Ohio Charters need a 22% Raise? Really?

Now that the Cleveland Plain Dealer has reported just how much more charter schools are demanding they be paid -- a staggering $2,000 per pupil -- I think it's fair to say that their request is a tall order.

If that increase had been granted this past school year, it would have cost the state another $208.8 million -- making the program cost taxpayers $1.1 billion.

How one could look at the above chart of state report card grades and call that increase justifiable, I have no idea. Especially when we are poised to have the most serious attempt in a decade at fixing school funding for the 90 percent of students attending local public schools.

Not only have Ohio charter schools not gotten appreciably better on the report card since House Bill 2 passed in 2015, but since the 2012-2013 school year, charter schools overall have received more Fs than all other grades combined on state report cards. This "House Bill 2 has fixed everything" mantra really bothers me. Even at the time, no one suggested that the fixes in HB 2 were a panacea. In many ways, the changes just caught us up to national norms.

Yet now those rather modest reforms are being used as justification for a massive new influx of your tax dollars.

Here's another complication: the average charter school spends about $400 more per student already. And they spend about $1,000 more per student on non-instructional administrative costs, eclipsing almost 25 percent of their total expenditure. So if they have another $2,000 per student to spend, their current spending patterns would place about $500 of that on administrators. The average school district would spend about half of that.

I hate to bring this up, but whenever charters ask for more money, I'm haunted by our past. As told in the groundbreaking and seminal report on Ohio's charter school roots, Akron Beacon Journal reporters Doug Oplinger and Dennis Willard -- using memos written by Akron businessman and Ohio school choice Godfather David Brennan -- described why Brennan switched from running voucher schools to charter schools:

"Why did Brennan give up on vouchers?

In his two Cleveland Hope schools, he was receiving more state aid per pupil than 85 percent of the public school children in Ohio. But it wasn’t enough to turn a profit.

Only nine weeks into the voucher program, Brennan began to lobby for a 44 percent increase -- or $1,100 -- in the value of vouchers. Brennan told the governor in writing that he was subsidizing his two voucher schools out of his own pocket. Some of that money came out of the Brennan Family Foundation, IRS records show.

In January 1998, Brennan wrote to Needles of the governor’s office and two new confidants -- state school board members Charles Byrne and Joseph Roman -- telling them that if the state didn’t raise the value of vouchers to an amount similar to charter-school funding, he was switching.

“I have indicated to you that the temptation to convert the operations at HOPE Central Academy and HOPE Tremont Academy is almost irresistible because of the higher funding from the community schools,” he told them.

In a recent interview with the Associated Press, Brennan gave a different reason. He said opponents of school choice made vouchers “a dirty word. Charters are a compromise to vouchers.”

But the numbers are revealing. By switching, he increased his state aid per pupil from about $3,000 in the voucher schools and $600 at Interfaith to at least $4,400 and possibly as high as $6,000. (emphasis added)"

Within a few short years of this switch, Brennan was the dominant charter school operator in Ohio and even the country on his way to becoming the single largest donor to Ohio Republicans the state has ever seen.

I know it's popular for charter proponents to pooh-pooh my and others' concerns about charters asking for more money. But as you can see, the history here isn't great. And when charters continue to not perform very well overall, and then demand pay raises over 22 percent, costing taxpayers hundreds of millions of dollars on top of the nearly $1 billion they already spent on these schools, is it understandable why we balk at that suggestion?

If This is Your Best Argument for More Charter Money, um....

Today, the Plain Dealer reported on an updated look at Ohio charter school performance from the Center for Research on Educational Outcomes (CREDO). The center, which is housed at the free market Hoover Institute at Stanford University, discovered that Ohio charter schools are performing about as poorly as ever.

"There is little to no progress in Ohio charter school performance," concluded CREDO Director Macke Raymond, whose comments several years ago about how the free market system hadn't worked in education caused quite a stir.

However, like most charter school analyses ever done in Ohio, CREDO did find pockets of success among brick-and-mortar charters, and blamed the overall stagnant performance on e-schools. Leave it to Aaron Churchill of the Fordham Institute to drive a truck through that mouse hole.

Here's how the PD reported it:

"After years of shortchanging charter students, lawmakers should finally move to fund brick-and-mortar charters equitably, helping to kick-start new-school formation and the rapid expansion of the state’s top-performing charters,” Churchill wrote.

Obviously trying to piggyback on his dubious claim that charters don't get enough money and have earned a raise from state lawmakers, Churchill really stretches out over his skis here. There are major caveats with CREDO's methodology (for a detailed breakdown, take a read here), but here is my major concern -- the group only looks at student growth.

