After Bill to Eviscerate Ohio State Board of Education Fails in December, Same Bill Is Reintroduced as SB1 in New Legislative Session

The powerful, supermajority Republican Ohio Senate is rushing to attack public education as the 135th Ohio General Assembly convenes this month.

The Statehouse News Bureau‘s Jo Ingles explains: “A bill to take power away from elected members of the Ohio State Board of Education has been reintroduced after falling short in the Ohio General Assembly last year.”  You will remember that the bill the Senate tried to pass at the end of the legislative session was a 2,144 page Senate Bill 178 to disempower the state school board, a bill which then got combined with a bill to ban transgender girls from high school sports and another to ban any requirement by school districts that their students be vaccinated for COVID-19.  The huge package containing SB 178 failed in the last hours of the lame duck session.

Now Senator Bill Reineke has introduced, as Senate Bill 1 in the 135th Ohio General Assembly, the same provisions to hollow out Ohio’s State Board of Education and move most of the State Board’s primary functions into a new cabinet Department of Education and the Workforce under the governor.

State Senator Andy Brenner (R.-Delaware), the Chair of the Ohio Senate Primary and Secondary Education Committee, is the Ohio Legislature’s ex officio, non-voting representative to the Ohio State Board of Education.

Ingles reports that last week Brenner informed members of the Ohio State Board of Education about the bill that has been reintroduced: “(T)he bill is a priority and is the first one to be introduced in that chamber. ‘Senate Bill 1 will put basically the governor in charge.’ Brenner said.”

Ingles explains: “That’s something Ohio governors have wanted for decades but the intensity for advancing a bill to do this was amplified after the November election when three new members, all backed by teachers’ unions, were elected to the board. This bill will create a position, accountable to the governor, that will oversee much of the educational policy now being handled by the state board… Brenner said this bill is needed because the state school board is not effective in some areas.”

Brenner also believes that handing power to the governor would make schools more accountable. Ingles quotes him attacking the State Board of Education because during COVID-19, test scores dropped precipitously in two of Ohio’s school districts serving concentrations of the state’s very poorest children: “I think it is embarrassing when the passage rate in East Cleveland this past year was 2.1% in 8th grade math and low-single-digits in Youngstown—this board should be pounding on the department to get that fixed and those local districts.”

The Plain Dealer’s Laura Hancock describes State Board Member Meryl Johnson’s response to Brenner’s attack on local school districts. Johnson’s state board district has included many of the school districts in metropolitan Cleveland. Meryl Johnson is a very involved, hands-on representative of the school districts she has been serving, and she knows how COVID-19 affected families in her district. Johnson responded to Brenner’s attack on the East Cleveland City Schools by reminding Senator Brenner about something he must somehow have missed or forgotten: the East Cleveland school district was taken over by the state in 2018 (under HB 70), and it has been managed since then under a state appointed Academic Distress Commission. When law makers realized that Academic Distress Commissions had not raised aggregate test scores in any of the five districts taken over by the state, the Legislature created a path for school districts to work their way out of state oversight.  East Cleveland’s plan to work its way out of state oversight was approved a year ago.

At last week’s state board meeting, Meryl Johnson reminded Senator Brenner: “There was a state takeover, academic distress, and we didn’t see that doing a whole lot… I know that in East Cleveland, their teachers work hard. I’ve talked to them. I go in there. So I’m just concerned that you continue to raise that as an example. How would SB 1 help East Cleveland do better?”

Teresa Fedor, just retired at the end of December as a term-limited Democrat who has served in the Ohio Senate and the Ohio House, won a seat on the Ohio State Board of Education in the November election.  Fedor opposes Senate Bill 1 to gut the State Board of Education as an obvious power grab by an out-of-control Republican supermajority in today’s Ohio Legislature.  The Statehouse News‘ Jo Ingles reports: “Fedor opposed the bill then—and she opposes it now.”

Fedor explained her concerns about the new SB 1 to Ingles after Senator Brenner’s presentation last week to the State Board: “This is a ruse to take over public education and hand it over to their friends; then corruption begins… It’s clearly a power grab that will silence the voice of the people and local control… Republicans—we know—can’t be trusted. All we have to do is look at ECOT and 25 years of not funding (public) schools constitutionally… Let’s take a look at the last, I don’t know, 26 years. Who has been in charge? The Republicans. It’s their (state) board. They take direction mainly from the governor. And, in fact, those appointed board members are afraid to make decisions in a bold way because they’ve got to check in with their boss.”

