Do Charter Schools and Private School Vouchers Save Money?

School Choice proponents believe that the competition of “free market” education—through charter and on-line schools, home schooling, and vouchers/tax credits that use public money to pay private school tuition—will result in a better education system at less cost than can be obtained through traditional public schools.

It is hard to track charter school and voucher spending because they are not subject to the same strict transparency rules as public schools. However, after two decades of experimenting with taxpayer-funded choice, there is mounting evidence that these “free-market” solutions neither save taxpayers money nor provide a superior educational experience or result. Whether from fraud, abuse, or lack of oversight, the school choice sector is bleeding money.  

·        By 2015 the federal government had spent more than $3.7 billion promoting charter schools, some of which never opened. For example:

o   In 2011 and 2012, $3.7 million in federal taxpayer money was awarded to 25 charter schools in Michigan that never opened.

o   In Ohio $4 million federal taxpayer dollars went to 15 charter schools that closed within a few years and 7 that never opened.

o   In California $4.7 million was awarded to charters that closed within a few years.

o   In 2016, despite lack of oversight in the charter sector, the federal government spent another $333 million to promote charter schools.

·        Many charter schools spend exorbitant amounts of money on administration and contracted services.

o   In 2014-15 Arizona charter schools spent $128 million more than Arizona public schools on administration. There are 666 public school districts in Arizona serving 1,089,384 students. By contrast, 556 Arizona charter schools serve just 186,900 students.

o   New Jersey charter schools spend $1,000 more per pupil on administration than public schools do.

o   A study in Pennsylvania found that charter schools spend twice as much on administration as traditional public schools.

·        Vouchers drain state tax dollars, taking money away from other needed services without providing a proven benefit.

o   In 2016 Indiana spent $131.5 million on taxpayer funded vouchers, despite a 2015 study that found students who transferred to a private school from public school dropped from the 50^th to the 26^th percentile in math and experienced no improvement in reading.

o   In Louisiana, 7,500 New Orleans voucher lottery winners were awarded $5,311 to attend participating private schools, for a total of more than 37.5 million spent in taxpayer dollars. A 2015 study found that after a year of attending the private school, students’ scores dropped 24 percentile points in math and 13 percentile points in reading.

o   A Fordham University study of a large-scale voucher program in Ohio found that students who used vouchers to attend private schools fared worse academically than their closely matched peers attending public schools, with the negative effects greater in math than in language arts.

In some states public charter schools are funded with taxpayer dollars that carry some oversight. However, the bottom line is that, with billions of dollars of both public and private money going to support various types of “school choice,” the result is generally that lack of transparency makes the funding hard to track, most studies show a negative effect on achievement, and the sector is riddled with waste, abuse, and outright fraud.

Information for this article was taken from the Washington Post, the Center for the Media and Democracy, the Brookings Institution, the Education Research Alliance for New Orleans and the Fordham Institute.

Education for Sale at Your Local Charter Store

Most open-enrollment charter schools claim to be public schools. While it is true that these charters are publicly funded, they are privately operated, and if you dig deep enough into their inner workings, you will find that most are run for somebody’s profit.

Unlike public schools, which are run by democratically elected school board members, charter schools are usually run by an appointed or self-appointed board that is accountable only to itself, or by a for-profit company. In fact, the charter school/education management organization (EMO)/charter management organization (CMO) sector is one of the fastest growing cash cows in the investment industry.

It is no accident that profit is at the center of the charter school industry.  In an article tracing the roots of  the school privatization movement, the Detroit Free Press explained, “The charter school lobby is driven, not by research or data, but by an ideology that says every government function would be improved by applying ‘free-market’ principles.” In 2015, the Walton Foundation sponsored a symposium on investing in charter schools where investors were told: “It [the charter school sector] is a very stable business, very recession resistant…the industry is growing about 12-14% a year.” The speaker emphasized that the investor cannot lose, because “…the state is the payer on this category,” with tax breaks up to 39% for an added incentive.

Here’s how it works:

·        Charter schools run outright by for-profit company (EMO or CMO)

o   The state pays on a per-pupil basis for the schooling. In some states, local public school districts are forced to pay as well. The EMO/CMO supplies the curriculum, administrative functions, textbooks, desks, computers, and buildings.

o   With little regulation of charter schools, the EMO or CMO is free to charge whatever it wants in “administrative costs,” and many charter operators get rich on this alone. A national study found that charter schools spend on average $774 more per pupil per year on administration and $1,141 less on instruction than traditional public schools. One charter school owner in Washington, D.C., was paid $14 million over 10 years.

o   One third of all charters close within 10 years. According to NCES data, 2,500 charter schools closed between 2000 and 2013.  When the charter school shuts down, the materials, equipment, and buildings paid for with public money remain the property of the charter owner.

·        Charter schools run by appointed or self-appointed nonprofit board

o   The state pays on a per-pupil basis for the schooling. In some states, local public school districts are forced to pay as well. The state may make available extra funds for building facilities and the federal government may kick in some “planning grant” moneys. Then there are generous donations by school-choice “philanthropists” (i.e., school privatization activists) such as the Walton Family Foundation, the Eli Broad Foundation, the DeVos Foundation, the Gates Foundation, and others.

o   These charters often contract with EMO’s or CMO’s for administrative services, curriculum, materials, and a variety of other services. They are free to pay administrators more and teachers less and are unhindered by fair employment practices. A quick internet search will reveal multiple instances of fraud and abuse such as kickbacks, overcharging the state for equipment and materials, claiming students who never enrolled or enrolled and never showed up, and writing fraudulent grant proposals, to name a few.

·        Virtual, or on-line, charter schools

o   The on-line charter school receives the same support per pupil from the state as the traditional brick-and-mortar public school but has none of the expense of building and maintaining facilities, providing transportation or extracurricular activities, or running high expense programs like special education.

o   The Arkansas Virtual Academy, for example, in 2016-17 received $10.7 million in state funding and paid out $7.8 million to a national management company in Herndon, Virginia, called K-12. K-12 paid its top five executives more than $12 million in 2015 and spent more than $20 million in 2012 on ads to attract students and funding. Meanwhile, a Stanford University study found that on average virtual school students lose 42 days of reading instruction and 180 days of math instruction per year. Only profit could excuse this kind of ineffectiveness.

Charter schools may claim to be public schools, but the only thing public about them is the way they are funded. They are not publicly governed nor accountable to the public, their students and parents, or their employees. They do, however, turn over a lot of money that goes into someone’s pockets.

Information for this article was taken from Network for Public Education, Business Insider, Detroit Free Press, Huffington Post, Center for the Media and Democracy, and Arkansas Times.

Voucher bill backed by Trump administration takes aim at military children's schools

President Trump and his Education Secretary Betsy DeVos have made no secret of their contempt for traditional public schools. Both Trump and DeVos are wealthy products of private schools. In his 2018 budget, Trump and DeVos, a billionaire activist whose experience with education consists solely of years of funding alternatives to public schools, proposed a $250 million national private school voucher program.

Fortunately, Congress was quick to nix the voucher program. Still, Trump and DeVos seemingly will leave no stone unturned in their efforts to privatize education. First, the new tax bill overhauled so-called 529 Savings Plans, converting them from a tax-protected college savings plan to a money-laundering scheme to grant large tax breaks to parents who send their children to private schools. Arkansas lawmakers fell for that one recently, when they passed their own 529 tax break that exempts up to $10,000 annually per child for private school tuition.

Now Rep. Jim Banks (R-IN) has introduced a bill (H.R.5199) to repurpose money that supports Department of Defense schools overseas and traditional public schools that serve children of military families in the U.S. into a voucher program to be used for private school tuition, on-line learning, home school supplies, tutoring, computer hardware and software, and a number of other "educational" purposes. The bill specifies that the funds can only be used for students who are not attending a traditional public school.

DeVos has been pitching such a bill to military families for at least a year. In an April 2017 visit to Fort Bragg, North Carolina, DeVos told parents the Trump administration wanted to provide vouchers so that military families could send their children to "any school they want."

"Not so fast!" says a coalition of more than 25 organizations representing more than 5.5 million active and former members of the U.S. Military. In a letter to House leaders, the coalition claimed that the voucher program would divert vital revenue that goes to school districts that serve military children, "critically compromising the quality of education they could provide to military children and their civilian classmates."

Of nearly 600,000 school age military children, more than 80 per cent attend public schools in their local communities. The proposed voucher program would be paid for by diverting Impact Aid, which offsets the cost of educating military children for local school districts that receive no property tax revenue from federal lands, such as military bases. 

Furthermore, the advocacy group noted that it would be counter-productive to defund Impact Aid in order to provide a minimal benefit ($2,500 to most children) to the small minority of military children who would qualify for the program. According to data from the National Center for Education Statistics, the average annual cost of private high school tuition in the U.S. is $13,030, a far cry from the $2,500-$4,500 tuition voucher the bill would provide.

The idea of private school vouchers for military-connected children has been getting pushback from those affected since DeVos first started talking up the idea. In response to her support for a similar bill to H.R.5199 in 2017, the National Association of Federally Impacted Schools (NAFIS) and the Military Impacted Schools Association issued a joint statement saying that military families want more investment in public schools, not vouchers, claiming that such legislation "would set back education for military-connected students, period."

Citing the Military Interstate Children's Compact that has been adopted by all 50 states and Washington, D.C., that addresses challenges military families encounter with enrollment, placement, attendance, eligibility and graduation, the director of NAFIS noted that "supporting military families and the unique needs of military-connected children is a top priority for public school districts and states." She further noted that "the Compact only applies to public schools."

Research into school voucher programs generally has found little to no evidence of improved academic performance in voucher schools. In fact, studies of voucher programs in Indiana and Louisiana have shown that voucher students scored significantly lower in math and reading than students attending the states' public schools. 

An ABC News poll of all likely voters found that 40 per cent support and 55 per cent oppose government funded private school vouchers. When asked if they would support vouchers even if it meant less money would go to public schools, the support fell to 23 per cent in favor of vouchers with 70 per cent against. 

In the face of this overwhelming lack of support and evidence of ineffectiveness of voucher programs, it will be interesting to see if Congress passes Rep. Banks' voucher bill. If they do, it will be one more example of ideology, not science or the will of the people, driving education policy in Washington.

Arkansas is not and never will be Oklahoma...UNLESS....

Both Arkansas and Oklahoma are deep red states. They have similar conservative majorities in their Legislature and their Constitutional offices. Both states have poverty rates of about 17%. Both states have traditionally ranked low in many education measures, including student achievement and teacher pay.

However, there is one major reason why Arkansas is not in the same boat as Oklahoma, with its drastically reduced spending on education, bottom of the ladder teacher pay, overcrowded classrooms, and pared down curriculum.

That is Arkansas' Lake View school funding lawsuit, in which the Lake View School District maintained that the state's apportioning of resources among public schools was neither equitable (citing large disparities in teacher pay, school facilities, and educational opportunities between the economically distressed areas of the state and prosperous, growing regions like Northwest Arkansas) nor adequate (the state did not invest enough money in education to fund equitable opportunities and an "adequate" education). In November 2002 the state Supreme Court ruled that the Arkansas Constitution requires the state to fund its public schools both equitably and adequately. The court ordered the Legislature to rectify the deficiencies in the state's public education system.

Thus, in 2003 and 2004 the Arkansas Legislature undertook a number of education reforms to address both equity and adequacy. Many of the reforms were based on an Adequacy Study conducted by an outside consultant to determine what constituted an "adequate" education.

To address equity, the Legislature established a state minimum teacher salary schedule that brought districts closer together in teacher pay while not entirely eliminating disparities. They adopted a state-wide curriculum requirement of 38 base credits that every high school must teach. They added funding for students in poverty and English Language Learners. Between 2004 and 2006, the state invested $60 million in the Arkansas Better Chance pre-K program.

The Legislature commissioned a Facilities Study and put policies and procedures in place to ensure that every school district would have equitable and adequate facilities. Schools were indexed by financial ability, with the state subsidizing costs of repair and construction of school facilities on a sliding scale based on need. From 2003 to 2007 the state invested more than $1 billion in public school facilities.

A pre-Lake View law that established a Uniform Rate of Tax (URT) helped in achieving equity by capturing the first 25 mills of property tax in every district and redistributing the funds to all the districts through the school funding formula. In this way, some of the disparity of opportunity was eliminated by making school districts in economically depressed areas beneficiaries of property tax collections in more prosperous areas.

Post-Lake View, the Legislature passed a law that requires education to be funded first, before any other function of state government. A Joint Adequacy Committee studies the educational needs of the public school system and makes a recommendation before each regular session of the Legislature for funding public education in the next biennium. By law, the recommendation must be based on what the districts need, not available funding.

The first year after the Lake View reforms, state spending jumped 12%. Now, 18 years later, 44% of state tax dollars are dedicated to public education. Half of school funding comes from the state, with 40% generated locally and 10% coming from the federal government. As a result of the influx of funding and reform of standards, in 2012 Arkansas had one of the fastest-improving education systems in the U.S.

As long as the Arkansas Legislature remains true to its commitment to public education, Arkansas will never see the kinds of stresses placed on its schools that Oklahoma is now experiencing.

However, each year that passes post-Lake View sees seemingly less commitment to honoring the recommendations of the Adequacy Committee. As the Legislature grows more fiscally conservative, legislators are less inclined to recommend funding that really meets the school districts' needs and less likely to grant the full recommended increase in funding. Once again, teacher salaries are stagnant, and the disparities are growing between the most prosperous and least prosperous districts.

The facilities fund remains perennially low, and does not adequately meet the needs of poorer districts for repair and construction of buildings. The school privatization lobby also threatens funding for traditional public schools, as some legislators are dedicated to introducing free-market "reforms" such as private school vouchers and financial perks for charter schools.

Drastic tax cuts such as those seen in nearby states like Oklahoma and Kansas could also reduce state revenues to the point where the quality of all government functions, including education, is affected.

Arkansas has made great strides in reforming its public school system since 2002. But the Lake View reforms were just a start. We can't rest on past accomplishments but must continue to invest in an education system that will provide every child with a 21st century education.

What recent 529 legislation says about the Arkansas Legislature

Last week in special session, the Republican-led Legislature speedily approved changes to Arkansas law to grant a tax break to people who send their children to private school, proving that they care more about their fanatical devotion to "free market" education than to their constitutionally mandated duty to "ever maintain a general, suitable, and efficient system of free public schools" (Arkansas Constitution, emphasis added).

The private school need not meet any standards. You may send your kids to one of the prestigious Little Rock academies where, they say, 100% of their graduates go on to college, or you may send them to a small church school in rural Arkansas with 11 students and not one certified teacher, or any of the range of possibilities in between.

These schools may not have student diversity, offer a challenging curriculum, boast highly qualified teachers, provide enrichment or extracurricular activities, or serve special needs children. Despite this roundabout subsidy from the state, these schools are not required to take or pass any tests, provide adequate facilities, or show student progress. Under the new law if you send your children to a private school, good or bad, you will be eligible to write off up to $10,000 of income for each child, potentially saving yourself $2,000-$3,000 in taxes.

How did this happen? Arkansas lawmakers were aligning Arkansas tax code to recent changes in the federal tax code with respect to so-called 529 Savings Plans.

These 529 Savings Plans were created in 1996 as an incentive for people to save for their children's college education. As created, an individual could set up an account and put as much as $14,000 a year in it tax-free, with no penalty unless the money was withdrawn early or for some purpose other than the beneficiary's qualified post-secondary education. The idea was that over an 18-year period, a family could save up enough for college at most four-year institutions.

However, as part of the Trump administration's drive to elevate "school choice" and the "free-market competition" model for education, in the January 2018 tax code overhaul 529 plans were given a new purpose and much broader scope.

Now instead of being a college savings instrument, 529 plans can be a means of funneling K-12 private school tuition costs through an account that makes them tax-free. Where before an early withdrawal meant paying income tax and penalties on the deposits, now the funds can be deposited and withdrawn after only 30 days (or sooner if allowed by the three-person regulating committee), with the deposited amount--up to $10,000--being deducted from the account holder's adjusted gross income, therefore, non-taxable.

It is worth observing here that not all legislators were eager to endorse this "tax break for the wealthy," as some have called it. Many resisted through several votes on the measure at the end of the fiscal session before giving in to the bill sponsors' persuasions that they "must align Arkansas tax policy to federal tax policy." This is clearly a fallacious argument, however, as there are numerous instances where Arkansas tax policy differs from federal tax policy. One example is the Earned Income Tax Credit, which is available for the working poor at the federal level but not at the state level.

Governor Asa Hutchinson supported the measure while expressing mild reservations about its effect on future state revenues.

The 529 bill (or Act 8 of the Second Extraordinary Session of the 91st General Assembly), being purely a tax break for families that send their children to private schools, is not by any means as pernicious as the hard-fought SB746 from last year's regular legislative session, which ultimately failed. That bill set up tax-free "education savings accounts" that were eligible for use in K-12 private schools, virtual schools, and home schooling. It even included extra incentives for moving students from public schools to private schools. Some lawmakers have vowed to bring this bill back in the 2019 session, making Act 8 just the "foot in the door" to eventually achieving a full-out voucher system.

So why are the new 529 accounts bad for Arkansas and what do they say about the Arkansas Legislature?

1. While not qualifying as a true voucher program, the director of advancement of a prestigious private school admits that "it's an option that mostly affects affluent families" (cnbc.com). It's not a benefit that would be available to the nearly 24% of Arkansas children who are below poverty level.

2. It is expected to cost more than $5 million in state revenue in just the first year, in addition to setting up additional bureaucracy to run the program.

3. They turn what has been a savings program into what looks like a glorified money laundering scheme to create large chunks of tax-free income for wealthy families.

4. They promote and validate unregulated private-school choices that may not be serving children well. Some legislators never met a "choice" they didn't like except the state's highly regulated and accountable public education system.

5. Act 8 shows that the Republican-led Legislature, which since they became the majority in 2013 have been increasingly reluctant to fund public education to the level deemed necessary by its own Joint Adequacy Committee, will bend over backwards to encourage any kind of "choice," including tax breaks for private school tuition, virtually removing the cap on charter schools, reassigning supposedly "unused or underused" public school facilities to charter schools, and funding the state's virtual charter school at the same level as brick and mortar schools.

6. The Legislature has money to give tax breaks for private school tuition but none for additional pre-K slots, teacher raises or affordable health care for teachers, or full funding for the special education catastrophic fund. They have established and generously added to charter school facilities funding while the public school facilities fund is woefully underfunded, even though public schools are held to a high standard that makes building new facilities very expensive.

The new 529 legislation is not the worst thing that could have happened to public education in Arkansas, but it is a sign that many Arkansas lawmakers are willing to follow the lead of ideologues who would like to change our education system from a highly accountable public model that serves all children with adequacy and equity as its guide to an entrepreneurial model where the "free market" decides winners and losers. All too often in such a case, the entrepreneurs win and the kids--and eventually the taxpayers--
lose.

VIRTUALly Unchained

One fast-growing sector of the charter school movement is online "virtual" schools. Many students enroll in these schools to complete their entire program of study online. Other traditional students may take just one or two classes to augment their usual school curriculum.

Arkansas' main on-line charter school is the Arkansas Virtual Academy.  Last spring the state's Charter Authorizing Panel approved the Arkansas Virtual Academy to add 1,000 students, making it eligible to enroll 3,000 students in the 2017-18 school year.

On-line learning... That should be a good thing... We all like our digital devices, right? Except....

According to the Arkansas Times, the Arkansas Virtual Academy "has been unable for months to provide a consistent and accurate enrollment count" and scores below state averages on achievement tests at nearly every grade level.

In fact, StartClass, an education research group that evaluates schools across the country, rated the Arkansas Virtual Academy at a 4 on a scale of 10, where the average score for U.S. schools is 6. StartClass notes that the AVA's student-teacher ratio is 34:1 compared to traditional Arkansas schools' 14:1. Student performance is markedly lower in the Arkansas Virtual Academy, with students scoring a 17% pass rate in math compared to 27% for students in more traditional settings. The English Language Arts score was somewhat more equal with the AVA students scoring 30% passing compared to 32% from students in the rest of the state.

Yet the Arkansas Virtual Academy does just fine financially. It gets more than $6,000 in state dollars per student (the same amount as traditional public schools), meaning it will get $6 million more per year with its higher enrollment cap. This in spite of the fact that, as the Arkansas Times points out, "it has no gyms, band rooms, cafeterias, bus systems, or faculty commensurate with those of brick-and-mortar school districts."

The Arkansas Virtual Academy gets much of its academic programming and infrastructure from an out-of-state private, for-profit corporation. According to financial reports, the Arkansas Virtual Academy paid $7.8 million of its $10.7 million in annual state revenue to its "third-party management agent," K12, of Herndon, VA.

Almost 90% of K12's income comes from state and federal tax dollars, and the company has been criticized by watchdog groups and its own stockholders for "lamentable academic performance" while paying its executives multi-millions of dollars. Its top five executives received more than $12 million in compensation in 2015. Another criticism of K12 is that it spends millions of taxpayer dollars lobbying state and federal governments for (you guessed it) more access to students and more funding. K12 no longer discloses its advertising budget, but in 2012 it spent $20 million on ads to attract students, funding, perks, and favors.

Despite being the darling of school choice advocates, on-line charter schools like Arkansas Virtual Academy get poor ratings from education researchers who study such things. A report from Stanford University's Center for Research of Education Outcomes found that online charters do a very poor job of educating children. In general, students in online charters lose 42 days of reading instruction a year and 180 days of math instruction. (There are only 180 days of instruction in most public school years.)

According to Education Week, a study of Colorado's online charter school revealed that just 24% of students use the learning software each day. A program called "FAST and Furious" allows students to earn a year's worth of credit for a week of work. The school's leader helped direct millions of taxpayer dollars to his own for-profit management company. Unfortunately, this type of behavior is not atypical of online charter schools.

If it were a traditional public school, the Arkansas Virtual Academy would be under strict scrutiny--and probably sanctions--by the Arkansas Department of Education for poor test scores and slip-shod financial management. As a charter school, however, it is largely exempt from rules that govern traditional schools and allowed to go its own way, even rewarded with state permission to increase its enrollment.

Unqualified to Serve

The Detroit Free Press has just written a piece on the DeVos family's funding of failed school choice experiments in the Detroit area. You can find the whole article here .

Some revealing quotes from the article indicate....

.... that the charter school lobby is driven, not by research or data, but by an ideology that says every government function would be improved by applying "free-market" principles:  "This deeply dysfunctional educational landscape [in Detroit] — where failure is rewarded with opportunities for expansion and "choice" means the opposite for tens of thousands of children — is no accident. It was created by an ideological lobby that has zealously championed free-market education reform for decades, with little regard for the outcome." 

.... that while traditional public schools are held to ever higher standards, charter schools are given a pass on performance: "On the west side, another charter school, Hope Academy, has been serving the community around Grand River and Livernois for 20 years. Its test scores have been among the lowest in the state throughout those two decades; in 2013 the school ranked in the first percentile, the absolute bottom for academic performance. Two years later, its charter was renewed."

.... that ultra-rich pro-privatization advocates like the DeVos family use their wealth to buy legislative actions that undermine traditional public schools and grease the wheels for proliferation of unaccountable charters: "The DeVoses have helped private interests commandeer public money that was intended to fulfill the state's mandate to provide compulsory education. The family started the Great Lakes Education Project, whose political action committee does the most prolific and aggressive lobbying for charter schools. Betsy DeVos and other family members have given more than $2 million to the PAC since 2001. GLEP has spent that money essentially buying policy outcomes that have helped Michigan's charter industry grow while shielding it from accountability.This summer, the DeVos family contributed $1.45 million over two months — an astounding average of $25,000 a day — to Michigan GOP lawmakers and the state party after the Republican-led Legislature derailed a bipartisan provision that would have provided more charter school oversight in Detroit."

....that the choice of Betsy DeVos for Secretary of Education is not only inappropriate because of her ties to the privatization lobby, but illogical, given the fact that she has never been an educator nor acquired any credentials that would qualify her to hold the position: "DeVos isn’t an educator, or an education leader. She’s not an expert in pedagogy or curriculum or school governance. In fact, she has no relevant credentials or experience for a job setting standards and guiding dollars for the nation’s public schools."

Everyone who reads this should contact their Senators and ask them to vote against DeVos' confirmation as Education Secretary. And Republicans who are endorsing her, shame on you for the double standard of claiming to be for "good government" while blindly accepting the nomination of an unqualified lobbyist for privatization for the position of overseeing the federal government's involvement in the nation's public schools.