Who owns the equipment in charter schools? Ohio Supreme Court will decide

By Maggie Thurber | Franklin Center School Choice Fellow

Photo by Derek Bruff
via Flickr Creative Commons

Who owns the equipment in charter schools?

We’re talking the computers, desks, supplies – all the things that go into the structure of a charter school. It seems like the common sense answer would be the school.

But most charter schools in Ohio are public, which means they’re funded with public dollars much the same way as traditional public schools.

In which case, your answer to the question would probably be “the taxpayer, ultimately.”

And again, that makes sense.

But there’s an odd twist to this question and it’s playing out in the Ohio Supreme Court.

You see, there are management companies who are contracted to run the day-to-day operations of charter schools, and when you add these private companies into the mix, things get a bit muddled.

The case is Hope Academy Broadway Campus et al. v. White Hat Management, LLC, et al. and oral arguments were heard Tuesday.

The case pits 10 charter schools against White Hat Management.

According to the schools, White Hat refused to allow their financials to be inspected by the schools who wanted to see how the money paid by the state was used. The schools sued, asking to recover roughly $100 million that was spent on property and equipment.

White Hat maintains that it owns the equipment, but offered to let the schools keep the desks, computers and other items if they paid the current value for them.

The trial court and the 10^th District Court of Appeals agreed with White Hat, saying that the public money paid by the state on a per-pupil basis became private funds as soon as White Hat, the private company, received them.

Just like when the state pays a private contractor to pave a road, the public funds are no longer public, though there is an obligation for the contractor to actually complete the project according to the terms of the contract. But how the contractor spends those specific dollars is not public.

The relationship with the charters is the same, White Hat attorneys argue. They say White Hat is a private entity performing a service for the public entity.

But the charters say White Hat is acting like the “functional equivalent” of a public entity because it is accepting and using public dollars to perform the function of a public school. They maintain that White Hat was supposed to act as the purchasing agent for the schools and since the company is just the agent, the money remains public and the purchased items are owned by the school.

The charters also say that because it is public money, it can at least be audited. And there is some case law in Ohio that says when a private entity receives a substantial amount of public funds, it can be audited, but only when they are serving as the functional equivalent of a public office.

"Would you agree that White Hat is the functional equivalent of a public office?" Chief Justice Maureen O’Conner asked during the oral arguments.

"If you're doing a public function with public funds, aren't you the functional equivalent of that public official?” Justice BillO’Neill asked.

No, White Hat attorneys argued. They were a private company providing a service to the charter schools which are the public entity.

The Supreme Court will decide – and the decision will have implications for more than just the 10 charter schools in the suit.

Corporate tax credits mean more school choice for parents

By Maggie Thurber | Franklin Center School Choice Fellow

Two students whose parents took advantage
of the Florida Tax Credit Scholarship Program.
Photo courtesy of Step Up For Children

There are corporate tax credits for all kinds of things – from making a film in a certain location to providing health insurance for employees. But a corporate tax credit for school scholarships?

Yep – in Florida.  And why not?

The Florida Tax Credit (FTC) Scholarship Program grants corporations a dollar-for-dollar tax credit for donations to scholarship funding organizations. The Florida legislature created the program in 2001 as a way to give low-income families a choice in their children’s education.

Under the program, corporations can redirect up to 100 percent of their corporate income, insurance premium and direct-pay sales taxes, 90 percent of their alcohol beverage excise, and/or 50 percent of their oil and gas severance tax liabilities to non-profit scholarship organizations like Step Up For Students.

Scholarships are for kindergarten through 12^th grade students who qualify for the free or reduced-price lunch program.  It can be used to provide tuition assistance to one of nearly 1,500 participating private schools or $500 to help cover transportation costs to an out-of-district public school.

The program was expanded in 2010 to allow more participation by students through an increase in the eligibility thresholds and by increasing the maximum amount that can be allocated. It also indexed the scholarship amount to public school spending.

According to the Step Up For Students website, the bill granting the expansion was approved by a bipartisan majority, which included “nearly half the Democrats, a majority of the Black Caucus and all but two in the Hispanic Caucus.”

It’s not just another voucher program – there’s accountability with it.

All students in grades 3 through 10 must take a state-approved test and a University of Florida research team reports test gains in reading and math. Schools that receive more than $250,000 in scholarship monies must also file a financial report with the state.

In 10 years, the number of participants has grown 643 percent – from 10,549 in the 2004-05 school year to 67,800 in the 2014-15 school year. And 54 percent of those students are from single-parent households.