That is one of MANY measures of a school's performance. And growth has always been an area where charters and districts perform more similarly. Districts still beat charters pretty well on the measure, but it's not quite the runaway contest that proficiency or graduation rates are, for example.

Here's another thing: Ohio's been artificially deflating school district performance for years now, dragging down their overall grades to better comport with historic charter school performance. Don't believe me? Take a look at the percentage of grades each sector has received each year since the state started using the A-F system in the 2012-2013 school year.

 What you can see is that since Ohio started changing its testing regime, and more heavily weighting the more charter-friendly "value added" measure, low district grades have skyrocketed. Meanwhile, charter grades have pretty well stayed the same during the same period -- overall pretty bad. Importantly, though, Districts still have less than half the rate of F grades as charters. Just saying.

This got me thinking about the whole light speed thing again.

"Huh?" you ask.

Let me explain.

According to Einstein's Theory of Relativity, it is impossible to go faster than the speed of light (though as a sci-fi fan, I sure hope it's not) because it requires infinite energy. So you can approach light speed, but never go over it.

How does this apply to state report card grades? Well, it's like this: Charter performance was so bad, it would have been impossible for them to get much worse. So they had nowhere to go but up, really. Meanwhile, school district performance was flying quite high in 2012-2013, with barely 10 percent of district grades being designated Fs. So when the state starts implementing new tests over a short period, districts have a farther way to fall, which they do (by design, I might add), which makes it seem like maybe charters are gaining on districts, when in fact district performance is simply being artificially dropped not by actual performance, but by state policy changes. 

Does anyone actually believe that districts are twice as likely to have failing grades today as they were 5 years ago? Please.

What is amazing is that charter school performance has remained remarkably consistent. And poor. Yes, their Fs and Ds jumped a bit after all the testing changes. But really, they've been at about 50 percent Fs all along. Is this because charters did a better job at handling the changes?

No. It's because they were approaching light speed already, and they couldn't have done much worse overall. So even though Churchill and others claim that charters have demonstrated their worth and earned the right for a pay raise from the state, I contend if you think they should get a pay raise now, why shouldn't it have come in the 2012-2013 school year when only 40 percent rather than 50 percent of their grades were Fs? Why would we reward their worse performance today?

Yes, it is true they've improved since the low point of 2015-2016 (the last of the three consecutive years of test switching). But they still receive a higher rate of failing grades than they did in 2012-2013 and have only seen a 17 percent drop in frequency of Fs. Districts have cut their F frequency by 22 percent.

Want another staggering data point?

Since the 2012-2013 school year, a total of 11,832 grades were handed out to the state's charter schools (only 7 schools were statewide e-schools for this whole period, by the way, so the vast majority of these grades are for brick-and-mortar schools). Of those 11,832 grades, more than half were Fs. That means since 2012-2013, charter schools have received more Fs than all other grades combined. The number of As? Barely 1,000. Out of nearly 12,000.

What grade have districts received more than any other?

As.

By more than 1,000.

And this is despite the fact that districts' performance has been intentionally Nerfed by state policymakers who desperately want charter schools to succeed even though the evidence is pretty overwhelming they aren't overall.

Can charter schools work here? I believe they can on a limited basis. Are there pockets of success?Yes. Of course. But for advocates like Fordham to contend an overall performance revolution in Ohio charter schools as the basis for an overall pay raise for this long-struggling sector that even charter advocates admit aren't improving a whole lot, stretches the bounds of reason, especially given how much the state has divested from the 90 percent of kids who aren't in charters.

Let's fund charters based on what it actually costs to educate kids there. Let's give performance bonuses where warranted. Let's do it without hurting kids who aren't in charters.

And let's see what happens.

The Fabrications of a Charter School Zealot

In a recent post by the usually sound Aaron Churchill, the Fordham Institute researcher takes some significant pot shots at William Phillis -- the legendary Ohio public school advocate whose work led to the Ohio Supreme Court ruling four different times that the way the state funds public schools is unconstitutional.

I played on Churchill's title for my title of this post.

Churchill's major problem with Phillis' analysis of charter school expenditures is Churchill doesn't like the inconvenient truth that the average charter school spends several hundred dollars more per pupil than the average school district.

Unfair! cries Churchill. You have to weight the average per pupil expenditure. That way it's more fair. He points to the calculation he made in his recent report arguing that more money needs to be given to charter schools as the only fair way to possibly calculate what charter schools spend.

