In Michigan, Out-of-Control Charter Sector Diminishes Equitable Access to Quality Education

Buried in news about the hurricanes, several in-depth articles have explored the emergence, growth and impact of school privatization. There has also been fine reporting on the retreat from school integration and multicultural studies in public schools.  This blog’s four posts this week will highlight important reports that trace how public policy in education has been playing out over time in Detroit and Highland Park, Michigan; in St. Louis, Missouri; in metropolitan Birmingham, Alabama; and in Tucson, Arizona.

Watching her Congressional confirmation hearing, one could sense that Michigan’s Betsy DeVos is unsuitable for the position she now holds as Secretary of Education, but for those willing to learn how absolutely unfit she is to lead the federal department that administers federal policy for the nation’s public schools, Mark Binelli’s NY Times Magazine profile of school privatization in Michigan will provide the details.

In Michigan Gambled on Charter Schools. Its Children Lost, Binelli traces the history of Michigan’s venture into school privatization—the primary players and the intellectual foundation for the movement as it was articulated by the Mackinac Center: “Over the last 30 years, the Mackinac Center, which was founded in 1987 by, among others, John Engler, a Republican state senator, has become a model for state-level conservative policy shops around the country. When Engler was elected governor in 1990, the intellectual foundation of his signature policy issue—education reform—came via a Mackinac Center white paper that pushed school choice as a means of breaking up the ‘bureaucratic monopoly’ of a public-education system smothering risk-taking and entrepreneurial moxie.  The author of the study, Lawrence W. Reed—then the center’s president—argued that it was time ‘to put our faith in the virtues that made America great in all areas where they have been tried: competition, private initiative, and, of course, consumer choice.’  He cited private-school vouchers as a possible model and also gave a nod to an experiment taking place in Minnesota, where they were testing ‘independently run public schools, known as ‘chartered schools.’… Betsy DeVos, a wealthy, deeply religious conservative willing to spend millions of dollars lobbying for a radical redefinition of public education, and her husband, Dick, the heir to the Amway fortune, provided significant financial backing to the Mackinac Center, as well as to pro-charter lobbying groups like Teach Michigan and their own Great Lakes Education Project.”

As governor, John Engler passed a 1994 ballot initiative that was sold as a way to equalize school funding. It would make all districts depend equally on a state per-pupil distribution of sales taxes, though legislators from Detroit’s wealthy suburbs, of course, ensured that school districts could still add local contributions to supplement the state allotment.  When Michigan’s economy sagged and wealthy districts continued to supplement their own budgets with local taxes, the chasm between wealthy and poor districts deepened. Privatization was sold as the remedy.

Binelli covers a maelstrom of problems spinning together— inequality, racial segregation, the economic collapse of Michigan’s poorest cities, deregulation, and the ideological attack on government itself: “Charters continue to be sold in Michigan as a means of unwinding the inequality of a public-school system in which districts across the state, overwhelmingly African-American—Detroit, Highland Park, Benton Harbor, Muskegon Heights, Flint—grapple with steep population declines, towering financial obligations, de-industrialization and the legacy of segregation.  By allowing experimentation, proponents argue, and by breaking the power of teachers’ unions, districts will somehow be able to innovate their way past the crushing underfunding that afflicts majority-minority school districts all around the country.” “Today, all but seven states have some version of a charter law, though few have adopted a model as extreme as Michigan’s. Twenty-one states have a charter cap, 31 require charters to submit annual reports and 33 have statewide authorizing bodies. Michigan, abiding by none of those rules, has allowed 80 percent of its own charters to be operated by for-profit EMOs (Education Management Organizations).  Only 16 percent of charters nationwide are run by for-profit companies.”

Throughout his analysis, Binelli threads the story of Carver Academy, a charter school in Highland Park, a Detroit-area school district turned over by its state-appointed emergency manager in 2012 to the Leona Group, a for-profit EMO: “The state’s solution that year was to ‘charterize’ the entire district: void the teacher’s union contract, fire all employees, and turn control of the schools to a private, for-profit charter operator. But enrollment at Highland Park High (School) continued to decline, so the state closed the school in 2015. Highland Park now has no high school, either public or charter.” (Filling in an important detail, Wikipedia reports that Carver Academy, the school Binelli profiles, left the Leona Group in 2016 and found another authorizer, Bay Mills Community College.)