Fedor is an experienced politician; what follows is a quick summary of the political manipulation she watched during her long tenure in the legislature.

The most recent episode is summarized in a December 9, 2022 Plain Dealer editorial: “A curious thing happened on Nov. 8 (2022).  Amid a stampede of Republican victories in Ohio, voters in state education board districts ousted two GOP incumbents in favor of Democrats and elected another Democrat in a contested district previously held by a Republican. While the races were officially nonpartisan, the outcome gave board members who’d campaigned to take culture-war issues off the table at the State Board of Education a much larger voice… In response to this clear expression of voter concern that the State Board of Education needed to refocus on the nuts and bolts of educating Ohio children, a substitute bill gutting the board and transferring most of its key powers to an extensively revamped state education bureaucracy emerged in the Senate Primary and Secondary Education Committee.”

There have been problems in Ohio’s State Board in recent decades after the legislature granted the governor 8 appointed seats out of a state board of 19 members. Most of these problems are themselves the result of political meddling by powerful Ohio Republican leaders. For example, after the State Board passed an anti-racism resolution in 2020, and then in 2021 rescinded it and substituted a bill to ban discussion of divisive topics, Governor DeWine forced the resignation of his appointed members who had voted for the original anti-racism resolution.

Then, as the Plain Dealer‘s editors remind us, “Last January (2022) Gov. Mike DeWine redistricted State Board of Education districts in ways that appeared to target some of the elected board members who’d opposed him on last year’s repeal of the board’s anti-racism resolution. Voters then turned around and elected three new board members who campaigned on returning the board to educational policy pursuits. That expression of the voters’ will shouldn’t have prompted a frontal assault on the State Board of Education itself, supported by Gov. DeWine. But it appears it has.”

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Ohio’s ECOT Mess—Like a Sink Full of Dirty Dishes

Exactly five months ago today, on February 13, 2018, the Ohio Supreme Court heard the final legal appeal by the Electronic Classroom of Tomorrow (ECOT) trying to keep itself in business.

• You may remember that ECOT, perhaps the nation’s largest online charter school—at least according to what we now know were its inflated attendance numbers—had already been shut down (on January 18, 2018) by its sponsor, the Education Service Center of Lake Erie West, and the Ohio Department of Education because it hadn’t enough money to pay its teachers in upcoming months along with what it owed the state.
• And you may remember that the state has been trying to recapture money ECOT had collected in public tax dollars—$80 million overpaid to ECOT for only the two most recent school years after the state strengthened its oversight procedures in 2015— despite that everyone knows ECOT has been cheating the state since its founding in 2001.
• And you may remember that William Lager, ECOT’s founder, has been milking profits out of the nonprofit school via his own two for-profit companies—IQ Innovations that provided the curriculum—and Altair Management that ran the operations.

Here is how the Ohio Supreme Court hearing—five months ago today—concluded, according to the Columbus Dispatch‘s Jim Siegel:  “As ECOT attorney Marion Little finished his arguments for why, under the law, the online school should get full funding for students even if they only log in once a month and do no work, Chief Justice Maureen O’Connor interjected. ‘How is that not absurd?’”

Now, you would think that by now the Ohio Supreme Court could have arrived at a decision on ECOT’s final appeal to stay in business—a case in which lower courts had found against ECOT at every level.  But as citizens of Ohio, we await ECOT’s death without any kind of closure even though we all know that the school has already been shut down—totally. The school’s assets have been sold off in a widely publicized auction and it no longer provides services for students.  The Supreme Court decision matters, because ECOT’s officials hope—if the Supreme Court finds for ECOT—the school wouldn’t be required to repay as many tax dollars and because the same officials say they hope to resurrect the school.

In just the past month, as we await the high court’s decision, and the state remains mired in the ECOT scandal: here are some things we’ve been learning.