See, here's the problem.

His "weighted" average per pupil expenditure is not an accurate reflection of how many tax dollars go to charters. If you multiply his "weighted" average by the number of students in charters, the amount isn't actually what charters spend.

If you multiply the "unweighted" amount, it does. All weighting does is make it look like charters spend less than districts.

At the end of the day, taxpayers want to know how much of their money is being spent. And in charter schools, about $400 more is being spent per pupil.

Period.

In addition, Churchill ignores the fact that charters, on average, spend about $1,200 more per pupil on administrative, non-instructional costs than school districts. Even big urban districts spend $300 less per student.

So, in other words, if Ohio charter schools reduced their administrative spending to that of Ohio school districts, even on Churchill's "weighted" calculation, they would end up spending about the same as districts.

It's funny how free market reformers like Churchill quickly disparage "bloated" school district administration, but never point out that if charters were simply more efficient at spending money in the classroom, they wouldn't be begging for more.

That's because overall, charters spend about twice the percentage of their money on administrators as school districts do, equating to about 1 in 4 dollars spent by charters.

Next, Churchill goes to the old argument that charter students have far more challenging populations than school districts. Which is generally true, on average.

However, Churchill always wants to compare charters with the state's 8 major urban school districts (Akron, Canton, Cincinnati. Cleveland, Columbus, Dayton, Toledo and Youngstown).

If one does that, about 2 out of every 3 charter schools have 100 percent economically disadvantaged. Meanwhile, only 2 major Ohio urban districts have less than 100 percent economically disadvantaged populations. On average, Ohio's urban districts have about 5 percent higher rate of minority students and about a 10 percent higher rate of economically disadvantaged students than Ohio charter schools.

So, using Churchill's argument that schools with more challenged populations should get more money, it seems that the fact urban districts spend more per equivalent pupil than charters makes sense.

Also absent from Churchill's analysis is the fact that every dollar leaving Akron and Cincinnati for a charter school last school year went to a charter that performed worse on more state report card measures than Akron and Cincinnati.

Churchill also failed to mention that while lots of folks are rightly concerned that 14 Ohio school districts received overall grades of F on the state report card last year, marking them for state takeover, if one applied that standard to Ohio charter schools, 103 of 340 charters receiving grades either received Fs or "Does Not Meet Standards" if they're a dropout recovery school (mind you that "standard" is graduating about 7 out of 100 kids in 4 years).

So 3 out of 10 Ohio charter schools would be set for state takeovers, if the state takeover law applied to them the way it does school districts.

Oh, and about $200 million of your tax dollars went to charters that would have been marked for state takeover, if they were treated like districts.

I anticipate Churchill will complain that I'm comparing all charters with all Ohio school districts. Charter proponents demand their performance only be compared with school districts and buildings that struggle the most.

However, every school district but one had at least some state money transferred to charters from their state funding. You don't get to take money from every school district, yet demand you be held accountable relative to the performance of the most struggling districts.

Sorry, Aaron.

Especially when the current system forces local property taxpayers in those districts to fork over more of their property taxes to make up for the state funding transferred to charters.

And here is the breakdown of charter and district letter grades on the state report card this last year. As you can see, about half of all charter grades are F -- almost more Fs than all other grades combined -- and more than 7 out of 10 are D or F. Meanwhile, about 6 in 10 district grades were A, B, or C.

I guess what I'm most disappointed by though is Churchill's utter lack of deference and respect for Phillis, who more than any single person in the history of the state has held politicians' feet to the fire on equal and adequate funding for all students.

Frankly, Phillis has forgotten more education funding and policy than either I or Churchill will ever know. Churchill's cheap, ad hominem attacks on this man who has spent his life fighting for all kids to receive a world-class education is truly distressing.

My advice to Mr. Churchill would be to stick with trying to knock me around. Because with Phillis he is punching way above his weight class.

Should Charter Schools Get More Money for Buildings? Depends...

A recent call by the Fordham Institute and national charter school proponents has called for Ohio charter school facilities funding to be boosted by nearly 400 percent to match what they actually spend on facilities. While that may sound outrageous, especially given how Ohio charter schools have been near the bottom in national performance comparisons, I'm (surprisingly, perhaps) sympathetic to the idea.

And I told NPR so yesterday.

With major caveats.

First of all, let's talk money. Currently, charters get $200 per student for facilities funding. Yet they spend $785 per pupil, according to Fordham. Which means, they argue, charters need more money.