One of the enormous problems Binelli profiles is Michigan’s problem with myriad, unaccountable charter school authorizers: “Perhaps the most startling feature of Michigan’s system is its lack of centralized oversight. In most of the country, state governments play some role in determining who can open charter schools and monitor their progress. But Engler ceded nearly all control to dozens of groups throughout Michigan—universities and community colleges, as well as existing public school districts.” Highland Park’s George Washington Carver Academy, a PreK-8 charter school that Binelli profiles in depth, is authorized by the Bay Mills Community College (B.M.C.C.), “owned and operated by the Bay Mills Indian Community, an Ojibwa tribe with over 2,000 members and 5.5 square miles of reservation land” along Lake Superior in Michigan’s Upper Peninsula. “In 2003, the tribe started its own K-8 charter, which would offer classes devoted to Ojibwa language and culture. In addition to serving as authorizer for the tribal school, Bay Mills Community College began authorizing other schools around the state. Today, with 42 schools in locations as far-flung as Flint, Benton Harbor and Detroit, B.M.C.C. is the third-largest charter authorizer in Michigan.”

Binelli takes us to the meeting of the review panel where a committee at Bay Mills Community College evaluates several charter schools under its sponsorship—their financial and academic performance—to determine their future.  Bay Mills Community College’s president, Mickey Parish chairs the meeting. Later Parish explains privately to Binelli that there is little incentive for B.M.C.C. ever to close a school: “After the meeting, when I spoke with Parish alone, he acknowledged that the 3 percent fee (paid to authorizers by the state), beyond covering charter-office expenses, ‘does provide a little bit of extra money to help our college activities.'”

Carver Academy is, however, being more carefully investigated, by Oak Ridge Financial, a business that makes its profits by working with Michigan’s financially fragile charters. When Sylvia Brown recently became became Carver’s school principal, not only did she take over the responsibility for improving the academic achievement of Carver’s students, but she also faced the need to keep the school going despite its heavy debt load, which she sought to refinance: “When Brown took over at Carver Academy, one of the many problems she inherited was enormous real estate debt. The problem is not uncommon: Michigan does not mandate that its charter schools buy or lease property at fair-market prices, resulting—predictably—in wildly inflated real estate spending. In Carver’s case, the situation was especially frustrating because the debt was a legacy from yet another for-profit entity… It contracted (in 2000) with a for-profit EMO called Mosaica Education. After only a year of operation, Carver, still run by Mosaica, signed a mortgage agreement to buy and upgrade the school property for $7.1 million—the loan Brown found herself facing 17 years later.” The refinancing partnership with Oak Ridge Financial eventually falls apart, and Brown faces the need to shop around for another financial partner. Binelli describes the financial analysis of Carver Academy’s problems by Scott VanderWerp, who runs Oak Ridge Financial: “Carver’s debt made no sense to VanderWerp: $6.5 million of debt on a building that’s surrounded by public-housing complexes, in a place where 49 percent of people live under the poverty rate. ‘The crime rates are high, there are vacant buildings everywhere… I think you’d readily agree that the building and land isn’t worth $5 or $6 million. Quite candidly, it’s probably worth $500,000 or $600,000.’  He said charters often entered bad deals because authorizers and school boards, which must approve loans, lacked a basic understanding of bond finance.” Binelli adds, describing another serious charter school real estate problem, in many cases charter school management companies themselves acquire buildings, remodel them cheaply as school facilities, and then charge outrageous rents to the very schools they themselves manage, a clear conflict of interest.

Please read Mark Binelli’s fine report: Michigan Gambled on Charter Schools. Its Children Lost. It is impossible adequately to summarize Binelli’s nuanced analysis of the public crisis that has derived from Michigan’s ideologically driven experiment with privatization. Due to the school district’s size and the sheer number of charter schools, Detroit has become the epicenter of Michigan’s charter school problem. Binelli explains: “Last year, State Senator Geoff Hansen, a Republican from the tiny city of Hart, tried to rein things in. Setting his sights on Detroit, Hansen sponsored a bipartisan bill that would have increased oversight of charters in the city, creating a seven-member Detroit Education Commission with mayoral appointees and a mandate to determine where new charter schools could open and whether existing schools would expand or be closed. The bill passed the Senate with the support of Gov. Rick Snyder, a Republican, and Detroit’s Democratic mayor, Mike Duggan, but it was derailed in the 11th hour by Republicans in the… (House)—thanks in large part, to the lobbying efforts of the DeVos family, which, The Detroit Free Press reports, showered the state Republican Party with ‘near-unprecedented amounts of money’ during the campaign cycle.”

