Follow the money

Indiana could see a push to stash state money in school choice ‘savings accounts’

PHOTO: Shaina Cavazos

A plan that would allow families direct access to their child’s state education dollars to use for school-related expenses could be gaining traction in Indiana.

Two bills proposed in the Indiana General Assembly last year would’ve set up “education savings accounts” — focused on K-12 and unrelated to 529 college savings plans — that would create what some education reform advocates call “universal school choice.” The proposal would direct state money not through school channels, but deposit it into an account parents could freely access.

Supporters of the idea argue it provides more options to families to choose how to best educate their children. But critics of the savings accounts say they could divert even more money away from public schools and come with few regulations to protect against fraud and ensure families are spending the money according to the law.

The idea is becoming more popular in states with Republican-controlled legislatures.

Similar programs have passed state legislatures or are already operating in Tennessee, Florida, Arizona, Mississippi and Nevada. So far, Arizona’s and Nevada’s programs are the most expansive, applying to more than just students with special needs.

The American Legislative Exchange Council, a conservative nonprofit lobbying group that pairs legislators and business owners together to write model legislation, highlighted the education savings accounts in their yearly summer conference, held in Indianapolis last week.

ALEC, strongly opposed by teachers unions and school choice critics, has considerable influence in Indiana, with several key lawmakers participating in the group and elements of the group’s model laws inspiring some of Indiana’s education reforms in recent years.

The group also admires and has sought to promote Indiana’s legislative work on education, even naming its model legislation for school choice programs the “Indiana Education Reform Package.”

Neither Indiana bills was actively considered last year, but Sen. Dennis Kruse, R-Auburn, and Rep. Bob Behning, R-Indianapolis, who serve as chairmen of the Senate and House education committees, said earlier this year that they were open to the ideas in the future. Indiana lawmakers must write a new budget in 2017. Legislation dealing with state funding is much more likely to be heard and move forward in budget years.

“It’s something we need to talk about,” Behning told Chalkbeat in January. “It’s worthy to look at options. It wouldn’t change the landscape significantly because we already have a lot of choice, it’s just the way we distribute it a little differently.”

It’s true that Indiana has lots of school choice options now. About 30,000 students use public money to pay private school tuition through the voucher program, and more than 37,000 attended public charter schools.

But the plans proposed by lawmakers last year could allow for more state education dollars to be controlled directly by parents than under the voucher or charter school systems. The bills also would make families with higher incomes eligible to direct their state education dollars somewhere other than their local public schools. In 2016-17, the base per-student aid each school district will receive is $5,088.

Joel Hand, with the Indiana Coalition for Public Education, said the programs are too unregulated and pose a threat to taxpayers and public schools.

“There’s nothing there to protect the taxpayer that their tax dollars are really going to be used for that intended purpose,” Hand said at an ICPE presentation earlier this summer. “All these things would work to drain significant funds from public schools.”

Sen. Jeff Raatz, R-Richmond earlier this year pushed a bill that was never considered by lawmakers in Senate Bill 397, which would’ve only allowed families with students who have special needs to participate in an education savings account program. That bill would not have limited the family income of participants.

House Bill 1311, which was authored by Rep. Tim Brown, R-Crawfordsville, but also was never considered, would’ve set up a much more expansive program with similarities to a model bill crafted by ALEC. It would have allowed all families to sign up to receive between 70 and 100 percent of the basic state aid amount set aside for each child’s public education if they earn no more than $97,000 for a family of four.

That is much more, for example, than what families can receive through Indiana’s private school tuition voucher program.

Under the voucher program, a family of four making less than $44,863 per year can receive up to 90 percent of the funding that their local public district would receive from the state. A family earning up to $89,725 per year is eligible for half the state aid their district would receive.

The House bill would’ve allowed families to spend the state money on private school tuition but also on lots of other things, such as curricular materials, exam fees (for Advanced Placement and other tests), services for students with disabilities or even college tuition. The flexibility would be a particular boon to families who homeschool their children.