I do find it curious that when school districts argue they're not being paid enough by the state to cover expenses, free market folks like Fordham call districts wasteful or slovenly inefficient. Yet no such calls here. Hmmm.

Anyway, I've always believed that ensuring charter schools don't have to go into the waiting arms of ne'er-do-well, for-profit charter school operators would be a strong change in policy. One of the major reasons schools pick for profits is because for profits have access to capital and buildings. However, the for profits then fleece the schools on rents.

Here's the problem, though. That charter facility funding comes out of Ohio Lottery money. Last I checked, we were told the lottery was supposed to save us from having more property taxes. Now the state is removing about $16.6 million a year -- instead of putting it into school districts, potentially reducing property taxes -- and giving it to charters for facilities. If they quadruple that, it would be about $50 million more removed form Lottery funds to give to charters.

I don't think that's what the voters approved when they adopted the Lottery.

See, this has been, is and (I fear) will continue to be the problem with the way Ohio has funded school choice programs. The state siphons off a few million here and a few million there that would otherwise have gone to the 90 percent of students whose families choose local public schools. And they give it to privately run schools that aren't nearly as transparent as local public school districts.

And they generally perform worse that the school districts to whom that money was originally designated.

All that invariably forces local property taxpayers to pass more and bigger levies.

So, I am all for charters getting more facilities money because I think it helps keep the bad operators out of the game. But not if it means the 90 percent of Ohio students who remain in local public schools have to rely on more levies for their educations, or go with fewer opportunities.

If the state really believes in school choice, put your money where your mouth is and fund it with separate money that isn't taken away from local public school districts. Stop forcing property taxpayers to subsidize these payments.

I would feel better about Fordham's advocacy here if they identified a new revenue stream or something else to pay for this expense. But I'm suspecting that they'll just ask for a 400 percent jump in their facilities funding through the Lottery, which will siphons off more money originally meant for school districts.

Fish or cut bait. It's really that simple.

How Kids Not in Charters Are Hurt by Charter Funding System -- A Case Study

It's really easy to sit back and make esoteric arguments about how Ohio's charter school funding system hurts kids who are not in charter schools. And there's a recognition from leaders in the Ohio General Assembly that the funding system -- which diverts state funding meant for a district to a charter -- is a shell game that leave school districts with far less state revenue than the state says they need to effectively educate their students. This, in turn, forces school districts to use sometimes large segments of their locally raised revenue to make up the difference.

But what does that mean for a kid attending a local public school district?

As an example, I'm going to use a student in Columbus City Schools. Let's assume he or she started first grade in the 2005-2006 school year, which would make this student a senior this year (by the way, I was first elected to the Ohio House in 2006. Wow, does this make me feel old!)

Anyway, I looked at how much state funding this student lost each year of their career because charter schools receive so much more per pupil state funding than Columbus City Schools would have received for the same kids. (Looking at state funding reports here and doing addition and subtraction based on number of students in Columbus before and after charter students leave, as well as how much state funding comes to Columbus before and after charter students leave.)

Yes, I know charters can't raise local revenue. However, the legislature has chosen to not put its money where its school choice mouth is and create a separate fund to make charter schools whole. Instead, they make up a chunk of the local funding disparity by removing extra state funding from the local school district's bottom line, forcing local property taxpayers to do their work for them.

So, for every student who began their Columbus City Schools career in 2005-2006, they have received $10,548 fewer in state revenue, with another $1,142 set to be lost this, their senior year (charter enrollment is so volatile, this figure could change substantially during the year). To give you a sense of scale, that amount equals about the amount of state funding these Columbus students received their first three years of school -- in many ways the most important years.

So because of Ohio's charter school funding system, kids in Columbus essentially are fully locally funded for about 3 of their 12 years in Columbus City Schools. The state only gives them their state funding for about 75 percent of their academic careers. All so schools like the nation's largest dropout factory -- the Electronic Classroom of Tomorrow (which has received the most money from Columbus of any charter for several years) -- can keep collecting their money and failing to graduate even 4 out of 10 students.

Yes, there are high performing charter schools in Columbus (and elsewhere). I visited one on Monday -- United Preparatory Academy - State. And they are doing great work for many kids. But at what cost to the 90 percent of Ohio's kids who aren't attending charters?

Let me say this is not UPA's problem. It's a state leadership and legislative problem.

But is it worth the relatively small successes statewide in a handful of charter schools so every kid (let me repeat, every kid) in Columbus loses 1/4 of their state revenue over the course of their academic careers?

And what's the impact on local taxpayers?

