Charter Sales

There's a great Steve Jobs clip I've used before. In it, Jobs offers his explanation of how the bean counters end up in charge of a company.

The basic principle is simple. Initially, a business prospers based on its ability to make stuff or provide a service, and the better they do stuff, the more money they make. And for a while, doing stuff better pays the bills and makes the profits.

But eventually doing the stuff doesn't increase the revenue stream, because you've pretty well hit all of the market you can hit. The product has attracted all the money it can-- on its own.

At that point it's up to the sales force and the bean counters. To keep the revenue stream thriving, you need people who can push sales in new markets and fiddle with the money. You need marketeers and accountants to run the company. The people who create the product are not so important, because making the product better will not make the business more profitable. Put another way, you can only drive so many sales by being good at your product. After that, you can only drive more sales by being good at selling.

It puts the sales people in charge, and that immediately starts to destroy the product, because the sales-oriented management turns to the people who actually create the product and says, "Never mind making products that work well-- I want a product that we can sell. Our market research says that people really want pink flying weasels as pets, so stop whining and get in there with that pink spray paint and staple some wings on those weasels. Of course it's bad for the weasels and the customers, but we have sales to make today. We'll worry about tomorrow the next time the sun rises."

It's a model worth understanding when considering charter schools. A company that makes computers or cheese-curlers or hamster shoes will take a while to get to sales-over-product stage, but a charter is bean counter ready from day one. From the moment it opens, the modern charter's main business is not education-- it's sales.

We've seen this repeatedly. The K12 cyber chain has been plagued by lawsuits that turn up former employees who complain of a company that is focused primarily on making sales any way it can. K12 has been particularly notorious for churn-- just trying to get new names on the roster faster than the old ones struggle and give up. At one point, K12 operations in Ohio were posting a staggering 51% rate of churn.

K12's mission creep was so great that even cyberschool supporters were bothered. Houston Tucker was the company's marketing director, and he left saying, "The K12 I joined isn't the one I left."

K12 is a striking example of the charter's need to market above all else, but they're hardly an anomaly. A public school without a marketing department is like a weasel without wings, but a modern charter without a marketing department is like a weasel without food

Just google "charter school marketing vp"-- Charter Schools USA, KIPP, Louisiana Association of Public Charter Schools-- over a million hits come back and even if we assume that only 2% of those are actual charter school marketing jobs, that's still a huge number of people in charter school sales. And that's before we get to people like Eva Moskowitz-- would you say that Moskowitz is more about providing pedagogical leadership for Success Academy, or about fundraising and marketing for the chain. Certainly the budget for marketing at these schools is stunningly large. A similar quick-and-dirty search for public school marketing officers came up empty.

When modern charter and choice advocates extol the virtues of competition, they're really demanding that public schools meet them on the field of combat where marketing and advertising are the tools of battle. And if public schools go to meet them there, schools lose regardless of the outcome. It's the triumph of the sales department and bean counters over product people, the rise of an education system that thinks of itself as an industry and which is far more concerned about marketing than educating and which thinks nothing of stapling onto weasels.

York Catches a Break

The school board of York, PA, has a chance to convince a court that it is not just a useless appendage. Monday Judge Stephen Linebaugh, the same judge who ruled that York schools should go into receivership, ruled that they get a chance to appeal that action.

The Commonwealth of Pennsylvania had argued that since the previous ruling stripped the board of all power (except the power to tax), they did not have the power to appeal being stripped of their power. The stakes are high because the receiver appointed by the state has already made it clear that his plan is to hand York schools, lock, stock and barrel, to for-profit charter operator Charter Schools USA.

The appeal process will take a while. Specifically, it will take more than enough time for all education-related eyes in the state to turn toward Harrisburg and say," Well......?"

New governors don't always get a chance to be tested right out of the gate, but that's where Tom Wolf finds himself now. Wolf has been pretty quiet on the subject, and only spoke up in opposition when 1) it looked like some teacher support would help his electoral chances and 2) reporter Colleen Kennedy called him out. From Wolf's perspective, this is a big fraught mess-- his home town, his old friends, his new alliances, and his education stance as governor are all tied to this mess.

Come January 20th, Wolf's office could put the kibosh on this state sponsored yard sale of local school power and property, or he could do nothing, or he could put corporate interests ahead of local ones. He has no choice but to show us what kind of education governor he's going to be. Unfortunately, the final line of pennlive's coverage of the story yesterday is this:

A Wolf spokesman did not respond to messages seeking comment on the governor's plans.