The majority of the students are minorities and “tend to be among the lowest-performing students in their prior school,” regardless of how well their prior school did in overall performance.

Sounds like a good deal – right?

Not to everyone – or rather, not to those who gets money for public education.

The Florida Education Association, the Florida School Boards Association and the state Parent Teacher Association filed a lawsuit against the program on Aug. 28.

They claim the tax credit program is unconstitutional because it funnels taxpayer money into private and religious schools, which is similar to the complaint made in North Carolina.

And like in the North Carolina case, where a judge ruled the program unconstitutional, hypocrisy abounds.

In 2006, the Florida Opportunity Scholarship Program was overturned by the courts. That program granted students vouchers from the state so they could attend private schools. The court ruled the Florida Constitution prohibits using “public monies to fund a private alternative to the public education system.”

But unlike the Opportunity Scholarship Program, this isn’t money from the state – it’s a tax credit just like for contributions to churches or food banks or other non-profits.

No one claims those organizations are publicly-funded – why is the Florida Tax Credit scholarship any different?

Interestingly, the organizations waited until the FTC Scholarship was expanded to higher incomes. They didn’t have a problem with the program when it was just low-income, low-performing students.

Florida Senate President Don Gaetz issued a statement:

“When Florida Tax Credit Scholarships were available only to the very poor, who disproportionately are minority families, and other students with unique needs, the School Boards Association didn’t challenge their constitutionality. These students often bring more challenges to the classroom and require extra help, more individualized instruction and additional resources. It is only now, when the eligibility for scholarships has been expanded and when less-impoverished students can participate that the School Board Association has discovered its constitutional indignation."

But it doesn’t look good for the opponents of school choice.

A 2011 U.S. Supreme Court ruling in Arizona Christian School Tuition Organization v. Winn said that tax-credited contributions are not government expenditures.

“When Arizona taxpayers choose to contribute to (School Tuition Organizations), they spend their own money, not money the state has collected from respondents and other taxpayers,” the majority opinion read. “…the tax credit system is implemented by private action and with no state intervention. … Like contributions that lead to charitable tax deductions, contributions yielding (School Tuition Organization) tax credits are not owed to the state and, in fact, pass directly from taxpayers to private organizations.”

And it’s clearly a popular tax option, with more than $88 million pledged so far in 2014.

Ultimately, it’s all about the money. The organizations and entities that receive tax funds don’t want to lose funding – even when it’s funding they wouldn’t otherwise receive.

As for the children?

They’re just pawns in the struggle and whatever education best suits them be damned.

Debunking the myths about charter schools

By Maggie Thurber | Franklin Center School Choice Fellow

Graphic courtesy of National Alliance for
 Public Charter schools

Students around the nation have begun their 2014-15 school year and many of them are at charters schools – a school of choice.

But even though charter schools have been around for a while now, there are quite a number of myths about them that deserve to be debunked.

The biggest – and some think the most important one – is that charter schools are not public.

Actually, they are. They’re public schools, the same as traditional school districts operate, though they have been released from certain requirements in order to provide innovation and creativity in the way they teach.

They are not private schools either.

And despite what you may have heard otherwise, the support for charters is growing.

According to a recent PDK/Gallup poll, “(s)even of 10 Americans support public charter schools, particularly when they’re described as schools that can operate independently and free of regulations.”

That’s huge!

But there’s a problem.

PDK/Gallup conducts this polling annually, so they’re able to track opinions over time. Concerned that the description “schools that can operate independently and free of regulations” might be presenting a bias in the question, they decided to ask the question without the descriptor this year.

What they found shouldn’t surprise anyone.

Support for charter schools declined when no descriptor was included, leading the pollsters to conclude that “(m)ost Americans misunderstand charter schools.” And it declined in all groups asked: nationally, public school parents, Republicans, Democrats and Independents.

The poll also tried to determine what, exactly, the participants know about charter schools.

In 2006, 53 percent thought that charter schools were not public. In 2014, 50 percent think they are, but 48 percent still believe they aren’t.

In 2006, 50 percent thought the charter schools could teach religion. By 2014, the number who thought that was true was still high at 48 percent.

In 2006, 60 percent thought charter schools could charge tuition. In 2014, 57 percent still believe that.

Perhaps the most startling result was that 68 percent think charter schools can select students on the basis of their abilities. This is up from 58 percent in 2006.

None of those are true. Charter schools are public, they can’t teach religion, they don’t charge tuition and they cannot discriminate.

Based upon these results, the National Alliance for Public Charter Schools decided to embark on a campaign, The Truth About Charters, to help educate the public and, hopefully, see the results of their efforts in future PDK/Gallup polls.

Katherine Bathgate, the director of communications and marketing for NAPCS, said she wished the misconceptions about charter schools were not as high as they were.

“That’s why we’re doing the work we are now,” she said. “It’s why we’re trying to get the word out about charter schools and how they function in the community.”

She’s careful to always refer to them as public charter schools, not just ‘charter schools’ to help address the false idea that they are not public schools and not private schools.

She said she is baffled as to why some believe public charters can discriminate in their selection of students.

“Some inaccurately claim that charter schools can skim or pick the best students,” she said. “They’re tuition free, must accept all students and if more students apply than they have seats for, they must conduct a lottery to see who gets to attend.”

She speculated that perhaps it’s an excuse for why public charters are performing better in general, “because it can’t be the curriculum, structure, or anything else that’s different,” she said.

Except that’s exactly what’s different and enables public charters to tailor their education to the individual needs of the student.

But do they all perform better?

Not all of them, just like not all traditional public schools are bad, she explained, but a great many do.

“Since 2010 there have been numerous research studies and all but one shows that charter school students outperform their public school peers,” Bathgate said. “Sometimes public charters do serve a larger percent of disadvantaged students, especially those who have achievement gaps – sometimes two to three years behind. Data shows that they’re able to close that gap.”

And what about those low-performing charters? In Ohio, some claim that parents are pulling their kids out of good traditional public schools only to send them to a bad public charter.

Bathgate thinks parents should make responsible decisions about the best educational opportunity for their child, but thinks it’s odd that so many worry about poorly-performing public charters, but not poorly-performing traditional public schools.

What about the parents who have no choice but to send their child to a D- or F-graded traditional school just because it’s the only option in their zip code?

“We advocate for strong oversight and accountability – freedom and autonomy in exchange for results,” she said. “And if that’s not being met, it needs to be addressed immediately for the sake of the students. I think it’s important to judge how a school is performing overall, but public charter schools are a school of choice and parents should have the right and opportunity to (find) the public charter school that fits the schedule or the interest of their student.”

The bottom line, she said, is parental choice and the best education for the child.

“Want to make sure that students go to a well-performing school,” she said, “but in the big picture, want to raise the bar for both charters and traditional public schools.”

That’s a goal everyone should be able to agree upon.

Choosing your words wisely - a lesson from #Dream14

The cover of new survey
by Reason-Rupe.

One of the things emphasized during social media panels at the Americans for Prosperity Defending the American Dream Summit was the choice of words.

Liberal, conservative, progressive, limited government, big government, socialism, capitalism, fair share, greater good, individual responsibility...

When you hear these words you immediately have an image of something - either good or bad depending upon if you believe in the concept or if you're going by what you've heard or associate with the term.

The other thing was the difference between preaching to the choir and trying to persuade or influence others.

Too often on the right side of the political spectrum, we are preaching to the choir and using terms they like, or ones that appealed to us as we formed our political opinions.

That's okay - and something we need.

But if we're trying to persuade others, we have to understand how they interpret words and messages and then use the phrases that will resonate with them.

So this post is definitely preaching to the choir about how to change our language and our phrases in order to appeal to those who might be receptive to a conservative philosophy if we weren't using words that immediately turned them away.

A recent Reason-Rupe survey on millennials is a good place to start.

Millennials are 18-29 years old and, according to the survey, "trust neither political party, are social liberals and fiscal centrists, and are supportive of both business and government. They favor free markets, but aren’t sure whether markets or government best drive income mobility."

They're less partisan and more receptive to a non-traditional candidate. They don't trust either party, especially when it comes to issues of privacy. They overwhelmingly (78 percent) think the budget deficit and national debt are are major problems and a majority believe that businesses pay too much or just the right amount of taxes.

As the Daily Signal explains:

Millennials say they prefer a “larger government” that provides more services. They don’t tend to think of “big government” leading to higher taxes and heavier regulation. Once the possibility of higher taxes to support a larger government is mentioned, though, millennials’ support shifts.

The survey also says "millennials believe in self-determination and endorse the values underpinning the free market system."

If you ask them to choose between capitalism and socialism, only 52 percent will pick capitalism. But if you ask them to choose between a free-market economy and a government managed economy, the support for free-markets jumps to 64 percent.

The survey shows two critical things:

1. They either don't know or don't care about various terms and what they mean, which is scary in and of itself.

2. They do understand concepts and are more likely to align with conservative economic principles so long as they are phrased to reflect the concept.

Another important fact from the survey: they vote.

