A couple of weeks ago, Doug Livingston, the education reporter for the Akron Beacon Journal declared: “No sector—not local governments, school districts, court systems, public universities or hospitals—misspends tax dollars like charter schools in Ohio. A Beacon Journal review of 4,263 audits released last year by State Auditor Dave Yost’s office indicates charter schools misspend public money nearly four times more often than any other type of taxpayer-funded agency. Since 2001, state auditors have uncovered $27.3 million improperly spent by charter schools, many run by for-profit companies….”
The day after Livingston’s article ran in Akron, Catherine Candisky broke a story in the Columbus Dispatch about the resignation of the entire board of a Columbus charter subsidiary of the national chain, Imagine Schools. What happened in Columbus has happened in other places across the country: Imagine is also a real estate company that makes its profits by renting facilities with exorbitant rental fees back to the schools in the Imagine chain.
It is not legal for private Charter Management Organizations (CMOs) to appoint the boards of Ohio’s supposedly nonprofit schools It is, after all, the responsibility of the charter school board to regulate each school’s relation to the CMO it has supposedly hired. But such technicalities are routinely ignored in Ohio. As Candisky explains: “Imagine appointed five new board members to the Columbus Primary school board on Monday night. They replaced six members who resigned in recent weeks amid ongoing concerns about a high-cost building lease, turnover, and adequate services for students.”
Candisky describes how, “the previous board (the one that resigned) explored closing the school with 150 students attending after clashing with Imagine Schools over several issues, including the academy’s $58,000-a-month lease. The lease is with SchoolHouse Finance, a subsidiary of Imagine Schools Inc., raising questions about a possible conflict of interest. Board members complained that the $700,000 annual lease consumes too much of the school’s $1.3 million annual budget… SchoolHouse Finance purchased the building in 2005 for $1.5 million and made $2.6 million worth of improvements, according to the auditor’s website. SchoolHouse sold the building in 2006 for $5.2 million to a real-estate investment trust, then leased it back from the trust to charge rent to the school.”
One recently resigned board member, Leon Sinoff, a Columbus attorney, explained his reasons for quitting. He was disappointed the board that later resigned was unable to close the school. He became disenchanted when he learned that Imagine had not told the board about “its financial interest in the lease arrangement.” He also expressed concern about the low salaries of the teachers, as so much money went to rent of facilities. The board that resigned was able to raise teachers’ salaries from $30,000 to $32,000, but Sinoff believes the low salaries have been contributing to high staff turnover.
Then on Sunday in the Cleveland Plain Dealer Patrick O’Donnell reported that while bills have been introduced in the Ohio legislature that purport to regulate charters, it is becoming clear that regulations for some of the worst abuses have been quietly removed from pending legislation. O’Donnell explains: “But the Plain Dealer has learned that this plan of making charters better by rating their oversight agencies… is letting sponsors off the hook for years of not holding some schools to high standards… The state’s not penalizing sponsors, we found, for poor graduation rates at dropout recovery schools, portfolios of charter schools that have more bad grades than good ones and, most surprising, falling grades for online schools.”
O’Donnell continues, “We found that the state isn’t counting the performance of online charter schools—one of the most controversial and lowest-performing charter sectors—in the calculations in this first year of ratings. That means that many F-rated charters schools that serve thousands of students won’t be included when their oversight agencies are rated this year.” Neither will the state regulate what Ohio calls “dropout recovery schools”—charter schools that serve kids who have dropped out and are returning to school or at risk of leaving.
It is interesting that even the agencies that promote charter schools have advocated for better regulation in Ohio. Spokespersons for the Ohio Council of Community Schools (Ohio’s term for charter schools), the Fordham Institute, and the Ohio Alliance for Public Charter Schools expressed surprise that Ohio is exempting online schools from oversight this year as had been promised.
Stephen Dyer, the education policy fellow at Innovation Ohio, former chair of the Education Subcommittee of Finance in the Ohio House, and a former reporter for the Beacon Journal published a piece at RealClear Education last week that summarizes the charter school morass in Ohio: “Charter schools… have been hijacked in Ohio by profiteers and huge campaign contributors whose great talent is making money and winning elections, not educating kids. The results have been the poorest performing charter school sector outside Nevada. How bad is it? Some charter schools in Ohio can remain open even though they only graduate 2 out of 155 children. Meanwhile, more than half a billion state dollars that were meant for districts went instead to charters that performed the same or worse than the district last year.”
Dyer reminds his readers that David Brennan, owner and operator of the notorious chain of White Hat Schools— many of them dropout recovery schools that will remain unregulated—and William Lager, operator of the huge and ineffective online Electronic Classroom of Tomorrow (ECOT)—which will remain unregulated, “have given more than $6 million to politicians (mostly to Republicans…) since the program began.” Their schools have, “collected more than $1.7 billion—about one out of every four state charter dollars ever spent.” These two charter operators and lavish financial contributors have reaped enormous profits from Ohio tax dollars. White Hat is a for-profit Charter Management Organization owned by Brennan, and ECOT is served by William Lager’s two privately held companies that provide all services for the on-line academy.