Hand and his colleague at ICPE, Vic Smith, said the idea for K-12 education savings accounts would lead to too large an expansion of the state’s voucher program and divert too much funding from existing public schools risk wasting tax money without proper oversight.

“This work to bring us vouchers over the past several years has warmed us up for this,” Smith said. “We think that’s just going down the wrong road.”

Achievement School District

Here’s why another state-run charter school is closing in Memphis

PHOTO: Caroline Bauman
GRAD Academy students work on a writing assignment during an African-American history class. The South Memphis charter school will shutter this summer.

The high cost of busing students from across Memphis to maintain the enrollment of GRAD Academy was a major factor in a national charter network’s decision to close the state-run high school.

Project GRAD USA announced plans last week to shutter its only Memphis school after four years as part of Tennessee’s Achievement School District. Besides high transportation costs, the burden of maintaining an older school building and a dip in enrollment created an unsustainable situation, charter organization officials said this week.

“Higher-than-projected transportation and facilities costs were major contributors to the operational challenges that GRAD Academy encountered,” CEO Daryl Ogden told Chalkbeat.

GRAD Academy will become the third state-run charter school to close in Memphis since the ASD began operating schools in the city in 2012. KIPP Memphis and Gestalt Community Schools closed one school each last year, citing low enrollment and rising operational costs.

This is the first school year that GRAD Academy didn’t meet its enrollment targets, according to Ogden. The high school started the school year with 468 students, a drop of about 13 percent from the 2016-17 year.

Ogden said enrollment constraints significantly hurt the operator’s ability to recruit students to the South Memphis school.

Unlike most ASD schools, GRAD Academy started from scratch. It was not an existing low-performing school taken from the local district and assigned to a charter operator with the charge of turning it around. As a “new start,” the high school could only recruit students zoned to other state-run schools or the lowest-performing “priority schools” in Shelby County Schools.

Most of the ASD’s 31 remaining schools were takeovers and are allowed to recruit up to 25 percent of their student bodies from non-priority schools. (Now, a 2017 state law prohibits the ASD from creating new schools.)

GRAD Academy was not required to provide cross-city transportation but, because the school did not have a neighborhood zone, chose to as a way to build enrollment.

“Students were coming from all over Memphis, since there is not a zoned area around the school, and that began to be a challenge with attracting students,” said Kathleen Airhart, the ASD’s interim superintendent. “Their transportation costs were much higher than their counterparts in the ASD.”

Airhart said the State Department of Education has been working closely with GRAD Academy since becoming aware of its financial issues last October. She noted concern over whether the school had the funds to stay open through May, and the state worked with administrators to reduce expenses and streamline funding.

PHOTO: Chalkbeat Tennessee
GRAD Academy rented and maintained the building that formerly housed  South Side High School, originally built for 2,000 students and shuttered in 2015 by Shelby County Schools.

Both state officials and Ogden declined to specify how much the school spent annually on transportation and building maintenance but said that the cost of facilities was also an issue. GRAD Academy rented and maintained the building that formerly housed South Side High School, originally built for 2,000 students and shuttered in 2015 by Shelby County Schools.

Airhart is working with two other ASD charter operators — Green Dot Public Schools and Frayser Community Schools — to offer GRAD Academy students a high school option next year. A meeting is scheduled at the school for 5 p.m. on Thursday to answer questions from parents and students about the closure and their options.

The impending closure of GRAD Academy is another blow to the ASD. It’s the state-run district’s highest-performing high school and has its largest percentage of high school students scoring on grade level, according to state data from 2017.

Airhart commended the school for its career and technical focus on engineering and coding — two pathways that could lead to dual certification for students.

“The goal would be to transition the two programs and equipment to Frayser Community Schools or Green Dot,” Airhart said, adding that the details haven’t been finalized.

Many GRAD students felt their voices were lost in the decision to shutter their school, according to Kyla Lewis, a 2017 alumna who is still involved in the school’s poetry team. She called the news “heartbreaking but not surprising” and added that teacher and principal turnover was high during her years there.

