The Legislature Prepares Another Gift for K12 Inc. and the Virtual Charter School Industry

Pending Senate Bill 76 is another volley in the war Wisconsin Republican legislators have unleashed on local control.  The bill would further undermine the authority of locally-elected school boards to determine the number of charter schools that operate within their school districts.

Senators Darling and Olson introduced an amendment to the bill on October 31.  The amendment provision making it easier for a school district to convert all of its schools to charter schools has already drawn attention.  What seems to have escaped notice so far is that Senators Olson and Darling may have mixed up their holidays – their Halloween amendment provides yet another Christmas present for their well-heeled friends at K12 Inc. and the for-profit virtual charter school industry.

The poor performance of virtual charter schools in Wisconsin has resulted in few if any negative consequences for their operators.  But this past year, a slight dose of accountability has slipped into the mix with the advent of school district report cards issued by DPI.  Senators Olson and Darling’s amendment nips that positive trend in the bud by stripping virtual charter schools out of the home school district for report card purposes.  It is hard to see this as anything other than a sell-out to K12 and their virtual charter chums.

There are currently 28 virtual charter schools operating in Wisconsin.  Many of them – like Middleton-Cross Plains 21st century eSchool – are wholly operated by and genuinely integrated into the home school district.  In other cases, however, the home school district serves as the equivalent of a mailing address for a virtual charter school that is operated by an out-of-state, for-profit vendor.

Consider the situation in McFarland.  McFarland sponsors the Wisconsin Virtual Academy (WIVA), a virtual charter school, which is operated by K12 Inc.  There are about 4300 students in the McFarland District and nearly 2000 of them attend WIVA.  Nearly all of WIVA’s students live somewhere other than McFarland and open enroll into school.

This year McFarland receives $7,925 from the state for each student who open enrolls into the school district.  Under the terms of its contract with Four Lakes Education, Inc. (a non-profit affiliate of K12 Inc.), the lion’s share of open enrollment transfer payments for WIVA students go to K12.  K12 pays McFarland $300,000 per year, plus 3% of the open enrollment transfer payments received for each student beyond the first 800 enrolled in the school and keeps the rest.

Assuming all 1,964 WIVA students open-enroll, the State of Wisconsin will pay a jaw-dropping $15.6 million this year to McFarland to underwrite the operations of WIVA.  Of that amount, roughly $15 million goes to K12 and McFarland gets to keep about $575,000.

Since the McFarland school district is not involved in the day-to-day operations of WIVA and the school caters to students who live outside of McFarland, the school district’s interest in ensuring that WIVA students are learning what they should is attenuated when compared to the district’s incentives to oversee the quality of education provided at the district’s four bricks-and-mortar schools that serve McFarland residents.

The school district’s interest in overseeing WIVA ticked up this year.  This was the second year that DPI issued reports cards to all the schools in the state, but the first year that school districts also received report cards, based on the cumulative performance of all their schools.  “All their schools” includes any virtual charter schools.  So school districts now know that a poor performance by a virtual charter school they sponsor will end up reflecting poorly on the school district’s report card.  This increases the incentive of a home school district to oversee the performance of a virtual charter school it sponsors.

McFarland proves the point.  Since about 45% of McFarland’s students attend WIVA, the performance of the students at the school has a significant impact on the report card for the school district.   In general, virtual charter schools perform poorly, and WIVA is no exception.  WIVA received an overall score of 60.4 on the state’s school report card.

This is squarely in the “meets few expectations” category that Governor Walker equated with failing schools in his initial voucher expansion plan earlier this year.  It is an anomalous score for the generally high-achieving school district.  It is more than 10 points lower than any other McFarland school.  The McFarland school district as a whole received a strong overall score of 74.4, but it would have been significantly higher without WIVA.

This was noted.  The McFarland school district sent a statement to parents about the DPI report cards.  It said in part:

 Our district-wide rating was negatively impacted by the addition of our independent charter school, a state-wide virtual school we host called Wisconsin Virtual Academy (WIVA). . . . Had the virtual school not been included in our district-wide totals, our district-wide score would have been notably higher.

The adverse impact that the poor performance of for-profit virtual charter schools has on the sponsoring school district’s DPI report card could prompt a number of responses. The most obvious and potentially beneficial would be for the sponsoring school district to be motivated by the virtual charter’s poor performance to step up its oversight and take appropriate steps to bring about improvements in the quality of the education the virtual charter provides, since improving the virtual charter’s report card score will improve the score of the district as a whole.