For the Associated Press, Kantele Franko reports that 2,300 of ECOT’s supposed students are apparently unaccounted for.  Nobody knows whether they have dropped out or left the state or perhaps re-enrolled someplace else.  Franko explains that a thousand of the students were likely 18 years of age or older, but that 1,300 were school-age youngsters who ought to be considered truant if they are not re-enrolled.  Franko quotes Peggy Lehner, chair of the Ohio Senate Education Committee: “I think this just illustrates the whole problem that we’ve had with ECOT… You not only can’t tell how long the students signed on, you can’t even tell for sure if they even exist, so I am not surprised that there are students that they can’t track.”  So far, however, the Ohio Legislature hasn’t passed any new laws to better regulate attendance at Ohio’s e-schools.

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The Ohio Legislature has taken steps, however, to protect schools where ECOT’s former students are known to have enrolled—giving them safe harbor from stringent oversight because ECOT’s former students were known to be so far behind. The Plain Dealer‘s Patrick O’Donnell reports: “Leaders of both houses said it wouldn’t be fair to punish schools that absorbed the 12,000 students left without a school after budget problems forced ECOT, once Ohio’s largest charter school, to close mid year. The primary beneficiary of ECOT’s closure and of this new law is Ohio Virtual Academy, a for-profit online school that took in 4,000 ECOT students mid-year. That boosted its enrollment more than 40 percent, along with its income and potential profit.  With 12,000 students, the school is now Ohio’s online giant, replacing the mammoth ECOT.”  Ohio Virtual Academy is the state’s affiliate of the notorious K12, Inc., a national, for-profit, online-charter empire.  The legislation to protect schools serving students abandoned when ECOT closed was added quietly as an amendment to another bill just before the Legislature adjourned for summer break, and was opposed by several prominent Democrats. O’Donnell quotes Toledo Representative Teresa Fedor, the ranking Democrat on the House Education Committee: “Children move in and out of schools because of choice every day.  It’s outrageous that Ohio taxpayers have to foot more profits for e-schools and then give them safe harbor.”

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Now the ECOT scandal is creating political trouble for the Ohio State Attorney General Mike DeWine, who has suddenly filed in court to recover money from ECOT’s founder, William Lager under Ohio’s Corrupt Practices Act.  The Dispatch‘s Jim Siegel explains: “ECOT founder Bill Lager could be forced to personally pay back millions of dollars to the state, which plans to go after him for some or all of the $200 million in taxpayer money paid to his for-profit companies. Lager, who went from broke businessman to multimillionaire after opening the state’s largest online charter school, could face claims of breach of fiduciary duty, conflicts of interest in public contracts, and civil claims under Ohio’s Corrupt Practices Act.”

In other words, suddenly the Attorney General has noticed that Lager, who founded and served as an agent for a publicly funded online charter school, had a conflict of interest as he steered contracts to his own for-profit businesses. The Plain Dealer‘s Patrick O’Donnell explains: “Lager, as a legal agent of ECOT, has a fiduciary duty to the school, DeWine and his staff say, which was violated by contracting with companies he owns for key services.”

What everybody wonders is why DeWine, who has been Ohio Attorney General since 2011, only decided to go after ECOT now in the summer of 2018—as he, Ohio’s 2018 Republican candidate for governor, actively campaigns. DeWine claims to have waited until another case set a precedent for cracking down on such conflicts of interest involving a charter school—this time a smaller charter school in Cincinnati. Now, says Mike DeWine, he can be assured that as the State Attorney General he has standing to crack down on charter school fraud.

Clearly, the ECOT scandal has become a hot potato for Republican candidates seeking state office in the November 2018 election.  Democrats across the state, reminding the public of William Lager’s huge political investments in Republican campaigns over the years, are also reminding voters that key Republicans including Mike DeWine—currently attorney general and Ohio’s Republican gubernatorial candidate in November, and Dave Yost—currently state auditor and Ohio’s Republican candidate for attorney general in November, have been ignoring for years Lager’s compromised position as the founder and agent of nonprofit ECOT who is also making huge profits by steering business to his own for-profit contractors.  And, as Patrick O’Donnell explains, Democrats are finding clever ways to use years of sordid Republican support for Lager to undermine DeWine’s bid for Governor.  When ECOT’s assets were auctioned online, the liquidator offered a costume worn by Eddy the Eagle, ECOT’s mascot—a giant Big Bird sort of character sporting an ECOT t-shirt. A still-mysterious purchaser acquired the costume for $153 plus taxes and fees.  Now Eddy the Eagle has been appearing at political rallies—still wearing his ECOT t-shirt, but now carrying a sign that reads, “Ask Me about Mike DeWine.”

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The Akron Beacon-Journal, The Toledo Blade, and the Columbus Dispatch have editorialized against ECOT and Lager this week, noting that while Attorney General Mike DeWine’s court action may seem timed politically to distract voters from the years when Republicans did nothing to crack down on ECOT, it remains a good thing DeWine is taking action, however belatedly. The Dispatch is clearest in defining the importance of DeWine’s recent action. Ohio’s ECOT scandal symbolizes a much larger problem that remains unaddressed by the Ohio legislature:

“Lager might have been among the most brazen, but he’s not the only charter school founder to abuse the process to enrich his companies and himself.  While all Ohio charter schools are by law nonprofit, many, like ECOT, contract with for-profit companies to operate them, and in many cases the for-profit companies are controlled by the founders of the schools. Ohio lawmakers have failed to change charter school law to explicitly ban these clear conflicts of interest. Having a court rule on them would be a welcome push in the right direction.”

Ohio’s Electronic Classroom of Tomorrow Has Its Day in Court; Chief Justice Calls ECOT’s Claim Absurd

After a lengthy legal case in which Ohio’s biggest charter school, the Electronic Classroom of Tomorrow (ECOT) has challenged the Ohio Department of Education’s attempt to crack down on what appears to be ECOT’s outrageous over-reporting of student attendance, ECOT had its final day in court. The Ohio Supreme Court heard ECOT’s appeal yesterday morning.

For about an hour the attorneys for ECOT and for the Ohio Department of Education presented their arguments, and the justices peppered them with questions.  ECOT’s attorney, Marion Little argued that Ohio law requires only that online e-schools document students’ formal enrollment and provide 920 hours of curriculum annually. Whether or not students actually participate in the school’s online education is, according to Little, not covered by Ohio law as a condition for the state’s per pupil funding of the school. Chief Justice Maureen O’Connor expressed skepticism.

Here is the Plain Dealer‘s Patrick O’Donnell on the argument made by the attorney for the Ohio Department of Education: “Department lawyer Douglas Cole repeatedly blasted ECOT’s position that it should be paid for every student enrolled at the school, regardless of how long they spend working on their online classes. ‘The department says that’s an absurd result and the court should be leery about reading that intent (into the law),’ Cole said.”

The Columbus Dispatch‘s Jim Siegel describes the final interchange between ECOT’s attorney and Chief Justice O’Connor:  “As ECOT attorney Marion Little finished his arguments for why, under the law, the online school should get full funding for students even if they only log in once a month and do no work, Chief Justice Maureen O’Connor interjected. ‘How is that not absurd?’ she asked.”

Verification of e-school attendance has become a serious issue in Ohio, particularly for ECOT—Ohio’s largest charter school, which has been collecting tens of millions of tax dollars every year in per-pupil reimbursements. The Plain Dealer‘s Patrick O’Donnell explained in a background piece in Sunday’s Plain Dealer: “ECOT is the biggest charter school in Ohio—bigger than all but 13 school districts in the state—and was once the largest online school in the nation. ECOT received more than $100 million in state tax dollars each year until the recent funding dispute, while drawing students and funding from 95 percent of the school districts in Ohio.  Those include more than 800 from Cleveland, more than 200 from Akron and about 120 from districts like Parma and Elyria.”

In the 2015-16 school year when the state instituted a requirement for more rigorous documentation that students were actually participating in the school’s electronic program, there was a gaping disparity between the number of students ECOT claimed were enrolled and the number of students whose active participation the state could verify.  The Columbus Dispatch‘s Siegel reminds us that, “The department found ECOT was unable to verify about 60 percent of its enrollment for the 2015-16 school year, and more than 18 percent of its enrollment for the 2016-17 year.”

