justices that ruled for him, I wanted to discuss a little bit about the legal reasoning the court gave for its ruling.

Ultimately, this case was about a business' right to contract its way around good public policy. And that interpretation of contract law has its roots in the 1990s and early 2000s fight over tort reform. Ohio was one of the ground zero states for business interests' attempts to put Justices in place who were pro-business. Ohio Supreme Court candidates have to spend upwards of $1 million to win their seat.

I wrote stories for the Beacon Journal in the 2002-2004 era about Ohio's place as the number one state for negative campaign spending for Supreme Court races. Nobody paid more for negative ads against Supreme Court candidates than was spent in Ohio.

Ultimately, the beneficiaries of these efforts were current Chief Justice Maureen O'Connor, Justice Judith Lanzinger (who wrote the pro-Brennan ruling), Justice Terrence O'Donnell (who recused himself from the White Hat case after taking $15,000 from Brennan and his family), and lately Justices Judith French and Sharon Kennedy. These are the Justices who found that Brennan could profit from the stuff he bought while running schools with public money, even if his mismanagement (White Hat is easily the worst performing big charter school operator in Ohio) caused the school's closure.

And why is that? Because they have a contract.

One of the big things tort reformers wanted was to have contract provisions override other consumer rights. Whether it's through arbitration clauses or other things, businesses want contracts they draft upheld by courts so the business can control the outcome. It's just good business.

But one of the very real consequences of the fealty to contract is the development of potentially really horrible public policy.

Like the White Hat ruling. I'm encouraged that pro-business reformers like the Fordham Institute are now calling for legislative changes to fix this ruling. I'm skeptical that the body whose political ties to Brennan and other for-profit charter school operators run even deeper than the Ohio Supreme Court will do that.

But I hope they do heed Fordham's call.

Back to the ruling.

While a majority of Justices found for White Hat -- saying they owned the property they purchased while running the school -- a lower court found against White Hat, saying instead that public funds used to procure equipment for charter schools are the school's property. So it's not like contract law makes it impossible for a competent judge to rule for the public over White Hat.

It's all a matter of perspective.

Nearly all first-year law students take Torts and Contracts. In Contracts class, you learn how difficult it is to get a contract voided. And for good reason. Caveat Emptor, right? We want contracts to be enforceable, otherwise what's the point?

But there are contracts that get voided for good reasons. I would argue that letting failing charter school operators profit from the equipment they purchased, using public dollars, for the school they ran into the ground is just such a reason.

It would prevent the bad operator from making money off their failure.

But the Justices thought the fact the board signed the contract means Tough Luck.

Never mind that in many cases, these boards were actually hand picked by White Hat. Or that Ohio operators historically have been able to essentially fire truculent board members. Or that the White Hat contract is not negotiated -- White Hat gives the board the contract on a take it or leave it basis.

In fact, the White Hat contract was not an agreement between two parties; it was a document drafted by a company and agreed to by a company-approved panel. However, when that panel turned on the operator, as they did in this case, the operator can now hold the rebellious board hostage by saying, "Sure, you can drop us. But only if you buy back all the equipment we bought for you using public money, or buy new desks, chairs, books, computers, etc."

Yet none of this matters to the Justices. What matters is whether the board signed it.

This is a pure textual argument that illustrates the peril of judges ignoring the context of their decisions. It leads to simplistic legal analysis and blinded public policy.

There is no doubt that textual arguments are sound legal arguments. However, textual arguments in a vacuum can lead to poor outcomes. And, I fear, that's what happened here.

One more thing.

I know many talk about focusing on kids rather than adults when it comes to education policy. I'm struggling to see how allowing White Hat to profit from failing those kids helps kids succeed. Instead, it seems that it will discourage charter schools from firing their failing operators because it would cost them money they don't have to retain their publicly funded equipment. So, in fact, this ruling will most likely have a potentially profound negative impact on kids. But the adults running bad charter school operations? They'll do just fine.

Ohio Supreme Court Justices Take Money from White Hat, Lets them Profit from Failure

Today, the Ohio Supreme Court ruled that White Hat Management -- the state's worst performing large-scale charter school operator -- gets to keep all the equipment it uses public money to buy, even if the school was shut down for being one of the state's worst performing schools.

White Hat -- run by Republican mega donor David Brennan -- can sell the equipment how it sees fit, even if it was its own incompetence and failure that led to the school's closing.

While this opinion may seem somewhat surprising, what isn't surprising is that the Supreme Court Justice who wrote the opinion has taken $5,000 in campaign contributions from Brennan and his family. Justice Judith Lanzinger received that money in 2004.