“South Memphis has seen so much school closure and this hits hard for kids actually from the neighborhood,” said Lewis, now a freshman at the University of Memphis. “I don’t agree with the decision, but the main issue I saw was the thinning out of teachers. Once the best teachers left, by my senior year, the school culture was starting to fall apart.”

Ogden commended his team for the school’s academic strides, but acknowledged that “faculty and staff turnover associated with urban school reform” was a major challenge.

“There has been a continual need to reinvest in our staff and introduce our culture process and learning and development philosophy to new colleagues, which can slow academic momentum,” he said. “There is a persistent national, state, and local shortage of highly qualified, experienced math teachers which we, along with all of our fellow Memphis school operators, especially at the secondary levels, have had to work hard to overcome.”

Paying for school

Sweeping study proposes major changes to the way schools are funded in Michigan

Michigan needs to change the way it funds education so that schools get more money for students who need extra attention — such as those who live in poverty and those who don’t yet have a strong command of the English language.

That’s the top recommendation from a prominent group of educators, policymakers, and business leaders who have been studying Michigan’s school funding system for much of the past two years.

While many states use a complex formula that gives schools more money if they serve children facing extra challenges, Michigan has long used a system that distributes the same amount of money for virtually all students, regardless of their needs.

The state provides some extra funding for students with disabilities — but not nearly enough, according to a state study last year that found schools across Michigan are getting $700 million less a year than they need to serve those students.

The study released Wednesday recommends a major restructuring so that schools would be fully funded for special education programs and would get extra funds to provide resources to students who need extra help. With that money, schools could offer lower class sizes, add counselors and social workers, and give teachers more support, the report says.

The study was conducted by Augenblick, Palaich and Associates on behalf of the Michigan School Finance Research Collaborative.

The collaborative — including top business and education leaders across the state — came together in 2016 after an earlier “school adequacy study” was largely ignored by political leaders.

The earlier study, which was funded by the state legislature, recommended that the state significantly increase the amount of money it sends to schools per student.

The collaborative hopes this new more robust study, which clocks in at more than 300 data-packed pages, will have a greater impact.

Since this study used multiple methods to determine the right funding method for schools, it will be more difficult to ignore, the group hopes.

The study — paid for with $843,000 from major foundations and 18 county school districts — included interviews with hundreds of educators including district and charters school teachers to determine how much money schools need to more effectively do their jobs.

The study examined geographic cost differences in different parts of the state, labor cost differences, and other factors and determined that schools need approximately $9,590 each for students who don’t have special needs, including funds that would come from the state and federal governments.

The study recommends that schools get 35 percent more for students living in poverty, between 50 and 70 percent more for students who are learning English, 70 percent more for students with mild disabilities and 115 percent more for students with moderate disabilities.

Among other recommendations in the  report is that charter schools receive the same per-student funding as districts. Currently, the state’s funding system pays some districts more per student than others based largely on historic funding levels as opposed to current needs. Some districts — including most charter schools — are currently getting around $7,600 per child from the state while others get thousands of dollars more. Schools also get federal funding on top of that. 

It’s difficult to compare how much funding schools are getting now with the proposed $9,590 per student because schools get a mix state and federal dollars and the $9,590 doesn’t include things like transportation dollars.

The report suggests that the state use a new approach to student transportation in which transportation dollars are distributed differently, taking into account differences between urban and rural school districts.

The report did not put a price tag on the cost of implementing the recommendations. It also did not spell out how Michigan could come up with the extra money, instead outlining that conversation as a next step — and highlighting a potential pitfall that could arise.

“While outside of the scope of this current study, the study team feels it is important to highlight during the implementation of a new system that student and taxpayer equity will also need to be considered,” the study’s executive summary reads. “Ensuring that each district and charter has the ability to raise funds needed to meet all resource needs is critical to ensuring both an adequate and equitable school funding system.”

The findings were released Wednesday morning, with press conferences planned in Lansing, Grand Rapids, and in the Detroit area.

Read the full report here: