Concerns for Public Education in Kentucky– The Impacts of HB520

The bill takes both resources and control over decisions about the needs and goals of public education away from local elected school boards. It does not, in exchange, demand superior educational outcomes beyond what the local district could do. As presented, we believe HB520 is a significant threat to sustainable public education in Kentucky.

Specific Concerns with HB520:

• Lack of coordination with district goals and needs— Charter schools should provide something the districts can’t do within magnet or school of innovation processes already available in Kentucky public education. They also should bring educational models that could be scaled up within the district if the model works. Yet, in this bill, the authorizer cannot mandate either. Does a public school principal get to negotiate state or district performance goals for their schools?

There is currently no requirement in the bill that, in order to be authorized or renewed, every charter must fill an identified current need of the specific district and that the charter must outperform current district performance for the equivalent actual demographic mix of the charter. (Section 5, (6)c; Section 7, (1)d 1,c-i)

In HB520, the goals and performance metrics are proposed by the charter school in its application. The authorizer and charter board may negotiate before the final charter contract. However, the existing bill language consistently states that the authorizer does not have the right to mandate. That would be a “ unilaterally imposed condition”, which would be grounds for appeal to the state board by the charter organization. (Section 6, (2) and (3)c; Section 7, (1)c11) This bill must ultimately allow the authorizer to unilaterally decide—at minimum– the performance goals and evaluation framework.

The bill also fails to require an annual analysis of the impact of the charter school on the district resources and long-term effectiveness.

• No cap on charter authorizations—Kentucky already allows magnet-type programs and schools and schools of innovation. Charters are an experiment, to see if they can produce unique, scalable results against current targeted deficits in specific Kentucky public school districts. The bill allows any number of charters to be authorized, across the entire state, without a pilot time limit before there is a break in new authorizations until after a statewide review of outcomes and impacts statewide. (Section 2, (3))

Similarly, the “any authorizer” language suggests that an authorizer outside of the district can authorize in someone else’s district. The bill language should be clarified: e.g., “…within the boundary of its local school district.”

• No requirement for using certified teachers, nor supporting them with benefits and rights on par with the district staff— For most students at risk, research indicates relationship with the teacher is a key predictor of outcomes. The bill should require authorizers to set minimum standards for the number of certified teachers in the schools.

Teaching staff should have all the rights and benefits that are available to the district’s teachers, including due process and inclusion in local district teacher association. The bill speaks only to retirement, health insurance, and a general right to associate. (Section 1, (12)b; Section 12, (4); Section 13, (4)r)

Because a teacher’s working condition is a student’s learning condition, research verifies that collective bargaining by teachers improves student success in school. When teachers organize and establish reasonable workplace rights, they feel safe in expressing their professional judgment on important educational issues in their schools and advocating for the well-being of their students. Research at Rutgers University has found that union-management partnerships lead to better outcomes than having no unions in schools.

HB520 acknowledges, in general, the right to form a teacher’s association and collectively bargain. In practice, however, it puts up barriers that diminish the likelihood and effectiveness of such associations. Employees in a conversion charter can only collectively bargain as a separate unit from other public school employees. (Section 10, (7)) This impediment should be removed. It severely hampers employees from attaining benefits and rights on par with the district staff.

• Lack of local control of authorization of charters— We agree that local school boards should be the only authorizers. However, the bill’s appeals process gives ultimate approval for every application to the state board. (Section 6. (3)d). It’s not obvious why there should be any appeal to the state at all. Schools are an inherently local function. Any appeal to the state should be limited to whether the local authorizer complied with necessary procedures, not a reconsideration of the merits.

In addition, the bill stipulates that if the application complies with the sections of the law, the application “shall“ be approved. This leaves little space for authorizer judgment. (Section 5, (1) and (6))

Regional charters would have similar problems of local control. Each of the local districts would ultimately have different interests in which of their students would attend the charter to meet their needs and what the impacts would be on their local district. The ability of the state to override denials of applications for such schools could impose entrance procedures that might result in cherry picking of one or more district’s best students–and athletes.

• Limited accountability for performance impact on the district as a whole— Under the bill, the charter must meet, at a minimum, only one of the listed charter purposes and associated performance metrics. (Section 4, (3)b) A high-performing school for students could meet that requirement, but might further expand district-wide average learning gaps. (Section 2, (2)a) To move the whole district forward, there must be focus in every case to balance “ Excellence with Equity” to improve Kentucky’s future workforce and citizenry. That means improving all groups’ average performance/readiness while reducing intergroup learning gaps. For charters, that also must mean progressing faster than is being done in the district. Annual as well as multi-year assessment of the impact of the charter on the district’s overall academic and equity performance, as well as the district’s financial strength, must be built into the objectives and the monitoring and evaluation process.