Chief Justice Maureen O'Connor -- whose political career started in Brennan's Summit County backyard -- received money every year she was up for the court in 2002, 2008 and 2010 when she ran for the Chief Justice seat. She has received a total of $11,900. Surprised she signed onto Lanzinger's opinion?

Justice Judith French received $7,200 last year when she ran for the high court -- as the White Hat lawsuit was pending. Any surprise she voted to uphold White Hat's right to profit from their failed school management?

I credit Justice Terrence O'Donnell for recusing himself from the case. He received more money than any other sitting Justice -- $15,000.

Justice Paul Pfeiffer took money from Brennan in the early 1990s, but hasn't recently and dissented from the Lanzinger opinion.

The opinions on this case are complex and complicated, with many of the Justices trying to seem like they are with White Hat on some things, but not others. Don't let them fool you with their strained efforts. On the only thing that mattered -- allowing Brennan to profit from his failed operations -- they were lock step behind their benefactor.

This case demonstrates emphatically the problem with electing judges. Namely, you get politicians in robes. The Court sat on the case for more than a year, but the minute the media started calling them out for the delay, they drop this disjointed opinion. Their vote splitting on various issues reminds me of legislative maneuvering to let members in tight districts save some face on what will be a bad bottom line vote for their district.

The other big charter school donor in this state -- William Lager of the Electronic Classroom of Tomorrow, which received $100 million last year in state funding as well as all Fs and one D on the state report card -- also gave to Lanzinger, French, O'Connor and O'Donnell. While it wasn't Lager's issue that was before the court, the ruling would let Lager profit off the computers he lets kids use and other equipment he acquires while running that online school -- the nation's largest for-profit school.

We stagger as a state toward a respectable charter school program, while being constantly face slapped by the extraordinary challenges facing those who want quality school options for Ohio's kids. This case is another sobering reminder that, in the words of Robert Frost, we Ohioans who want quality options for kids have miles to go on this journey.

Like Frost, we have to keep seeking. We cannot sleep.

Debate Over. Local Taxpayers Subsidize Charters. Now What?

What a difference a week makes. And what a difference good reporting can make.

Two weeks ago, I joined with Woodridge Local Schools officials to point out (once again) that not only are Ohio's nationally ridiculed charter schools not performing well overall -- a fact agreed to by all major outside examinations of Ohio charter school performance -- and that we should pass House Bill 2 ASAP, but the way they're funded means children in local public schools have fewer resources.

The funding issue is not addressed by House Bill 2.

Over the weekend, Marianne Lombardo of Democrats for Education Reform and Ron Adler of the Ohio Coalition for Quality Education, took me and Woodridge to task for performing a "disservice" by suggesting that charters remove resources from local schools, and that actually local schools benefit from the current system.

Adler completely ignored, by the way, that Woodridge officials independently reached the same conclusions and calculations I did. But, again, he tried to make this a "liberals hate charters" thing, even though charter schools were originally a liberal idea.

Running bad ones that profit from failure, like Ohio's do overall, I agree, is not a liberal idea. But I digress.

Then today's Columbus Dispatch put the issue to bed.

School districts do subsidize our nationally ridiculed charter schools.

When you have Republican education policy leaders in the Ohio Senate, like Peggy Lehner, go on the record with a statement like this:

"It’s kind of a shell game with the money,” she said. “It’s state dollars, but you have to use local dollars to backfill the state dollars. I think it’s pretty clear that these kids are getting local dollars.”

Or when Ohio House Finance Committee Chairman Ryan Smith describes the charter school funding system like this:

“I think we can find a better way, a more transparent way,” he said. “It’s affecting (schools’) bottom line and could somewhat be deceiving in what they’re actually getting.” 

Or when the Ohio Legislative Service Commission determines that 3 out of 4 districts would be in better financial straits if the state funded charters directly, rather than deducting it from districts that sometimes never even had the child walk through their door, then the argument's pretty well over.

I don't know why folks like Lombardo and Adler insist on peddling their snake oil anymore. Now that the Ohio Department of Education keeps better track of charter funding and charter students on their monthly finance reports, anyone can easily see that the current charter system means kids who remain in districts have, in some cases, far fewer state resources than the state claims they need.

Just add up the per pupil funding before charters get their money and kids, then add up the per pupil funding remaining after charters received their funding and kids. It's arithmetic.