Here are the exact numbers, according to the Plain Dealer’s O’Donnell: “Under the new requirements, ECOT could document class participation of only 6,300 of its 15,300 students for the 2015-16 school year—a 59% gap—leading the state school board to demand that ECOT repay $60 million.  Then again last September, the state found that for the 2016-17 school year, ECOT can properly document about 11,700 of the 14,200 students it claims.”  Based on the disparity in enrollment figures, the state school board last week voted to recover $19.2 million for the 2016-17 school year. For these two school years the state is now trying to recover a total of $80 million.

The Ohio Supreme Court’s decision on ECOT’s appeal is vitally important to ECOT’s founder William Lager and supporters of the school.  The Dispatch‘s  Siegel reminds us: “Electronic Classroom of Tomorrow’s attorneys were literally fighting for the school’s life in front of the Ohio Supreme Court… The state’s largest charter school shut its doors three weeks ago when its sponsor, the Educational Service Center of Lake Erie West, suspended operations because the school was set to run out of money in March… It appears the only way those doors reopen next year is through a favorable Ohio Supreme Court ruling that says the department illegally imposed a retroactive rule change that led to the ECOT owing the state about $80 million for unverified enrollment… The Department of Education in 2016 beefed up its oversight and started requiring online schools to show through log-in durations and offline documentation that students were actually participating in minimum hours of ‘educational opportunities.'”

In an article written on Monday, prior to ECOT’s hearing at the Ohio Supreme Court, the Dispatch‘s Catherine Candisky and Jim Siegel described the history of the case: “(T)he two-year fight between ECOT and the Department of Education has been unusually ugly.  Using television ads (which the state auditor is investigating for possible illegal use of state funds) and media spokesman Neil Clark, a grizzled Statehouse lobbyist, ECOT harshly attacked the department, its leadership, and more recently through an affiliated blog, Gov. John Kasich… Clark accused the department of ‘trying to eliminate school choice in Ohio through illegal actions,’ and he also has accused the courts of playing politics. Publicly, the Department of Education did not swing back much until a few weeks ago, when, in the wake of ECOT’s closure, a spokeswoman said, ‘The department has no confidence that ECOT intends to follow the law… We’re disappointed that ECOT and its for-profit vendors, IQ Innovations and Altair Learning Management, continue to prioritize their monetary gain over the best interests of 12,000 students.’ Since 2000, these companies, run by ECOT founder Bill Lager, have collected about $200 million in state funding.”

A huge issue prior to yesterday’s Supreme Court hearing was whether justices on the Ohio Supreme Court with a potential conflict of interest in the case ought to recuse themselves.  Ohio’s justices are elected and, therefore, depend on political contributions. Justice Terrence O’Donnell, for example, has been closely tied to ECOT and William Lager, ECOT’s founder and the owner of the two for-profit companies that provide ECOT’s curriculum and management. Here is the Plain Dealer‘s editorial, published yesterday to coincide with the Supreme Court’s hearing on the ECOT case: “In 2012, the last time O’Donnell ran for re-election, his campaign received $3,450 from Lager, as well as another $4,450 from employees of Lager’s Altair Management. O’Donnell then agreed after receiving a personal call from Lager, to speak at the 2013 ECOT graduation.”

When the Plain Dealer‘s O’Donnell described the Court proceedings yesterday morning, he confirmed that Justice Terrence O’Donnell’s questioning helped ECOT’s attorney Marion Little by leading Little to lay out ECOT’s justification for its theory of counting student attendance: “Justice Terrence O’Donnell had a different approach in his questions for Little and Cole. One sequence of questions allowed Little to affirm key points of the school’s argument that charter schools were always paid on the number of  students (who enroll without considering their participation) until the state changed its method in 2016.”

I encourage you to watch the archived footage of the February 13, Ohio Supreme Court hearing on ECOT’s case. Having watched the hearing myself, I’ll guess that the decision of the Ohio Supreme Court will fall on the side of Chief Justice Maureen O’Connor’s point that ECOT’s argument is absurd. I am assuming the court majority will decide not to to protect William Lager and his outrageous profits based on charging Ohio’s taxpayers tens of millions of dollars for students who have not really been actively engaging with ECOT’s curriculum despite that the students may have formally enrolled and received a laptop computer.