Local Columbus taxpayers have had to subsidize charter schools to the tune of $556 million during our hypothetical student's career. In other words, more than 1 out of every 10 dollars raised locally during that time frame have gone to fill in the lost state revenue to Ohio charter schools, increasing the district's reliance on property taxes to pay for schools, which is the exact opposite of what the Ohio Supreme Court ordered the state legislature to do four different times.

The chart on the left shows you how many local property taxes were raised in Columbus since the 2005-2006 school year (from the Ohio Department of Taxation), and how many were left after the state funding lost to charters was taken out.

These results are repeated throughout Ohio. Urban. Suburban, Small Town, Rural districts. No type of district is immune from these charter funding problems.

Statewide, the average Ohio student who started first grade in the 2005-2006 school year has lost $2,332 in state funding during their academic careers to the charter school deduction, with another $242 expected to leave in this, their senior years. And local taxpayers have been forced to use roughly 4 percent of their property tax levies to make up for that loss -- money no voter ever approved for such a purpose (except, it could be argued, for a 15-mill levy in Cleveland that partially goes to charters).

The system has been broken since the beginning. Ohio needs to develop a funding system that accurately calculates the cost of education in charter schools and doesn't fundamentally hurt kids whose parents choose to keep them in local public schools. Lawmakers need to put their money where their mouths are and fund charters fairly using their own, committed state resources, not exacerbate an already unconstitutionally funded school system that's increasingly reliant upon local property taxes.

Our kids desperately need this system to change so it can work for all of them. For it currently works for none of them.

Charter Schools Do Get Direct Local Funding. Sort of.

OK. This may be a little in the weeds, but I think it's important to point out as we consider charter school funding.

Contrary to the complaints of many, charter schools actually do receive direct local revenue.

Sort of.

Yes, there were eight charter schools that actually received local property tax revenues last year, to the tune of less than $500,000 total. And when charter proponents claim that charters get no local revenue except for a few, this is what they are discussing.

However, until 2012, there was another revenue stream that was considered "local revenue" by the state of Ohio that were not local property or income taxes. These payments (tuition, interest on money, fees, etc.) were considered "local revenue" when the Ohio Supreme Court ruled four different times that Ohio's school funding system was unconstitutional because it relied too much on local sources.

In 2012, in a move I criticized at the time for trying to artificially inflate Ohio's state commitment to education, the state removed these other local revenue streams form the "local funding" calculation and created a new one called "other non-tax". However, because these payments were considered local for the previous 20 years of data, to make state-local, apples-to-apples historic funding comparisons, you have to wrap the "other non-tax" revenue in with the "local revenue" funding stream.

Why am I re-living this intensely nerdy argument? Because this "other non-tax" revenue stream provides a significant chunk of change to Ohio's charter schools, and in a few cases even provides more funding to charters than the schools' state revenue stream.

In fact, last year, 87 percent of Ohio's charter schools received at least some "other non-tax" revenue streams, which until 5 years ago were considered "local revenue." The total was just short of $44 million spread across 328 charter schools. The average per pupil amount for the schools that got this funding was $435. That's not insignificant.

The iLead Spring Meadows and Global Ambassadors Language Academy charter schools both received more of this "other non-tax" revenue, which at one time was considered "local revenue", than they received state revenue. And 38 charters get more than $1,000 per pupil from "other non-tax" revenue sources. The major chunk of these payments come from fundraising or grants the schools receive.

So in addition to receiving far more per pupil state funding and more per pupil federal funding than the Ohio school districts with which charters compete, they also receive significant sums from what until 5 years ago was considered "local revenue".

So what does this mean? It means that charters do get locally raised money, though not from (for the most part) the largest pot of that locally raised money -- property taxes. But it's not entirely accurate to say charter schools don't get local revenue.

Because but for a name change made by bureaucrats five years ago, they actually do.

Sort of.

Even with layoffs and fines, ECOT will make a killing.

Recently it was reported that Ohio virtual school giant the Electronic Classroom of Tomorrow (ECOT) was laying off 350 staff members so the school could pay back the $60 million it owes taxpayers for kids it couldn't demonstrate it actually educated.

ECOT shills have said the state's decision to have the school pay back the fine over two years (at $30 million a year) by removing about $2.5 million a month from its payment schedule has threatened the school's financial viability.

Only if you think at least a 30 percent profit is untenable. I guess compared with the 40-45 percent profit they're used to receiving,30 percent a pittance. But what business wouldn't kill for 30 percent margins?

Oh, and it's probably more -- a lot more -- than that.

