Portfolio School Reform and Unregulated Charters Harm Ohio as School Year Begins

On Monday, children in Cleveland, Ohio began the 2016-2017 school year, but problems in a one-party Republican state whose legislature has warmly embraced “corporate school reform” will affect their education this year.

First of all, as the school year began on Monday, the Cleveland Teachers Union presented the school district with the required 10-day notice of a strike, to begin on the Friday before Labor Day unless the district and the teachers union can reach agreement on a long-running problem.  Teachers, who have been without a contract since early July, are wearing blue t-shirts that proclaim, “I don’t want to STRIKE, but I will!”

Why begin the school year with such conflict? Actually it isn’t a new problem. In 2012—with support from the Cleveland business establishment, the philanthropic sector, and the mayor and his appointed school board—the Ohio legislature passed a portfolio school reform plan (Manage the district like a business portfolio with a marketplace of school choice including rapid expansion of charters that receive local tax dollars.) and imposed it on the Cleveland schools.

Plain Dealer reporter Patrick O’Donnell explains that the Cleveland Transformation Plan also has affected salaries for teachers, and continues to affect contract negotiations four years later: “Negotiations on this contract are more complicated than in most districts, thanks to the Cleveland Plan for Transforming Schools…. That Plan called for a teacher pay plan ‘based on performance,’ instead of the traditional teacher salary schedule other districts use. That made Cleveland the only district in Ohio that no longer gives raises for years of experience and degrees that teachers earn. But the district and union have failed for four years to create the full pay plan called for in law and in the last teacher contract, reached in 2013. Though the sides agreed in their last contract that teachers would receive raises for multiple reasons, the district is only awarding them when teachers receive strong ratings on annual evaluations.  Ignored, so far, are contractually-agreed items like teaching in hard-to fill jobs or undesired schools; completing pre-approved courses and training that directly affect teaching; and taking steps to develop as a mentor and leader. That leaves raises entirely based on ratings, which are greatly affected by student test scores. ‘We have an over-reliance on using these standardized tests to evaluate teachers,’ (David) Quolke said.”  Quolke is president of the Cleveland Teachers Union.

Quolke has said the union does not desire a strike but has no other option. After all, the district has a crucially important local school levy on the November ballot. In Ohio, a state that brags there are no unvoted tax increases, school districts must take requests for local property tax millage directly to the voters.  Quolke has declared, “It is our hope that the CMSD (Cleveland Municipal School District) and the Mayor will commit to using the next two weeks to resolve the contract. It is essential that we invest in our schools and in our students, and we provide more, not fewer opportunities for students; and it is essential that we settle this contract and begin working to pass the Cleveland school levy.”

Like many school districts in Ohio, Cleveland is also being affected by the statewide scandal over reimbursements to charter schools which are sucking money not only out of state reimbursements to school districts but in many cases also redirecting local funds. In the news all year has been the scandal of reimbursements to the notorious online charter school, the Electronic Classroom of Tomorrow (ECOT), where evidence has emerged that many students whose education is being underwritten by tax dollars are not really actively pursuing an education. ECOT is reported to be sucking over $7 million every year out of Cleveland’s public schools.

The problem is in the legislature, which has failed to address a long-running problem of tax funding paid to ECOT for students who have signed up for ECOT but who fail to participate regularly. ECOT has been reaping over $100 million each year, tax dollars that feed the profits of the two privately held management companies owned by ECOT operator William Lager: Altair Learning Management and IQ Innovations.

We have known that ECOT has hidden attendance records and has asked the courts to block the Ohio Department of Education from checking up. The courts have instead ordered ECOT to present attendance records to the Ohio Department of Education. Now it has become clear that, although ECOT students are said to spend a lot of time in offline activities that further their education, ECOT has not kept records of these activities at all. While there are minimal computer log-in reports—a preliminary audit indicates students are averaging an hour per day in logged participation— The Columbus Dispatch recently reported that Ohio State Auditor David Yost signed what is called “an agreed-upon procedures engagement” that did not require ECOT to keep detailed logs of its students’ activities.

Dispatch reporters, Jim Siegel, Catherine Candisky and Bill Bush explain how Ohio’s sketchy attendance rules for the full-time, online charter schools evolved: “Today’s legal battle potentially involving hundreds of millions in taxpayer dollars paid to online charter schools in Ohio began more than 15 years ago with an audit, an unusual agreement and a mysterious scrawled signature—followed by years of legislative inaction… Back in 2002, state officials weren’t thinking about checking for 920 (annual) hours of attendance or tracking students’ computer log-in durations. Few rules and regulations governed new online schools, and attendance concerns were much more basic: Were students getting computers and could they actually log into the fledgling Electronic Classroom of Tomorrow’s system?”

The Dispatch reporters have tracked the name of the official with the illegible signature: “David Varda, then associate superintendent at the Ohio Department of Education, who signed the odd funding agreement with ECOT in January 2003.”  Varda, who is now quoted as believing that better documentation would help the state oversee ECOT, says the agreement he signed in 2003 was intended to provide “documentation that they (students) were actively engaged.”  The Dispatch adds that some people were concerned back at the time charters were being launched across the state: “Then-state Auditor Jim Petro’s office identified the problem almost immediately: In a special audit of ECOT’s first few months of operation in fall 2000, his office found the school billed the state for thousands of students but could document that only seven logged into the ECOT computer classroom. ECOT was sending a bill for every student who signed up, the investigation found.”

How have all these years passed with ECOT collecting millions of taxpayer dollars?  ECOT founder William Lager is among Ohio’s most generous political contributors. Between 2010 and 2015, Lager gave more than $1.2 million in disclosed campaign donations to legislative Republicans.

The ECOT scandal, along with Ohio’s charter school funding in general, affects Ohio’s public school districts directly. While much of the funding for charter schools comes from the state—the $5,900 state basic per-pupil allocation plus additional weights when students have needs for special education, economic disadvantage, and career tech—the money is not paid to charter schools out of the state budget. When a student leaves for a charter school, the charter reimbursement is directly deducted from the budget of the school district where the student resides (a budget that includes the state and local funding for that school district). After all the formulas and charge-offs have been applied to state funding, students very often carry more to charters from their local district than the original state funding received by the district.

ECOT sucks millions from Ohio’s largest school districts—over $7 million per year from Cleveland’s schools, $11.5 million from Columbus’ schools, and over $3 million from Dayton’s schools, for example. Recent evidence shows that much of this money—which could be supporting the education of children living in poverty is being sent to ECOT for phantom students. This blog has extensively covered ECOT here.

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