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“Don’t It Always Seem to Go that You Don’t Know What You’ve Got Till It’s Gone?”

“You don’t know what you’ve got till its gone.”  Joni Mitchell was prophetic when she sang those words back in 1970.

Back then, for example, if you drove across the Indiana Turnpike, you’d stop at the James Whitcomb Riley, Booth Tarkington, or Ernie Pyle rest stop. Plain, basic concrete buildings, but also racks of maps, clean restrooms, something to eat and some sense of the heritage of Indiana. All gone today: Indiana’s turnpike—under Governors Mitch Daniels and Mike Pence—has been turned over to an Australian investment consortium that pledged improvements at low cost. Now you can stop at gas station-style convenience stores with 47 kinds of potato chips and some beef jerky. Someone flips hamburgers at a tiny grill and there are five or six tables crowded together where you can sit if there’s room. Dirty, minimal restrooms. Although the old places had fallen into disrepair, today’s version is a reduction, a diminishment.

The late political philosopher Benjamin Barber reflects on the implications for all of us of the reduction of government’s role and the kind of privatization of public services represented by the Indiana Turnpike: “There is today a disastrous confusion between the moderate and mostly well-founded claim that flexibly regulated markets remain the most efficient instruments of economic productivity and wealth accumulation, and the zany, overblown claim that naked, wholly unregulated markets are the sole means by which we can produce and fairly distribute everything human beings care about, from durable goods to spiritual values, from capital investment to social justice, from profitability to sustainable environments, from private wealth to the essential commonweal. This second claim has moved profit-mongering privateers to insist that goods as diverse and obviously public as education, culture, penology, full employment, social welfare, and ecological equilibrium be handed over to the profit sector for arbitration and disposal. It has also persuaded them to see in privatization not merely a paring knife to trim the fat from overindulgent state bureaucracies but a cleaver with which democracy can be chopped into pieces and then pulverized.” (Jihad vs. McWorld, p. 239)

What is the appropriate role of government—the role the libertarians seek to erase?  Here are political scientists Jacob Hacker and Paul Pierson: “Why does it take a lot of government to get and keep prosperity?… Effective government makes prosperity possible. It can do so because government has unique capacities—to enforce compliance, to constrain or encourage action, to protect citizens from private predation—that allow it to overcome problems that markets can’t solve on their own… Economists use the term ‘market failure’ to describe many of these problems….  Many important goods in a society are ‘public goods’: They must be provided to everyone or no one… The second big case of failure—and it is really big—involves markets that produce large effects on people who are neither buyers nor sellers. Economists call these external effects, well, ‘externalities.’… When externalities are present, market prices will not reflect the true social costs (or benefits) associated with private transactions.” (American Amnesia, pp.73)

Today with 25 all-conservative, all-Republican statehouses—House, Senate and Governor, all-Republican—along with a Congress seriously considering the budgetary and health care proposals of the libertarian, Tea-Party, House Freedom Caucus—it is becoming clear what reducing government will mean and evident that the consequences will be far more serious than the lack of aesthetics, literary history, and comfort at the new convenience store, rest-stops on the Indiana Turnpike.