Here's how I calculated it. According to the latest data available, ECOT had 607 teachers in the 2014-2015 school year who were paid, on average, $36,038. Assuming that 300 of the 350 layoffs were teachers, that means there are now 307 teachers for the school's 14,207 students -- a roughly 47:1 student-teacher ratio.

However, that means ECOT -- a school without buses, lunch ladies, custodians, or myriad other traditional education costs and expenses, will only spend $11 million of the $73 million the state's preparing to pay the school this coming school year on teachers. So ECOT could give every kid a brand new, $2,000 laptop and still clear 30 percent.

For the record, ECOT kids are definitely NOT receiving $2,000 laptops and the 30 percent calculation doesn't include the 50 additional lost staff, many of whom could be making more than the teachers.

So the margin is probably larger than 30 percent. In fact, it's so large (even with $30 million fewer over the year, ECOT's per pupil state funding of $5,192 is more than what kids in 56 percent of local school districts received from the state last year) that ECOT could still pay politically connected founder William Lager his $20 million a year to "manage" and provide the software for the school and still have about $8 million to pay for its servers, administrators, etc. To give you an idea of what $8 million gets you, that's about what Lancaster Local or Brunswick City schools spend annually on administration.

In other words, Bill Lager can still clean up and the school can still run.

Of course, the school could have paid Lager a mere $10 million and kept all of its teachers, but as with nearly everything else about ECOT, profits trump kids.

No surprise there.

Always Do Your Runs BEFORE You Introduce School Funding Legislation

State Rep. Andrew Brenner, R-Powell, has introduced his school funding bill, which would be a radical change from the way we fund schools today. He would essentially eliminate local property tax levies, create a statewide property tax, roll that into state funding, then give every kid a set amount of per pupil funding that could be used at any public, charter or private school in the state -- essentially getting rid of public schools as we've known them and turn public education into a massive voucher program.

While I actually like the idea of creating a statewide property tax to lessen the need for local levies, eliminating the ability of local communities to invest in their kids as Brenner calls for is misguided. And I would never suggest that we roll all the education money into one pot to be equally distributed to all school types. Why? Well, because that means ECOT -- yes, that ECOT -- would see a massive funding increase and most districts that perform far better than ECOT would get cut. A lot.

How is this so? Because ECOT would now be able to access that one area of school funding that so far has been off limits to all but a few Ohio charters -- local revenue.

In Brenner's bill, he sets the new per pupil funding level at $8,720 per pupil (plus categoricals, but I'll discuss that later). While that's a big boost from the state's current $6,000, don't forget that he's outlawing local property tax levies. So in order to do an approximation of economic impacts for kids, you have to add together their current state and local per pupil revenue, then subtract it from the $8,720 to find out the minimum amount that each school gets.

Surprise. The 270 largest percentage increases go to charter schools, with ECOT seeing at least a 55% per pupil increase. And this is before categorical funding (additional money sent for poverty, special ed, etc.) is included. So we're looking at perhaps as much as doubling funding to some charters, and nearly doubling the per pupil funding to ECOT, which can't graduate even 4 out of 10 kids.

In fact, 85% of charter schools would be in line for increases as large as 287%, with an average 39% increase for the 334 charters that would see increases just on the minimum funding level (we have just about 380 charters). I have provided you with just 79 the charters that will receive a 50% or greater increase based on Brenner's minimum funding level.

Meanwhile, there are 115 school districts (of 613) that would receive per pupil increases, but the average increase is a far more modest 6%, with a top of 22%.

So, the minimum per pupil funding level Brenner's plan would provide would give 85% of charters increases and 85% of districts cuts. While categoricals will adjust these numbers, overall you see the pattern -- massive benefits to kids in charters and massive detriments to kids in districts.

This is why you have to do trial runs on the figures before you introduce legislation. It's something Gov. Ted Strickland learned during the Evidence Based Model debate in 2009. It's something Gov. John Kasich learned in 2013. And it's something Brenner should have known before he introduced his bill.

Then, perhaps, he would understand why he has no co-sponsors on his bill.

There's Progress in Them Thar Charter Runs

Gov. John Kasich has been taking heat from me and others over his treatment of Ohio School Districts under his as introduced budget. What with 85 percent of Ohio's rural districts being cut, and now that the Ohio Legislative Service Commission has determined that Kasich's further reduction in reimbursement payments for lost Tangible Personal Property Taxes will mean that 388 of Ohio's 609 school districts will get less money in the 2018-2019 school year than they will this year, that criticism is warranted.

The Republican chair of the House finance committee called the plan "asinine."

So I'm not alone here.

Anyway, despite all this and Kasich's open admission that property taxes should fund more public education, in contravention to four Ohio Supreme Court rulings, there is a slight, silver lining in his funding plan from an unlikely place: How it treats charter schools.

Yes, only 9 out of 370 charters will get less money in the 2018-2019 school year versus this year -- a paltry 2 percent cut rate compared with the nearly 65 percent of school districts that will see less money. But there are things to like about the direction of the charter funding.

Again, this is all relative to our atrocious history with charters. So take that caveat with you on this journey.

First of all, Kasich froze the base per pupil funding amount from this school year at $6,000 for each of the next two school years. So the automatic increase charters have traditionally received over the years from the steady increase of the per pupil funding amount won't happen this budget. And while I have reservations about this as a policy long term, the fact is that for the first time since the 2010-2011 biennium, charters won't get automatic increases.

The increases charters do receive are two-fold: money for facilities and money for performance. The facilities money is problematic because it comes out of state lottery money originally voted by Ohioans to go exclusively to school districts in order to relieve property tax burden. But it's not a ton of money.

Where I'm really encouraged is the money earmarked for performance. That slight increase, coupled with flat funding the elements that have historically bumped charter schools' funding, means that the largest increases for charters in this budget (generally) go to the highest performing charters in the state. So, for example, the Electronic Classroom of Tomorrow, the Ohio Virtual Academy, OHDELA, and the other horrifically performing eSchools get zero additional dollars. Meanwhile, the high performing Cleveland charters and the Dayton Early College Academies get the largest increases.

That is a far cry from previous budgets this Governor has produced where the worst performing charters got the largest dollar and percentage increases.

The problem of charter funding remains. Too often, local property taxpayers have to subsidize the vast majority of low performing charters that currently operate here. And Ohio's House Bill 2 reform is maddeningly slow paced at producing the changes we need to see.

In addition, the largest dollar increase for performance (just under $50,000) wouldn't even cover the cost of an additional teacher.

But considering where we've been as a state on charters (namely, a national laughingstock), this is most definitely progress. I look forward to having a robust discussion about reforming the mechanism for this state's charter school funding soon. But for the first time in our state's history, it appears we have a budget before us that provides more funding to the best performing charters in the state and does not reward the worst performers.

I suppose you can call this the slow slog of progress.

For First Time Ever, Fewer Ohio Kids Attend Charters than Previous Year. Yet Funding Still Grows. Here's How...

For the last two years, the stories about Ohio's mostly failing charter school system have been numerous and compelling. In addition, the scrutiny has meant that websites like Know Your Charter have shined a fresh light on Ohio's charter school performance issues. The result has been the state's first enrollment drop at charters since the 1998 bill creating them passed.

However, there was NOT a commensurate drop in overall funding to the state's charters. How could this be? Especially given many charter school advocates' pleas for a "money follows the child" system? If money truly "followed the child", shouldn't a reduction in the number of children create fewer, not more charter school resources?

Of course.

However, in Ohio, we don't have that system. Instead, we have a system that has Ohio's legislature and governor protect the funding for the state's charter schools, whose operators have given millions to re-elect them.


In the 2015 budget, Gov. John Kasich signed into law provisions that gave charter schools significantly more additional facilities funding (even for e-schools, which - by definition - don't have facilities), as well as bonuses for graduation and third-grade reading guarantees. The budget also deducted funding from charters for regional Educational Service Centers, just like ever other school district. (By the way, remember this fact the next time anyone says the only way to fairly compare charter performance is between charters and school buildings rather than districts, for they're paid and treated by the state as districts.)

The result was that charter schools' bottom lines were sufficiently bolstered by their 88% increase in add on funding to provide a modest increase in overall funding, as well as a 2.6% increase in per pupil state funding. So despite a significant drop in enrollment (and a far less significant drop in base funding to charters), the legislative add ons allowed for charter schools to keep their historically perfect record of annual, overall funding increases, regardless of macroeconomic realities.

The legislative add ons will continue for this next school year as well. So I would fully expect Ohio's charters to continue receiving more funding than previous years, even if their overall enrollment continues to drop.

Here is the chart showing how Ohio charter funding has continued growing, regardless of year or economy.

Ohio Expenditure Data: Charters Spend More on Administration, Less on Instruction

Back in 2010, Gov. John Kasich claimed the state's education funding formula didn't spend enough money in the classroom. He claimed then that districts spent too much money on administrator salaries.