The Shafting of York, PA: Round One

Merry Christmas to the teachers, taxpayers, students, parents and elected school board of York, PA. Today Stephen P. Linebaugh, President Judge of the 19th Judicial District of Pennsylvania ruled that the state may go ahead with takeover of York Schools. Well, not so much "take over" as "hand over to a for-profit charter school company with a dubious track record in Florida." A lump of coal would have been an improvement. York is one step closer to being the first district in the country state  converted straight to full charter takeover. [Correction-- York will be the first all charter in PA, but not the nation. But they will be the only all-charter currently operating in the nation.]

Here are some of the salient points to keep in mind as this story continues to unfold (because appeals are going to be filed with all the quickness, you may be sure).

Why is York's school problem, anyway?

Money. York is an exceptionally poor district, and under Tom Corbett, poor schools took an enormous hit. In Pennsylvania, public schools depend a great degree on local funding, with the state historically kicking in a little extra based on just how poor the district might be. PA schools took a one-two punch over the past six or seven years. First, previous Governor Ed Rendell (D) took the stimulus money and did just what he wasn't supposed to-- he used it to fund schools. Second, when Corbett arrived and the stimulus money left, he did not replace it. The biggest cuts of state funding happened in the poorest districts (you can visit Philly for further demonstrations of how this is working out). In 2012, York had 15% of its budget-- $8.4 million-- cut by the state.

So the state took over, anointing David Meckley Grand High Recovery Officer of the district. And it turns out that Meckley loves him some charters.And now the state (rather quickly-- as if they were working against some sort of deadline) wants to upgrade him to Receiver. Others disagree. And so, court.

So why is the state taking over?

Surprise-- this is not even the kind of academic takeover turnaround we keep hearing about from reformsters. Pennsylvania put York into Recovery Purgatory for financial hardship.

While the state's proposed receiver is making noises about improving student test scores and the district's standing in the state, academics are not what got the state involved in the first place. This is about the benjamins. If you want to see how raw and simple the conversion to Full Charter Ownership can be, here it is. Have your state government cut education budgets, then have the same government take over the school district because it is too financially strapped (because the state cut their budget). The only way to make it simpler would be for state governments to say, "We are going to give your district to a charter company because we want to." If you want to take a more detailed look at this maneuver, I recommend this post from Jersey Jazzman.

Why do they want to upgrade to receivership? Because recoveryship isn't working? Because the teachers aren't cooperating? Because PA will have a new governor at the end of the month? Pick your favorite.

What did the judge's ruling say?

The full text of the ruling is attached to this story, but I can hit some of the highlights for you.

In the discussion, the judge defined the issue as whether or not the Secretary's call for a Receiver was arbitrary, capricious, or wholly irrelevant to the financial recovery of the district. "The issues was not," he said, "what action the Receiver would take if appointed by the court."

That's a critical issue because everybody knows what action the Receiver intends to take-- handing over the district, lock, stock and barrel, to for-profit corporation Charter Schools USA. And while the future plans might have a teensy bit of bearing on the case, "It is not for the court to determine whether or not it is the best plan or even a good plan for the District. That is a determination to be made by the Receiver." The ruling's list of Receiver powers indicates that he can do pretty much any damn thing he wants without being answerable to anybody.

In the judge's opinion, the state followed the rules when calling for receivership. The school district meets some basic standards of the law (minimum 7500 students, for example) and it did some things that were not in line with the Recovery Plan that was in place (failing to get its teacher union to accept a contract with massive cuts, for example).

So the judge's basic ruling, as I read it, is that the state may or may not have a good idea about how to run the schools, but it followed its rules in doing so.

Charter Schools USA is a poster child for everything wrong with charters

Local news took a quick look at what charter operation would mean. By asking the charter operators. Guess what-- it will be awesome!

Spokeswoman, Paula Jackson, says the company has a history of turning around struggling schools. Over the span of three years all schools the company has taken over have improved to a satisfactory score. She says turning York City schools around would be nothing new.

“Look we’ve been through this, this is what we have to offer, we’re here to help. Whatever we can do to support you and your students to get them out of being 499 out of 500, we believe in these kids,” says Jackson.

I particularly appreciate how Jackson believes in these kids that they've never met and don't actually know. Perhaps she means that the company believes that these kids exist and will make them a butt-load of money.