The Flint water crisis, which began in 2014—and nobody told Flint’s residents about until 2016—was America’s wake-up alarm. For a long time Michigan has been governing its poorest municipalities and school districts with austerity budget management instead of addressing the needs of the citizens. Michigan’s governor has the right to appoint a fiscal manager who can override elected officials and even abrogate union contracts; there are no checks and balances.  In Flint, Michigan’s appointed emergency fiscal manager, Darnell Earley, approved a plan to save money by taking water out of the Flint River instead of buying already treated water from Detroit. Chemicals to prevent release of lead from old, corroded pipes were not added to the water when Flint began taking water from the river; the pipes corroded all over town; and the children in Flint tested positive for lead poisoning on an epidemic scale. Emergency fiscal managers were first authorized by state law in Michigan in 1988. After voters overturned the emergency manager law by referendum in the November 2012 election, the lame-duck, all-Republican legislature came back in the middle of the night with a tougher law that was referendum-proof. The 2012 law supposedly limits the tenure of austerity-budget emergency managers, but Governor Rick Snyder has found a way to extend austerity management long-term. Curt Guyette, an investigative reporter for the ACLU of Michigan explains: “(T)he managers were given extreme unchecked authority… (T)hey were given the ability to come in, clean up the problems and get out. And so there was an 18-month time limit put on their terms. Except that this governor is exploiting what amounts to a loophole in that law… (T)hese emergency managers serve for 17 months and 29 days, and the day before their term expires, they resign. A new emergency manager is put in place, and the clock starts ticking all over again. And they just shuffle them from one place to another.”  Hands-off, no-regulation-government let down the children of Flint.

Then just a month ago, on June 14, another alarm went off in Britain, which has also been experimenting since the Thatcher era with austerity along with libertarian thinking.  NY Times reporters explain: “Residents of Grenfell Tower had complained for years that the 24-story public housing block invited catastrophe. It lacked fire alarms, sprinklers and a fire escape. It had only a single staircase. And there were concerns about a new aluminum facade that was supposed to improve the building—but was now whisking the flames skyward… The facade, installed last year at Grenfell Tower, in panels known as cladding and sold as Reynobond PE, consisted of two sheets of aluminum that sandwich a combustible core of polyethylene… (B)y 1998, regulators in the United States… began requiring real-world simulations to test any materials to be used in buildings taller than a firefighter’s two-story ladder… Business-friendly governments in Britain—first under Labor and then under the Conservatives—campaigned to pare back regulations. A 2005 law known as the Regulatory Reform (Fire Safety) Order ended a requirement for government inspectors to certify that buildings had met fire codes, and shifted instead to a system of self-policing. Governments adopted slogans calling for the elimination of at least one regulation for each new one that was imposed, and the authorities in charge of fire safety took this to heart.”

The third example, of course, is Kansas Governor Sam Brownback’s experiment to prove that tax slashing will grow the state economy. It didn’t, and last month outraged constituents finally forced their elected representatives to raise taxes.  But the damage can’t be overcome so easily.  Here is Justin Miller in a fine analysis for The American Prospect: “What Brownback’s tax cuts have accomplished is to have created a crisis of catastrophic proportions for state residents. The tax cuts blew an immediate hole in the $6 billion state budget, as revenue levels fell an astounding $713 million from fiscal year 2013 to 2014…. Brownback has also allowed a long-standing public school shortage to metastasize into a full-blown constitutional crisis… More than half the state’s general fund is dedicated to funding K-12 public education… In 2006, Kansas settled a lawsuit with school districts and committed to significant increases in funding over a three-year period. The state did increase funding, but when the Great Recession hit, then-Governor Mark Parkinson, a Democrat, made deep cuts to the education budget.  The cuts were supposed to be temporary, but upon taking office in 2011, Brownback opted for his tax cuts rather than restoring the schools’ funding.  Between 2008 and 2013, state school funding fell by 16.5 percent when adjusted for inflation. In 2015, Brownback cut $28 million more from the state K-12 education budget. A month later, he signed legislation that scrapped the state’s long-held school financing formula, substituting a block-grant system that essentially locked in those cuts for the following two years… The failure to restore pre-recession funding has disproportionately impacted urban school districts like Kansas City’s and Wichita’s.”

In a recent short analysis for the Economic Policy Institute, Does Corporate America See a Future in the United States?, economist Gordon Lafer explains that the new fiscal austerity and removal of government regulation in the U.S. is the result of a lobbying assault that promotes intentional reduction of government as a check and balance on business: “President Trump’s budget proposal follows the playbook that corporate lobbyists have long pushed in state legislatures: tax cuts for companies and the rich, coupled with dramatic cuts to services that benefit everyone… In recent years, states and localities across the country have made drastic cuts to essential public services…  Budget cuts were particularly devastating in the country’s school systems. In 2010, the national student-teacher ratio increased for the first time since the Great Depression; and seven years after the onset of the Great Recession, most states had still not restored per-pupil spending to pre-recession levels. Most striking about these cuts: the legislators who enacted them and the business lobbies that championed them treated them not as temporary tragedies to be repaired when revenues bounced back, but as long-desired permanent cuts to public services. Indeed, many legislatures locked in poorer tax bases by enacting new tax giveaways to corporations and the rich while slashing funding for schools, libraries, and health care. In the same year that Ohio ended full-day kindergarten, legislators phased out the state’s inheritance tax—which had only ever affected the wealthiest seven percent of families.”

Lafer continues: “This agenda was driven by the country’s premier corporate lobbies: chambers of commerce, manufacturers associations, the Koch brothers’ Americans for Prosperity, and the Fortune 500 companies that have participated in the American Legislative Exchange Council (ALEC)… Given this reality, we take this corporate-backed push for disinvestment of America’s public sector as a big, loud early warning signal. ALEC’s agenda is not that of employers committed to their surrounding communities. It more resembles that of a company planning to cut and run. For the rest of us who seek good jobs and future opportunity for ourselves and our children, what’s good for GM is good for GM, period.”

For years and years, Betsy DeVos, the new Secretary of Education, has been directly implicated in this agenda in her home state of Michigan. She and her family founded, funded, and have worked actively with the Great Lakes Education Project, a libertarian lobbying outfit that has led the effort to block increased oversight of the out of control, for-profit charter school sector that has threatened the Detroit Public Schools. When, now that she is the U.S. Secretary of Education, Betsy DeVos demands that school accountability be defined as a parent’s right to choose a different school if things are not going well, she is promoting her libertarian bias for lack of government regulation, lack of democratic oversight, and lack of public transparency.  Her mantra is the expansion of vouchers to drive public tax dollars away from the public system that is required to serve all children and protect their rights.

Most of us take our local public schools—overseen and carefully regulated by government to protect the investment of tax dollars and the rights of our children—so much for granted that it is difficult for us to imagine that Betsy DeVos and her libertarian friends at ALEC, the Great Lakes Education Project and Americans for Prosperity can invest enough billions of lobbying dollars to destroy public education. But we ought to pay attention. “You don’t know what you’ve got till it’s gone!”

DeVos Family Contributes Lavishly to Legislators Who Defeated Detroit Charter School Oversight

I grew up in Montana, where in Montana history class we learned that at one time Anaconda Copper owned the state legislature. While the patrons have changed over the decades, the political process hasn’t been cleaned up. Amazingly the extraction industry has been replaced by the education sector these days in a number of states. On Tuesday this blog covered the investments being made in Ohio to block the regulation of the notorious online charter schools. Today the subject is Michigan and the massive payoffs this summer by Dick and Betsy DeVos, the Grand Rapids couple who made their fortune in Amway. Dick and Betsy DeVos have been investing heavily this summer to ensure that Detroit’s for-profit charter operators won’t be regulated.

Stephen Henderson, editorial page editor of the Detroit Free Press, explains: “There’s nothing more difficult than proving quid pro quos in politics, the instances in which favor is returned for specific monetary support. But look at the amounts involved, and consider the DeVos’ near sole interest in the issue of school choice. It’s a fool’s errand to imagine a world in which the family’s deep pockets haven’t skewed the school debate to the favor of their highly financed lobby.”  The Great Lakes Education Project is the Michigan pro-charter school lobby underwritten by the DeVos family, who also launched All Children Matter in the spring of 2003 to promote private school vouchers. Dick and Betsy DeVos later founded the American Federation for Children, which has, according to ThinkProgress, worked with its closely related PAC to serve “as a launching pad for school choice legislation across the country.”

You’ll remember that earlier this summer the state legislature in Michigan passed a bill to prevent the bankruptcy of the Detroit Public Schools, but at the last minute the legislature removed the Detroit Education Commission, an agency that had been designed to regulate an out-of-control, for-profit charter school sector and to oversee, for example, the siting of schools to ensure that the needs of children instead of the marketing plans of charter chains determine where schools are opened and closed. Even Governor Rick Snyder had approved the creation of the Detroit Education Commission, but the Michigan House removed it suddenly in a late night session. (This blog has covered the Detroit Public Schools and charter school expansion in Detroit here.)