Additionally, the learning gaps need to be measured more authentically than by high-stakes testing alone. This is optional in the bill.

• Charter schools, educational service providers and their contractors are not required to be nonprofit organizations—Public school districts are nonprofits. Charter schools and their operations should be as well. The bill does not require that; it would allow for-profit charters. (Section 1, (8) and (12)) How, then is it fair to taxpayers and the local districts for the bill to grant all charters exemption “…from all taxes, fees, assessments, or special ad valorem levies on its earning and its properties”? (Section 8, (4)) The bill should mandate nonprofit status of these organizations.

Transparency and disclosure after the fact cannot completely assure best use of taxpayer money. In addition to requiring nonprofit status of the charter school and any educational service providers, the bill must involve authorizers–before the fact–in assuring that property arrangements between these nonprofit charter schools and their contractors/lessors do not result in windfall profits (or equivalently inflated salaries, etc) at taxpayer expense. (Section3, (12)a)

• Transfer of state funds based on proportionality to student count (Average Daily Attendance–ADA) results in adverse financial effects on districts—Individual per-pupil costs can vary (by almost an order of magnitude in JCPS, our largest district) depending on the individual needs of a student, the school size and location, and the total number of students at a school. State funds transfer should reflect the equivalent district cost of the specific student demographic mix in the charter school and be adjusted at each of the payment dates to match that cost if student body demographics shift through the school year. This would also make disproportional exit strategies less attractive. (Section 11, (3) )

Particularly in smaller, rural districts, this method of payment—simple proportionality– leaves districts to face higher per-pupil fixed costs. There must be a mechanism in the bill for the state funding formula to make districts whole for this, or there will be unsustainable negative impacts on the school districts.

Federal program dollars should also not be distributed proportionally to ADA. They should follow the district’s allocation procedures, e.g., for Title 1 funds to be distributed based on the school’s percentage of Low-income students compared with other district schools. (Section 11, (6))

A student residing anywhere in the Commonwealth, not just within boundary of authorizing district, may enroll in any charter, though preference is given to residents within the local district boundaries (Section 2, (4)a). Per-pupil funding comes from the student’s school district of residence, without transportation allowances. This transfers transportation responsibilities and expenses to the charter’s local district. However, the bill does not transfer the transportation allowances or administrative fees to the district in which the charter is located, negatively impacting that district. (Section 11, (4)

Fixing the authorizer fee at 3% of funds received (exclusive of transportation funds) for all charter schools may likewise be inadequate in some situations to prevent negative financial impacts on the local district. Small charters, rural districts, or situations where a local authorizer only has one charter to oversee, assess, monitor and evaluate might require higher percentages to properly cover the resources used. The fee should be open to negotiation above the 3% minimum.

Definitions of the cost basis of services provided to charter schools by the district are also unclear. They should be contracted at fully loaded costs. (Section 3, (12)a)

• HB 520 promotes consolidation, harmful for rural areas
Charter authorizers include a “collaborative among local school boards that forms to set up a regional public charter school to be located within the area managed and controlled by those local school boards” Section 1(13)
“A public charter school authorized by a…collaborative may enroll students who reside within the boundaries of the Commonwealth” Section 2(4)(a)

• Possibility of virtual charters— The Walton Family Foundation, which generally supports charters, has stopped supporting virtual charters based on their performance. Personnel is generally the largest budget item in a district, and even in HB520, virtual charter funding models would have to be negotiated. Virtual schools are rife with possibilities and examples of financial abuse. We should exclude them from this initial charter experiment.

As –or more –importantly, for most students at risk, research indicates relationship with the teacher is a key predictor of outcomes. Virtual charters are not an answer for underperforming students. (Section 4, (5))

• Allowing underperforming charters to continue— The bill allows discretion in extending/renewing charter authorizations to schools that are not meeting performance targets. (Section 9, (1)) This is exactly the organizational behavior in the districts that charters are supposed to stop. Any success of charters in New Orleans Schools District has come in part as a result of a lawsuit-driven shift to rigorous adherence to denying renewals to underperformers.

Changes in population or interest or simply adequate, but unexceptional, performance should also be reasons to stop a charter application or contract renewal.

Public input into this renewal decision process is critical, but is not guaranteed or viable in the 30-day renewal decision timeline. (Section 9, (5)b-c; Section 9, (4)b)

• No definition of exit processes, due process and transparency—While the bill indicates a need for measures and metrics for student exits, it is silent on specific processes and the content and frequency of public disclosures of exiting results. these are necessary to assure that students with higher education costs, behavioral issues, etc are not targeted for exiting. (Section 7, (1)d 1,g)

• Low parent participation requirement in charter board governance—Charter boards, which can govern more than one charter school are required to have a minimum of only two parents, and these do not need to come from a particular school. ( Section 3, (7)b)