A less helpful response would be to divorce the virtual charter school from the school district for DPI report card score purposes. This way the virtual charter report’s card score could spiral down even further, but it would have zero impact on the home school district’s report card score.  Of course, there doesn’t seem to be any legitimate justification for this sweep-the-problem-under-the-rug approach, which eliminates the school district’s incentive based on school report cards to push for improvement at the virtual charter.

Guess which approach Senators Olson and Darling think is best?  The first provision of their Halloween amendment to Senate Bill 76 directs that, for purposes of determining a school district’s report card, DPI “may not include data derived from a virtual school that is considered to be located in the school district” if at least 50 percent of the pupils open enroll into the school.

If the bill passes, McFarland and other host school districts will be able to enjoy the revenues they rake in from hosting a virtual charter school without worrying that the poor performance of the virtual school will pull down the report card score for the district.   To the extent that K12 and other for-profit virtual school operators are not pleased by the slight increase in accountability resulting from their inclusion in school district report cards, Senators Olson and Darling have lost no time in proposing to ride to their rescue.  It would be a wonderful thing if the senators could show a similarly solicitous regard for the concerns of our bricks-and-mortar schools and the students they serve.

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3 Responses to The Legislature Prepares Another Gift for K12 Inc. and the Virtual Charter School Industry

  1. Another concern in the bill is the proposed expansion of non-district independent charters. As public schools, these charters would still be obligated to comply with the IDEA and other civil rights laws, but how well these laws would be enforced is uncertain in a single school privately owned independent charter.

  2. Mad4Madison says:

    Ed –

    Thanks for the information. I will admit that this totally missed my radar.

    A couple of items for you:

    1) It is Olsen, not Olson. Olson is a wonderful elementary school on our west side. Olsen is the State Senator that is bringing the amended bill.

    2) Your comments above seem to be directed at K12 and not so much at the McFarland School District. Seems to me that you need two to tango here and the school district is getting a bit of a pass. The district wants the money and has an arrangement with WIVA (errr – K12, Inc.) to pass through money from the State. My opinion would cause me to point a bigger finger at the district in this case. You know that K12 is for profit. I wasn’t quite aware that McFarland was too. And if McFarland wanted the computation changed, do you think Senator Miller would listen and sponsor a bill? Not a chance. Seems to me that WIVA / K12 and McFarland are in this together. Sorry, but the district does not get a pass at all here.

    3) I am a bit surprised to see you quoting or even using the DPI report card numbers since you have been against those very metrics and the way they are computed. I guess if you are saying that a “60.4 is anomalous” score and “10 points lower than any other McFarland school” then a 60.4 must be bad. You certainly make the point that a 60.4 is bad as defined by the governor. But it seems that you agree with that based on the context of the post. So if 60.4 is bad for McFarland, then what about the following – 63, 60.9, 58.8, 60.8, 54.3 and 59.1? Those would be the scores for (respectively) Badger Rock, East High, Mendota Elem, Wright Middle, Allis and LaFollette. At the very least, it seems WIVA and it being “for profit” is doing a bit better on the DPI Report Card than one of our own high schools and within .4 of a second.

    I really thought hard about including #4 above. I do not want to give you the impression that I think WIVA is a great school or even a viable choice. It is just that if you are going to use the DPI numbers to illustrate a problem with a Virtual Charter School, then you need to be willing to have those same numbers come back into our district.

    My take is that McFarland is simply upset that the district metric is affecting them (cost of doing business – sorry for the pun) and has found two willing Senators to help them out. I don’t think the issue is the actual performance of WIVA. But that is just me.

    • Thanks for your comments. It disappoints me that my crack staff of copy-editors let the “Senator Olson” typo slip through. No holiday bonus for them. I apologize to Senator Olsen, though I suppose that there are other things I wrote that may disturb him more than the misspelling.

      If there is blame to go around in connection with this legislation and accountability for virtual schools, I think folks are free to draw their own conclusions about how it should be apportioned among K12, the McFarland School District, the cooperative legislators and any others.

      While I was writing this I was certainly aware that the report card scores for some of our Madison schools are lower than the score for WIVA. But as you note, the story here isn’t so much that WIVA received a relatively low score; it is the extent to which some of our legislators seem eager to do the bidding of K12 in a way that undermines accountability and seems totally devoid of any public policy justification.

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