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Will bad news lead to charter school reform?
SCOTT PIEPHO
Cases and Controversies
Published: October 2, 2015
An episode of The West Wing aired in 2000 featured a scene in which office smart guy Sam Seabourn debates a young Republican woman named Ainsley Hayes on a cable political talk show. Ainsley points out that the administration opposed a Republican education bill because it allowed local control of the money, concluding that the president “doesn't work for the students, and he doesn't work for the parents of the students -- he works for the teachers' union.”
This scene nicely distilled the conservative critique of public education at the time: That it was an unwieldly bureaucracy too often run to the benefit of stakeholder groups – the organizations of employees and other actors, especially teachers’ unions.
School choice – vouchers and charter schools – were touted as a solution. By harnessing the properties of the free market regulate to education a system of school choice would eliminate the ability of stakeholder groups to lobby the government to steer benefits their way.
It is hard to find better evidence that school choice failed to fulfill that promise than the Ohio Supreme Court’s decision in Hope Academy Broadway Campus v. White Hat Management. The opinion resolves one issue in sprawling ongoing litigation over the relationships between charter schools and for-profit management companies (called “operators” under state law) like White Hat.
Each of the 10 schools who are plaintiffs in the Hope Academy litigation signed contracts with White Hat or one of its subsidiaries under which the school passed along 95 or 96 percent of its funding to the operator which in exchange would secure space, hire and fire staff, purchase furniture and equipment and perform other management functions.
When the schools terminated their relationships with White Hat companies, the operators invoked a contract provision stating that they retained title to any personal property (furniture, equipment and so forth) purchased for the schools. If the schools wanted it, they needed to pay for it. Again.
All but one of the justices found that the contract’s terms allowed White Hat to retain title over the property, but both the majority and two of the dissents also include strong criticisms of the contract and by implication the system that produced it. As Justice Judith Ann Lanzinger writes for the majority, “The notion that the schools would knowingly transfer their funds to White Hat for White Hat to purchase the property for itself (and then later require the schools to buy the property back with additional public funds) does not seem supportable but was an agreed-upon term.”
Contracting with a management company to provide purchasing services where the money for purchase passes through the operator to buy stuff and pay a fee for service might be a good contract if the fees are reasonable. Likewise a contract to rent equipment from an operator might be a good idea if it makes fiscal sense. But handing all revenue over to a for-profit company and imposing on that company only the lightest contractual duties with no meaningful fiscal oversight by the board is a terrible contract.
A charter school board might sign such a contract because board members are often recruited by management companies. Another reason is a little known provision in charter school law that allows a management company to appeal a charter school board’s decision to either terminate or refuse to renew a contract, and have the board dismissed if the sponsor finds that the operator fulfilled the terms of the previous contract.
The Hope Academy opinion continued a line of bad news for charter school proponents: reports calling out Ohio’s as one of the worst systems in the country, the scandal of state charter school official David Hansen fudging data to make charter performance better, and a series of newspaper exposés about shoddy schools and dodgy data, among others.
It is becoming ever clearer that rather than getting rid of a system that prioritized stakeholder groups over students, we have created a parallel system with new stakeholders that care far less about educating students.
Happily the charter school reform bill currently before the General Assembly repeals the operator appeal provision. The bill, which has been making its way through the statehouse in fits and starts, offers a number of other meaningful reforms, though many charter school critics charge that it does not go far enough in regulating operators. In addition, proponents are still concerned about lobbying efforts to water it down.
But the accumulated bad news at least offer the prospect of reform. As it stands, state charter school policy does not serve students or parents of students; it serves charter school operators.