Remember, for-profit charter is the very definition of a zero-sum game-- every dollar spent on students is a dollar the company doesn't get to keep. What could be better than a school system in which students are a cost to be control, little human money hemorrhages that must be cauterized and clipped.

Apparently, many things could be better. Charter Schools USA operate in Florida, where the League of Women Voters conducted a one-year study of charters. Turns out Charter Schools USA make use of one of the great profit-making arms of charterdom-- real estate. Here's League Education Chair Patricia Hall talking about how it works:

Our shining local examples in Hillsborough County are owned by Charter Schools USA. My first glimpse of Winthrop Charter School in Riverview in November of 2011 was during a scheduled visit with then Rep. Rachel Burgin. When told the two story brick building was a charter school, I was mystified. The site on which it was built was purchased from John Sullivan by Ryan Construction Company, Minneapolis, MN. From research done by the League of Women Voters of Florida all school building purchases ultimately owned and managed by for-profit Charter Schools USA are initiated by Ryan Construction. The Winthrop site was sold to Ryan Co. in March, 2011 for $2,206,700. In September, 2011 the completed 50,000 square foot building was sold to Red Apple Development Company, LLC for $9,300,000 titled as are all schools managed by Charter Schools USA. Red Apple Development is the school development arm of Charter Schools USA. We, tax payers of Hillsborough County, have paid $969,000 and $988,380 for the last two years to Charter Schools USA in lease fees!

CSUSA has been in business since 1997. Its head honcho, Johnathan Hage, bounced around before taking a last bank shot off the Heritage Foundation in DC and ending up in Florida as a Bush Buddy at Foundations for Florida Future. When Florida passed a charter law in 1996, Hage was right there to jump on the wave. And he was riding it in Indianapolis with Tony Bennett, another Friend Indebted to Bush, where a few million dollars just kind of went missing. Florida charter biz has been big money, little oversight for years, and Hage and CSUSA have been doing just fine.


This might be a dumb move for CSUSA

CSUSA boasts about spending little money on students and getting good test results. They like uniforms. They like structure. And they like requiring "merit pay" for teachers. But this still might be a bad move for them.

The problem with having a charter take over an entire city school system is that it leaves them with no dumping ground. All modern charter success stories depend on one thing-- a dumping ground for students who will hurt the numbers. Students who cost too much to teach because they have one special need or another. Students who are behavior problems. Students who get low test scores. Students who don't show an aptitude for picking up English. Modern charter success stories require a place to dump all of the problem children. Charters depend on attrition, but if they own the whole city system, where will students attrit to?

If CSUSA takes all of York schools, what will they do with the problem students. They will, of course, devote plenty of everyone's time to test prep. But if this is going to work for them, they'll need a dumping ground for students who can not or will not respond well to a steady diet of test prep. These guys have been at this for a while so either A) they've started believing their own PR or B) they've already figured out a solution. In which case, keep your eyes open for the Dumping Ground Loophole in their proposal.

And here's the other part of their problem:

Nobody wants this

Virtually every sector of the York community has spoken out against this move. That includes the elected school board, the teachers union, various members of the taxpaying public-- and it includes York's most prominent native son, the governor-elect of Pennsylvania, Tom Wolf. Do you suppose it means anything that we've been trying to ram this through in the last weeks before Wolf takes office? I would like to think it does, but the Receiver is an old friend of Wolf's, and his charter sell-out plan didn't get a squawk from candidate Wolf until journalist Colleen Kennedy stirred up some noise.

I am particularly curious about the teaching staff. CSUSA prefers the merit pay model, favored by pretty much nobody who has experienced it. What would happen if CSUSA were unable to fully staff its schools? They are claiming they can produce more resources and staff down the line, but what makes them think they can do it.

We're not done yet

I assume that the state teachers' union had their appeal already written with a finger on the "send" key before the ink was even dry on today's ruling. So there will be more court shenanigans.

In the meantime, Pennsylvania has a really lousy but quite active cyber-schooling sector. A bad upholding of this lousy decision could touch off a head-to-head battle between charters, as angry parents pull their students to get online instead.

But make no mistake-- this is not good news. It's particularly bad news if you are in PA's other high-poverty districts. If it becomes this easy, this simple for a state to simply hand a school district to a for-profit charter, then in the long run, nobody is safe. Well, except all the people running those charter corporations, cheerfully converting public tax dollars to private profits.

If you care about public education, you may not know much about York, PA, but I'll bet that before too long, you'll know plenty about the decisions that are made there.