Yet new state spending data  for the 2014-2015 school year shows that Ohio's school districts spend less money per pupil -- and a much smaller percentage of its overall spend -- on administrators than Ohio's charter schools -- the allegedly more "efficient", business-like education answer.

In fact, the median Ohio charter spends nearly $1,000 more per equivalent pupil on administrators than the median Ohio school district. This facts is made more remarkable given that the median Ohio charter spends about $1,400 less than the median Ohio school district.

Charters spend so much more that, as in years past, if Ohio's charter schools spent per pupil on administration what Ohio's public school districts did, charters would be able to spend about the same amount of money in the classroom as districts do, despite their $1,400 less overall spend.

So, according to the data, the least efficient way of putting more money in the classroom, as Kasich professed he wanted to do in 2010, was dump more of it into charter schools. Yet charter funding has increased by about one-third since Kasich took office.

Run schools like a business indeed.

Districts Bill State for More than $200 million in Charter School Funding

There's something happening here.

With apologies to Buffalo Springfield, in Charter School Finance World something really is happening, and it's started at the grass roots.

Starting with Woodridge Local Schools in Summit County, districts across the state have invoiced the State of Ohio for past payments made to charter schools from districts' state funding. Looking at news stories and available public records, I've calculated that about 30 districts have billed the state for more than $200 million in past charter school transfers.

However, that amount is probably higher because on one district, I assumed the invoice was for one year because that was the only figure I could find. But I'm sure the bill was for more years. Meanwhile, on at least 3 others, I couldn't find the actual bill amount, but I know there are invoices.

So we have what could be north of a quarter billion dollars worth of invoices sent to the state by a growing number of school districts.

While some call this a "stunt", I think it's more than that. It's local school districts finally standing up for their kids and against the moneyed interests that have driven Ohio's charter schools into a ditch of national ridicule.

The root of all this stems from the state's funding system, which pits districts against charters and reduces state funding for kids not in charters, sometimes substantially.

All you need to do is look at a finance report from any district and calculate what the per pupil funding amount is before charters get their kids and money, then how much kids in the district get after charters get their money and kids. Kids in some places like Columbus and Cincinnati lose almost 1/4 of their state revenue because charters get paid so much more by the state.

This means local property taxpayers have to make up the difference, or services for the kids in these districts get reduced. And in some locations, there isn't enough local revenue to make up the difference, so overall per pupil funding goes down.

I'm encouraged that Ohio Legislative Leaders on both sides of the aisle recognize this problem and are working to fix it. No parent's choice should adversely impact the educational opportunities afforded another parent's children.

Unfortunately, the current system does just that. Stunt or not, this Invoice Revolution is letting people know about the problem, and that is indeed worthwhile.

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."

Yes. Charter School Funding in Ohio hurts kids not in Charters

There has been a claim floating in the ether that states something like this: Charter school funding in Ohio has a neutral impact on funding for non-charter students. Marianne Lombardo -- an analyst for Democrats for Education Reform -- has made this case pretty emphatically.

I suppose I just have to once and for all demonstrate how the charter funding system hurts kids not in charters. I am inserting a screen shot of a simple spreadsheet for you to examine. All it is doing is taking data from the Ohio Department of Education's own funding spreadsheet (identified in the upper left cell) from the second June payment made last school year. The formulas used to make the calculations are laid out in the sheet for you to see.

In it, you can see that prior to charter schools receiving their funding, children in districts receive more money per pupil than they do after charters take their money and students.

Yes, local revenue can fill the gap. But there is, in fact, a gap. And not every district has enough local revenue to fill the entire hole. And in any case, there remains a hole in the total amount spent in the district, even with local revenue. So in many cases, districts have to cut back to make up the difference.

I don't wish this to be so, but the data don't lie. If kids in local schools have $5,000 in state money (as an example) before charters get paid, and $4,850 in state money after charters get paid. How, exactly, does that not adversely impact children who aren't in charters?

There are ways to ensure this doesn't happen. Direct funding of charter students is one way. Ensuring no charter student receives more per pupil funding from the state than the state would send to the child's district, then having the state make up for the lack of local money with a separate charter fund is another.

The long and short of it is this: We don't have to do it this way. I'm not trying to pit parents against each other. The current system already does a bang up job of that.

I'm trying to explain a funding inequity that harms the 90% of children who aren't in charters. I have been encouraged that some have been equally concerned about this problem on both sides of the issue. But, once and for all, can we stop trying to explain away simple math?