Local districts have to make up for that lost state revenue by using local revenue. Lombardo and Adler claim that after charters take their money and kids, the district's overall per pupil funding goes up. But that's deceiving for two reasons:

1. It only goes up because the reliance on local property taxes goes way up, which is contrary to four Ohio Supreme Court cases that said Ohio had to reduce the reliance on local property taxes to pay for schools.
2. It's still less overall money.

I'll try to explain this by way of example. 

Say you have District X that the state says needs $10,000 per pupil to educate its 100 kids for a total of $1 million. However, the state says the district can come up with $5,000 per pupil ($500,000 total) through local revenue. So the state will pick up the other $5,000, or $500,000. 

However, if 10 kids decide to go to charters, the state takes $10,000 for each kid and sends it to the charter. So that's $100,000 going to pay for 10 kids in charters. That means instead of the state paying $500,000 to educate the 100 kids in District X, the state is now paying $400,000 to educate the 90 remaining students. That means instead of the state picking up $5,000 of the cost, they're now picking up $4,444, or $556 less per pupil. 

Now the district has to pick up that $556 using local revenue or spend 5.4% less per pupil. If they do pick up the $556, it means that of the $10,000 per pupil cost for the remaining students, $5,556 is coming now from local taxpayers while $4,444 is coming from the state. Instead of the state picking up 50% of the cost, it's now picking up 44.4% of the cost. The local taxpayers just saw their burden jump 12% from 50% to 56%.

Lombardo and Adler both claim that the per pupil funding increases. That is true. But only if the districts decide to spend the same amount of money. So in our example, $1 million spread across 90 students is more per pupil than $1 million spread over 100 students. That can only happen if the district raises more than the state assumes it does. (And that is true in many cases because the state's funding formula is so inadequate that it underestimates each district's need, but that's another post.)

However, in more than 85 school districts, there isn't enough local revenue generated to replace the lost state funding to charters. So in those cases, Lombardo and Adler are simply wrong. And in the other cases, they're deliberately misleading. 

So in my example, the local district raises $500,000 and now the state is only paying $400,000 for the remaining 90 students. So while the per pupil funding is the same $10,000 as before, it's still less funding to pay for the same heating, busing, food, teacher, and administrator costs the district had before the kids left for charters. And instead of a 50-50 local-state cost share, it's a 57-43 local-state share.

There are many districts that have thousands of students, but only lose a few dozen to charters. So there's no real way to adjust staffing or other costs to account for the less state revenue. They have the same number of buildings, the same number of janitors, the same number of bus drivers, the same number of teachers, and the same number of administrators even with lost kids to charters. Only now, they have less state money to help pay for them.

And it means that local districts have to use sometimes significant portions of their locally raised tax dollars to effectively subsidize the charter school losses. In the case of Columbus City Schools, it's 7.6 mills, or about $266 per $100,000 home.

The question now becomes what do we do about this?

The Dispatch story focused heavily on the direct funding issue. Direct funding was suggested by Gov. Ted Strickland in 2009 -- the year I handled the education budget in the Ohio House. At that time, pro-charter forces panicked that it was an effort to allow Strickland to line-item veto the entire program. So I put the current deduction system back into the budget to allay those fears. 

Go figure.

However, this argument is a canard at this point. No governor -- I don't care how radical -- is going to line-item veto a $1 billion program. It would about like line item vetoing school lunches, the library fund and the local government fund combined. So let's stop saying that some crazy governor's going to line-item veto a $1 billion line item.

Direct funding has been unanimously agreed to by the 2010 School Funding Advisory Council's subcommittee that was charged with finding ways to improve charter-traditional school collaboration. That subcommittee was made up of equal parts charter and traditional school advocates.

Charter schools are creatures of state law. They probably should be paid like they are state actors.

There should also be a formula developed that more accurately approximates the cost of educating children in the lower-cost charter school environment. Right now, they are paid based on the cost in the higher-cost traditional school environment -- ostensibly to make up for the lack of direct local revenue going to charters. However, a more accurate funding formula with direct state funding would all but eliminate that issue. I believe there should also be some sort of way to use the funding system to drive out the profiteers and habitual poor performers while rewarding the handful of high-performing charters the state has and build on that foundation.

There are many ways to fairly and equitably fund charters so the few excellent charters we have can thrive and the many poor performers we have can't last.

I'm thrilled we've now moved beyond the basic question of whether charters impact funding for kids in local districts and are now on to the question of how can we make both systems work for schools, teachers and kids. That is the kind of healthy discussion we need.

As for those who want to continue fighting the war that's only garnered us national scorn? 

I hope I speak for the whole quality-focused charter school reform movement when I say, "Ain't nobody got time for that."