The Unintended Consequences of HB520

The House Committee Substitute version that is now in the Senate Education Committee takes away from local elected school boards both the resources and control over decisions about the needs and goals of public education.  However, contrary to the bill’s stated purpose it does not, in exchange, mandate ”exceptional” educational outcomes compared to what the local district  is currently experiencing.

Overall, education uses a major portion of our state and county budgets. Any bill must clearly lay out how charter schools–a major shift in Kentucky public education–will be done while protecting the financial viability of our public school districts.   During hearings in the House on the original bill, major concerns were raised about the funding allocation method. We shared those concerns. Deleting that previous language and remaining silent on financing is no answer; it is a disaster waiting to happen.

Attached are more details of our concerns about the bill.  They range from seeing no assurance that every charter must do better than the existing district at reducing achievement gaps to multiple examples of unclear or vague language, e.g.,  wording allowing small subdivision/city mayors as authorizers for charters. This bill is incomplete and unbalanced.

We urge you to oppose passage of HB520 as presented, because it is a significant threat to sustainable public education in Kentucky.

Specific Concerns with HB520:

The groups represented include Jefferson County Teachers Association, Fellowship of Reconciliation (FOR), the KY Alliance against Racist and Political Repression, and Save Our School KY. These diverse groups–some originally embracing charter possibilities and others adamantly opposed–have joined together to find common ground.  At a minimum, we believe charter school bills would have to be aligned fully with the Annenberg Recommendations for Accountability in Charter Schools.

Lack of coordination with district needs and goals— Charter schools should provide something the districts have not accomplished within magnet or school of innovation rules already available.  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.

A public school principal does not negotiate state or district performance goals for their schools. Yet, 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. Nor is there a requirement that the charter must outperform current district performance for the equivalent actual demographic mix of the charter. (bill reference: Section 5, (6)c; Section 7, (1)d 1,c-i)  We need both.

In HB520, the goals and performance metrics are to be 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) For strategic alignment, a charter program would have to allow the authorizer to unilaterally decide—at  minimum– the performance goals and evaluation framework.

No cap on charter authorizations— 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 for a thorough, independent statewide review of outcomes and impacts statewide. (Section 2, (3))  Kentucky already allows magnet-type programs and schools and schools of innovation.  Charters are a new experiment here to see if they can produce improved, scalable results against current targeted deficits. If not, they have no place in our school districts.

There is lack of clarity here as well.  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 that relationship with the teacher is a key predictor of outcomes. A bill should require authorizers to set minimum standards for the number of certified teachers in academic classrooms. This one does not.

Teaching staff should have all the rights and benefits—including retirement plans, health insurance, etc– that are available to the district’s teachers, including due process and inclusion in local district teacher association.  The current bill does not address these issues positively.

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. For example. employees in a conversion charter could only collectively bargain as a separate unit from other public school employees. (Section 10, (7)) This impediment severely hampers employees from obtaining benefits and rights on par with the district staff.

Lack of local control of authorization and evaluation of charters– We believe that locally elected school boards should be the only and final authorizers. It is not obvious why there should be any appeal to a state board at all.  Schools are an inherently local function.  However, the bill’s administrative appeals process gives ultimate approval for every application to the state board. (Section 6. (3)d). Any such appeal  should be limited to whether the local authorizer complied with necessary procedures, not to a reconsideration of the merits. The bill has a provision for judicial appeal through the Court of Appeals, but no process or direction to stay approval through a potentially lengthy appeal.

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))  There is also no reciprocity of rights to negotiate amendments to the charter contract.

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/or athletes.

The bill allows conversion charters to be authorized based on a petition signed by at least 60% of the public school’s parents.  There is no process for public hearings for all sides to be heard before a petition could be started. A charter corporation could advertise to school parents and collect an electronic petition, without recourse for parents to withdraw their names. There is no clarity about how and by whom such a school would be overseen and evaluated.

Finally, the current bill allows mayors in counties with urban/county or consolidated government to be authorizers.  As the Herald-Leader editorial on March 7 pointed out, that language would include any mayor in those counties—e.g., the mayors of Shively, of St Matthews, and of Devondale, or a host of sixth-class cities.  We believe none of these mayors—nor mayors of Metro Louisville or Lexington/Fayette– however well intentioned, could muster the educational expertise to oversee and evaluate a charter school properly.

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 with high standards” could meet that requirement, but might  further expand district-wide average learning gaps. (Section 2, (2)a)

To move the whole district forward, charter must have specific 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 below district averages.

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.

There is no specification around how local, state and Federal funds and grants would be allocated to charter schools– Transfer of state funds based on proportionality ( the model in the original House bill)  to student count (Average Daily Attendance–ADA) results in adverse financial effects on districts.  There is not even a general policy statement in the current bill about requiring funding arrangements that do not negatively impact the public school district.

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.  It should be adjusted at each of the payment dates to match that cost if charter student body demographics shift through the school year.  This would also make disproportional exit strategies less attractive.

Particularly in smaller, rural districts, the originally-proposed 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.

Similarly, 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.

Finally, the current bill is also silent on authorizer fees. Fixing the authorizer fee at 3% (as originally proposed) of funds received (exclusive of transportation funds) for all charter schools may likewise cause 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.

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)

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”?  (Section8, (4))  The bill should mandate nonprofit status of these organizations.

Transparency and disclosure after the fact does not always 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).  The bill is silent on this major exposure to misuse of taxpayer/school district resources.

Possibility of virtual charters— 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.  They invite segregation and warehousing of “problem” students.

The current bill version names and allows virtual charters, but has deleted the rules regulating them. 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 virtual schools are rife with possibilities and examples of financial abuse.  We should exclude them from any charter proposal.

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 deny a charter application or contract renewal.

Public input before a charter renewal decision is critical, but is not guaranteed or viable in the 30-day renewal decision timeline.   (Section 9, (4) b and (5)b-c)

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)

ECE (special education) students can require high per pupil expenses. While there is general language in the bill indicating charters would not discriminate based on disability, the standard is whatever grounds by which the school district would be judged. (Section (3)15).  A district must provide an education for all ECE students, but not necessarily at every school.  That could allow charters to exit such students because of lack of resources for meeting the students’ needs.  This would increase the concentration and relative cost of ECE students in the remaining district population while overpaying the charter (if simple proportionality were the funding model).

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)
Parental involvement in the school governance is critical.

Chris Harmer,
stakeholder facilitator

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