Rodin Museum in Philadelphia. ID’d by Krystal Bonsall.
It seems hardly a day goes by without some headline involving Epic Charter Schools and related misdeeds. I don’t intend to repeat what has been reported because I assume if you found your way to this post you are enough of a public education nerd to already be familiar with the still unfolding story. If you want an up-to-date refresher my friend Rick Cobb has recent posts on his site https://okeducationtruths.wordpress.com/ that are a good summary and source. Instead, I want to describe the legislative and policy failure that set the stage for Epic’s headlines.
That failure of policy and legislation begins with the woeful lack of understanding about how our state aid formula is supposed to work and the purpose of providing a free public education to all children. Article 13, Section 1, of the Oklahoma Constitution states: “The Legislature shall establish and maintain a system of free public schools wherein all the children of the State may be educated.” That single statement commits our state government to provide services that are the largest single category of expenditure by far of state and local revenues in Oklahoma, now totaling over six billion dollars.
Title 70, Section 10-105, Oklahoma’s truancy law, makes it a crime for parents not to send their children to school. They “may be educated” in an Oklahoma public school, or not, but they must be educated somewhere. The provision of a system of free public schools open to all children is for the benefit of the children and society; it is not an entitlement for parents. I pay more taxes for public schools in Oklahoma than does the average parent. I do so gladly and willingly because I know that the future strength and stability of our great nation depends on having a well-educated population—it is in my selfish interest to have all children educated. I do not do so in support of parents who may, or may not, be making good choices for their children. I do so in support of the professional educators whose mission it is to effectively educate our state’s children. I expect my state government to spend my money wisely and effectively to finance the actual costs of educating the state’s children, not as some kind of entitlement for their parents or boondoggle for a private for-profit company.
Gary Stanislawski was my state senator. He became that when reelected in 2012 after Tom Adelson was gerrymandered out of his district following the 2010 census. Linda and I hosted him at our house one evening in 2013 to meet with some of his new mid-town Tulsa constituents while he was sponsor of the virtual charter school legislation that is responsible for the Epic mess. I asked him then why they didn’t make provision for soliciting bids or requests for proposals from prospective virtual education providers instead of just paying the same amount per student as a brick and mortar charter school would receive.
It was like a Venus and Mars conversation. In my school district CFO mind, also schooled in how state aid formulas are supposed to work by starting with the bottom-line cost to educate a child, we shouldn’t just gift the same amount of money for what is clearly a very different service. A brick and mortar charter school is not only responsible for each child’s education, but also for their physical safety and well-being while in attendance. I served as general counsel for more than a decade for two of Tulsa’s charter schools; they worked hard and were quite frugal. A virtual charter school does not have the same responsibility so why should we simply assume the two, very different, kinds of educational services will cost the same amount?
Stanislawski, on the other hand, probably just took the state aid formula amount as a given and each child’s, if not each parent’s, entitlement. In other words, the price/cost was already established so why is Watts even questioning that? Let’s unpack where I’m coming from.
Oklahoma finances public education through a combination of state and local revenues that mostly come together through our state aid formula. I’ve posted extensively about this before. Here is a recent description from the research paper “Understanding the Impact of the Five Lagging Chargeables in Oklahoma’s State Aid Formula and Policy Implications”:
Oklahoma’s formula follows the structure of what is known as a “foundation program”. The Education Resources Information Center of the Institute of Education Sciences defines foundation programs as:
Systems whereby state funds are used to supplement local or intermediate school district funds for elementary and secondary education — a ‘minimum foundation’ of financial support is usually guaranteed regardless of the local district’s ability to support education. ( “Foundation Programs.” Education Resources Information Center. Accessed August 6, 2020. https://eric.ed.gov/?qt=foundation+program&ti=Foundation+Programs)
Another source, The Economics and Financing of Education (Johns, Roe L, and Edgar L Morphet. The Economics and Financing of Education: A Systems Approach. 2nd ed. Englewood Cliffs, NJ: Prentice-Hall, 1969), credits development of the foundation program to researchers George D. Strayer and Robert Murray Haig as modified by Paul R. Mort, which is described as consisting of these three steps:
- Compute the cost of the foundation, or guaranteed, program for each district on the basis of objective measures of educational need.
- Deduct from the cost of that program the amount that will be available in the district from a required levy on the equalized valuation.
- Make the difference available to the district from state funds.
Lastly, the Oklahoma Supreme Court said this about Oklahoma’s formula in Fair School Finance Council, Inc. v. State, 1987 OK 114, “The Foundation Program consists of a certain amount of money per pupil which the Legislature has determined to be necessary to operate a minimum program within a school district.”
Establishing a foundation program therefore challenges a state legislature that is committed to providing comparably funded public education services for all the state’s students to do three things. First, determine the cost to each school district for providing the basic education services to its students which will necessarily vary according to the numbers and characteristics of those enrolled. Second, determine the amount of revenue each district is expected to receive from sources that are outside of the current legislative appropriation process. Third, subtract the second amount from the first, and pay the difference as state aid to school districts from general state revenues available for appropriation in the current year.