Henderson explains what happened: “Bought and paid for. Back in June, that’s how I described the Detroit school legislation that passed in Lansing—a filthy, moneyed kiss to the charter school industry at the expense of the kids who’ve been victimized by those schools’ unaccountable inconsistency… The DeVos family, owners of the largest charter lobbying organization, has showered Michigan Republican candidates and organizations with impressive and near-unprecedented amounts of money this campaign cycle: $1.45 million in June and July alone—over a seven-week period, an average of $25,000 a day.”

Here are the details according to Henderson: “Back in March, the Senate voted to place charter schools under the same authority as public schools in the city for quality control and attention to population need and balance…. But when the bills moved to the state House, lawmakers gutted that provision, returning a bill to the Senate that preserved the free-for-all charter environment that has locked Detroit in an educational morass for two decades. After less than a week of debate, the Senate caved.”

Why did the legislature capitulate to the wishes of Dick and Betsy DeVos?  “Five days later, several members of the DeVos family made the maximum allowable contributions to the Michigan Republican Party, a total of roughly $180,000. The next day, DeVos family members made another $475,000 in contributions to the party. It was the beginning of a spending spree that would swell to $1.45 million in contributions to the party and to individual candidates by the end of July….”

Henderson defines what ought to be the goal of education in contrast to what has become the mission of charter school supporters in Michigan: “Education should always be about children. But in Michigan, children’s education has been squandered in the name of a reform ‘experiment,’ driven by ideologies that put faith in markets alone, as the best arbiters of quality, and so heavily financed by donors like the DeVos clan that nearly no other voices get heard in the educational conversation.”

While Michigan is unique in the power of the Grand Rapids DeVos family, the welfare of children in many states is threatened by the power of charter school money. Henderson concludes: “The polite term for this kind of reflexive giving is transactional politics; it is the way things work not just in Lansing but in Washington, and in political circles in all 50 states.”

Rapid Charter Expansion Is Primary Cause of Detroit Schools’ Fiscal Catastrophe

Here is how David Arnsen of Michigan State University and his colleagues frame one of the issues they investigate in a new study on the impact of rapid growth of charters on the fiscal conditions in school districts in the state of Michigan.  The study will be published this autumn in the Journal of Education Finance:  “Thus far, the state has appointed emergency managers in three school districts (Detroit, Muskegon Heights, Highland Park), has dissolved two school districts (Inkster and Saginaw Buena Vista) and established consent decrees in one (Pontiac)… All except Inkster experienced large declines in enrollment between 2002 and 2012.  Compared to districts statewide, all six of these districts experienced much higher loss of resident students to charter schools and higher shares of special education students.”

The researchers conclude: “(T)he deficit districts in which the state intervened were significantly different from deficit districts in which it did not intervene on each of the demographic characteristics examined.  They had significantly higher shares of African American students (86% versus 40%), and significantly higher shares of low-income students (85% versus 67%).  Districts in which the state intervened also had significantly higher charter penetration (29% versus 11%) of resident students.”

The authors caution that their findings about Michigan may not perfectly apply in other states due to Michigan’s method of funding schools.  Michigan reformed its school funding in 1994 to shift funding responsibility primarily to the state; most states instead  balance state and local responsibility for raising revenue.  And Michigan’s system allows students transferring to a charter or to another school district through inter-district public school choice to carry all of their financing with them. However, due to fixed costs and laws that protect services for particular students, school districts are unable quickly to achieve economies of scale to compensate for declining enrollment.

Even when emergency managers have imposed austerity by raising class sizes and eliminating elective courses, Michigan’s most vulnerable school districts have, due to school choice, faced financial ruin.  The near bankruptcy of the Detroit Public Schools, for example, has occurred during years’ of state imposed austerity by a succession of emergency fiscal managers: “(T)he grounds for this emergency intervention under state law are strictly financial.  State policy presumes that local district fiscal distress is caused by local officials’ poor decision-making and management…. Our findings, however, indicate that state school finance and choice policies significantly contribute to the financial problems of Michigan’s most hard-pressed districts.  Most of the explained variation in district fund balances is due to changes in districts’ state funding, enrollment changes including those associated with school choice policies, and special education students whose required services are inadequately reimbursed by the state.”