As the Daily Signal explains:

"The 18- to 29-year-old demographic played a crucial role in the 2008 and 2012 elections. These millennials were instrumental in electing Barack Obama to the presidency not once, but twice. In 2008, Obama won 66 percent of voting millennials; in 2012, he captured 67 percent.

Emily Ekins, polling director for Reason Foundation, says that had those ages 18 to 29 not voted in 2012, Republican nominee Mitt Romney would be in the White House."

This is good news for those of us on the conservative side, but it means we have to change how we characterize our positions if we expect to reach this key demographic.

But it's not just the millennials. Too many of our friends and neighbors are just not into politics. It's something they think about only in passing or when they go to vote. They often have the same reaction as millennials - or they tune out when they hear certain words or phrases and never get to hear the message behind the language.

Bottom line: if we are going to share the message, we have to change our words.

Hypocrisy in the NC school choice lawsuit

By Maggie Thurber | Franklin Center School Choice Fellow

A North Carolina judge has decided that the state’s school choice scholarship is unconstitutional.

Of course the case is being appealed as is the permanent injunction which would put an immediate stop to the program and kick some kids out of their chosen schools.

But what’s unusual about this case is the hypocrisy by those who sued to stop the program.

You see, this school choice scholarship allows kids to attend private schools – including religious ones.

In 2013, the North Carolina General Assembly created the Opportunity Scholarship Program (OSP) and provided $10.8 million out of the general fund budget to cover scholarships of up to $4,200 for eligible children so they could attend a private school.

There were more than 5,500 applicants for the OSP so the state held a lottery in June to determine who would get the scholarships.

The fact that there wasn’t enough money to meet the need says a lot.

Applicants had to list the school they wanted to attend. Of the 446 identified, 322 were religious schools and 117 were independent schools.

According to the lawsuit, in 32 of the state’s 100 counties, the only private schools are religious ones, and some of them will only admit students of a particular religion. As of July, the 10 schools with the most OSP enrollees were religious ones.

And that’s the problem.

Certainly, there are complaints that some of the private schools are not accredited by the state board of education and don’t follow the same requirements as public schools when it comes to credentials or degrees for teachers and principals. But part of the appeal of private schools is that they don't have to follow one-size-fits-all criteria.

True, the state constitution does have specific language about public education. But the legislature replaced the $10.8 million it originally deducted from the public school budget in order to negate the constitutional challenge about funding public education.

The bigger issue is religion. And that’s where the hypocrisy comes in.

You see, according to some, the state is funding religion with public tax dollars and that’s a no-no to them.

Except that’s not really true. Technically, the money is going to the child – or rather, the child’s parents – in order to give back to them the state tax dollars they pay toward their child’s education. The parent then chooses how to best spend that money and, for some, that’s in a private religious school.

Karen Duquette, vice president of Parents for Educational Freedom in North Carolina, said the goal of the program is for every child to have the education that best fits their individual needs. She noted that a similar program for children with disabilities hasn’t been challenged in court and it operates the same way as the OSP.

The intent, she said, is to start educational choice with an underserved community.

“If you like your school, you don’t have to leave it,” she explained. “But if that school isn’t working for you, without some form of scholarship opportunity, you’re stuck in that school. Our obligation is to help every child, whether low income or with disabilities, so every child has access to the education that’s best for them.”

So you’ve got parents receiving funds from the state and then choosing how best to spend those funds and some of that spending happens to be at a religious institution.

How is that any different from food stamps?

The Supplemental Nutrition Assistance Program (SNAP) provides funds for parents to purchase food. No one tells the parent they can’t exercise their choice and purchase junk food.

And what about TANF – Temporary Assistance to Needy Families?

Under that program, the government hands out cash and the family can spend it in any way that benefits the child, including the parent’s transportation and employment expenses. A parent could choose to use those funds for costs associated with a religious vacation bible school, if they wanted.

Choices abound everywhere. These are just two examples where parents get to choose how their spend government subsidies or handouts based upon their own judgment as to what is best, including religion-related activities.

But no one sues over those decisions, even though some of them are more harmful to children than sending them to a religiously-sponsored grade school.

That’s hypocrisy.

Either parents get to decide or they don’t. And if they get to decide how they spend their SNAP and TANF funds, they should get to decide how they spend their education funds as well.

Fortunately for the children – it’s “for the children” after all – already enrolled for this school year, almost all of the schools will allow them to stay while the permanent injunction against the scholarship program is appealed, Duquette said. She hoped the North Carolina Supreme Court would quickly overrule the permanent injunction as they did the temporary injunction that was previously issued.

The unconstitutionality ruling is also being appealed.