The epic policy failure that is at the heart of all the Epic drama we are experiencing therefore lies with our legislature having failed to properly perform the first step when it enabled full time virtual instruction. The main culprit I believe was SB 1816 sponsored by then Senator Stanislawski. The Act amended the Charter Schools Act to provide a mechanism for the State Board of Education, later moved to the Statewide Virtual Charter Board, to sponsor a statewide virtual charter school, which then led to the inception of Epic as a statewide charter school. I won’t go into what are details about which I’m not fully informed and which are irrelevant to my argument, such as Epic’s precise history, its uniqueness, its previous and current sponsors and much more. What I’m concerned with is that the Charter Schools Act, as amended, in allowing for virtual charter schools made no distinction in funding for a virtual charter school versus a traditional brick and mortar charter school.
The current “certain amount of money per pupil which the Legislature has determined to be necessary to operate a minimum program within a school district” is $3,380.89. However, the Legislature has long recognized that each pupil does not cost the same amount to educate. Depending on grade level and other characteristics, weights are applied to account for these cost differences. I show this in more detail in my post Follow the Money, part 2. An example would be that a fifth grade student, no other countable characteristics, would be weighted at 1.0 and the district should receive $3,380.89 to offset the cost of the student’s education. But, a kindergarten student (1.5), who is visually handicapped (3.8), bilingual (.25), and economically disadvantaged (.25) would be weighted at 5.8 and the district should receive $19,609.16 for the cost of the student’s education.
The members of the Task Force 2000 whose 1990 Report led to the landmark Oklahoma legislation known as House Bill 1017 well understood the importance of this first step in a foundation program formula. They recommended, and the final legislation included, a requirement that the State Board of Education review pupil category and grade level weights using the cost accounting system and make recommendations a year later for any revisions. In other words, determine if the weights in place in fact reflect the actual costs of educating the students in those categories.
Here are just the grade-level weights now in place:
When I was CFO at Sand Springs we were planning for construction of eight new classrooms for early childhood education serving about 160 four-year-olds. I did a pro forma budget with costs of hiring certified and support staff necessary to meet class size requirements for the new site, estimated utilities, insurance, building and grounds maintenance, etc. to come up with our estimated cost. We wanted to know if our existing budget/K-12 program would be subsidizing this new, but optional, service. The result was uncanny how close the estimated costs were to what the increase in state aid (note the 1.3 weight above) and other revenues would be with the additional students. In other words, the state aid formula worked and the right amount of money was going to be available to pay for the actual costs of educating the new students.
When the weights were put in place the only delivery of educational services to students was at traditional brick and mortar schools. The weightings clearly take into consideration the class size requirements at younger ages and perhaps greater expenses delivering some high school classes. There are also expenses for the brick and mortar, transportation, health and other services in-person schools are expected to provide.
Now along comes virtual education which is both praised and condemned for its radically different method for delivering educational services to students. Why would we assume the cost of that delivery will be the same as the traditional in-person school? Maybe it is, but probably it isn’t. I haven’t studied it, though someone should have BEFORE writing or sponsoring SB 1816 and opening up the public’s purse to pay exactly the same amount for a service that is radically different.
I know that the cost isn’t the same because even a casual reading of the Epic silliness demonstrates money is being wasted. The entrepreneurs who started and run the charter school were given a no-bid contract and have paid themselves millions. There was enough money left over from the Oklahoma services to transfer lots of money to Epic’s California venture. Teachers are paid huge bonuses, collectively millions, not for teaching, but for recruiting students. The spending money families are given may be legitimate support of students’ education, or may cross the line to be payments to parents for enrolling, and is suspected of being another conduit for siphoning off profits to the owners. This kind of silliness doesn’t happen unless the revenue Epic receives simply far exceeds what is needed to educate its students.
A Gary Stanislawski might say that I should chill out because parents must be satisfied because they choose to send their children there and each year more are doing so. But I say parents are not the consumers—all of us are and we should not be paying more than the actual cost of the services being provided to the students. We also get a say in whether or not Epic is doing a good job. If that should be left up to parents alone, then why do we need truancy laws?
This all takes us back to Step One: determine the cost to a school district or charter school for providing the basic education services to its students through a virtual delivery system rather than in-person. Then use that information to establish an appropriate Grade Level weight. Here’s my guess, uneducated, that it would be about 70% of what it costs in-person. If Epic had received only 70% of the funding that has been shoveled their way the last few years, I bet we wouldn’t be reading the same headlines.
Today, April 16, 2021 we awake to yet another headline about Epic which reports an additional fine of $10.5 million levied by the State Department of Education because Epic has been found to have misspent those additional sums. The total fines so far are about $22 million. As I try to explain above, in addition to holding Epic accountable, policymakers need to correct the underlying cause of these crazy expenditures, namely that the very different educational services Epic purports to provide students do not cost, and are not worth, the same amount of funding required by traditional brick and mortar schools. The actual, reasonable costs of quality virtual education should be determined and an appropriate student weight used in the formula.
As always, lunch/pizza delivery on me for the first to ID the location of the Thinker photo above.
Loving the way you tell it like it is!
Philly 🙂