Jennifer Berkshire interviewed David Arnsen, the report’s lead author, and the interview was reprinted on Friday by Valerie Strauss in the Washington Post.  In the interview Arnsen very concisely explains the results of the new research study: “We saw very significant and large impacts of charter penetration on district fund balances for different thresholds, whether there were 15, 20, or 25 percent of the students going to charter schools. That was really striking. At every one of those thresholds, the higher the charter penetration, the higher the adverse impact on district finances.  They’re big jumps, and they’re all very significant statistically.  What’s clear is that when the percentage gets up to the neighborhood of 20 percent or so, these are sizeable adverse impacts on district finances.” “We have districts getting into extreme fiscal distress because they’re losing revenue so fast.”  The report examines the budgets of school districts in “central cities statewide and their foundation revenue, which is both a function of per-pupil funding and enrollment.  They had lost about 22 percent of their funding over a decade.  If you put that in inflation adjusted terms, it means that they had lost 46 percent of their revenue in a span of 10 years… The emergency managers…. had all the authority and they cut programs and salaries, but they couldn’t balance the budgets in Detroit and elsewhere, because it wasn’t about local decision making, it was about state policy.  And when they made those cuts, more kids left and took their state funding with them.”

In the interview, Arnsen explains further:  “The law presumes that financial problems in these districts are caused by poor decision making of local officials, and this justifies their displacement through emergency management.  Yet our findings suggest that state school finance and choice policies were in large part responsible for the underlying financial problems.”

Arnsen’s study documents what many have suspected: the rapid growth of charter schools is itself a factor destabilizing so-called “portfolio school districts” which are conceptualized as school marketplaces managed like a business portfolio in which new schools are opened and so-called “failing” schools are shut down in a constant cycle of churn.  Arnsen concludes his interview with Berkshire: “A place like Detroit is just chaotic. It’s the foremost example nationally of the adverse consequences of a poorly regulated education market… Our charter sector in Michigan is unusual nationally in the extent to which the schools are run by for-profit management companies… (W)e have a situation in Michigan where the charter interests are very influential in the state legislature.  It makes it much harder in this state to reach consensus not only on coherent choice and finance policies, but also on policy relating to all sorts of education issues….”

In other words, in a state where far-right Dick DeVos and his Great Lakes Education Project along with owners of the for-profit charters are actively buying political influence, it is very difficult to get the legislature to regulate what is an out of control charter school marketplace.

In Michigan Politics Children Are Mere Afterthought

In Detroit last week the Michigan House of Representatives passed a plan that, if it can be reconciled with another plan enacted earlier by the Michigan Senate, will ensure that all the teachers will be paid for their work during the current school year.  But the House scheme comes at enormous cost to the future of the school district.  And Speaker of the Michigan House, Kevin Cotter, made a point—rhetorically and legislatively—of attacking Detroit’s school teachers as though they are somehow at fault here.

The Michigan Senate had already passed a much earlier proposal from Michigan Governor Rick Snyder to create a long-term arrangement for addressing the financial crisis (that, ironically, has rapidly grown in Detroit during the tenure since 2009 of a series of state-appointed fiscal managers). Last week, after leading the Michigan House of Representatives to delay action on Snyder’s and the Senate’s plan, House Speaker Cotter blamed Detroit’s school teachers because, banned by law from striking, they have organized sickouts to protest filthy conditions, disrepair of buildings, and the current Emergency Manager’s announcement last week that teachers would likely not receive all of their pay for the current school year.

Here is how House Speaker Cotter described the problem the House was expected to address: “The Detroit Federation of Teachers is once again putting the wants of adults ahead of the needs of children, specifically the 40,000 Detroit schoolchildren who were left out in the rain this morning.  At an absolutely critical time for a city on the path to recovery, Detroit’s next generation has now lost more than 1,000,000 instruction hours they will never recover to cheap political stunts.  These egotistical teachers have lashed out at the children who rely on them and accomplished nothing but disrupting their students’ education.  Their selfish and misguided plea for attention only makes it harder for us to enact a rescue plan and makes it harder for Detroit’s youngest residents to get ahead and build a future for themselves.”

It is very clear that Cotter is trying to deflect criticism from his own failed leadership and the failure to act by his legislative colleagues.  He also neglects to mention powerful political contributors who have been pushing anti-public school policy in the Michigan legislature for years now.  Among the most powerful of those political supporters is the Great Lakes Education Project, described by Chad Livengood and Jonathan Oosting of the Detroit News Lansing Bureau as, “a pro-charter group backed by the powerful DeVos family of west Michigan.”  The Senate, in a plan passed earlier, had included a Detroit Education Commission intended to stop runaway charter expansion and ensure some oversight, but the House plan passed after an all-night negotiating session late last week, leaves out the Detroit Education Commission.  Livengood and Oosting quote Gary Naeyaert, Executive Director of the Great Lakes Education Project, who lobbied against the creation of a Detroit Education Commission because, he says, it would favor traditional public schools over charters: “The proposal requires the DEC to serve the interest of the traditional district above charters….” What a radical notion: that the state charged in its constitution with providing a system of public education would favor public education.

Media Matters provides some background about the political investments of Michigan’s DeVos family: “The private foundation of Amway heir Dick DeVos and his wife, Betsy, members of the ‘ultra-rich, ultra-conservative,’ Koch-allied DeVos family, focuses its philanthropy on right-wing causes under the umbrellas of ‘education,’ ‘community,’ ‘arts,’ ‘justice,’ and ‘leadership.’ Betsy DeVos is also the co-founder and current chair of the boards at the anti-teachers-union state advocacy groups Alliance for School Choice and American Federation for Children (AFC) and a close friend of teachers union opponent Campbell Brown, who also serves on AFC’s board. DeVos also sits on the board of the Foundation for Excellence in Education. Through the DeVos Family Foundation, the DeVoses have given millions to anti-teachers union and pro-privatization education groups; recent tax filings show donations to the Alliance for School Choice, the American Enterprise Institute, the Black Alliance for Educational Options, the Foundation for Excellence in Education, the Heritage Foundation, the Hispanic Council for Reform and Educational Options, and the Institute for Justice.”

Besides the omission of a commission to regulate the explosive growth in Detroit of for-profit charter schools, the plan passed by the Michigan House slashes the amount of money that Republican leaders in the Senate and Governor Rick Snyder himself agree is necessary to underwrite a plan that will make the Detroit Public Schools viable.  The Snyder-Senate plan was for the state to invest $715 million over 10 years to pay off debts and give the District a new start; the House reduces that to $500 million. The House Plan also includes a lot of the kind of school turnaround strategies that have proven ineffective under federal programs like No Child Left Behind and Race to the Top.  A clear focus also seems to be retribution against the Detroit Federation of Teachers.  Early press coverage said that all administrators and teachers would have to reapply for their jobs, though more recent articles (here and here)  explain that only administrators and principals would have to reapply.  The plan would nullify current labor contracts.  Teachers and administrators would be paid by performance.  Unlike other school districts across Michigan, the Detroit district would be permitted to hire non-certified teachers.  Teachers unions would be prohibited from negotiating the school calendar and work schedules.

After intense negotiations last week, Detroit’s teachers went back to work when they were assured in a letter from Emergency Manager Steven Rhodes that all teachers would be paid for their work during this school year. However, it was later reported that, “The assurance that Detroit teachers will receive paychecks over the summer is based on Steven Rhodes’ confidence that lawmakers will pass reform legislation and not because of an influx of new money…. Rhodes wrote a letter Tuesday that said all teachers are ‘legally entitled to be paid in full’ for their work, and assures that DPS ‘will honor that legal obligation.’  Ivy Bailey, the interim president of the Detroit Federation of Teachers, said she views the letter as a legally binding document the union can take to court to force teachers to be paid if, in fact, the legislation doesn’t pass.”

What is very clear is that the financial catastrophe in the Detroit Public Schools is a long way from being resolved.  It is also clear that the mess is not the fault of the school teachers who continue, despite untenable conditions in their schools, to serve the community’s children.  It is also clear that anti-government, anti-public school forces led by Dick and Betsy DeVos are involved in trying to drive legislators to promote charters and undermine public schools.  And it is clear that for too many politicians in Michigan’s House of Representatives, the 40,000 students enrolled in Detroit’s public schools are merely an afterthought.