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Greg Mild, Columbus Education Association

"Community" Schools are Stealing Your Taxes

This note has been brewing ever since Governor Kasich's budget announcement. This may

seem like random statistics to some, but just think about how these all piece together to inhibitthe positive growth of the local school districts in Ohio. From the skewed school funding modelto the misapplied term "community" to the fact that taxpayers are being misled about where theirmoney is being sent, the entire system is corrupt. And when Republican legislators complainthat school unions are "unelected individuals" making decisions about public monies, remindthem of how the funding of community schools redirects your tax dollars to "unelectedindividuals." (The question of "unelected individuals" affecting tax dollars was repeatedly askedof witnesses by Representative Coley during the March 14, 2011, House Commerce and LaborCommittee hearing.)

ALL statistics used in this note have been pulled directly from the Ohio Department of Educationwebsite unless otherwise noted.

First, let's talk about the community schools that exist in Ohio. Some schools are sponsored bylocal districts allowing the district to fund unique initiatives with some more "flexibility" in stateoversight. The large majority of community schools are sponsored by non-profit entities andmanaged by for-profit companies.

Total community schools in Ohio: 339Number of counties with a sponsored community school: 37 (out of 88)Number of counties with a sponsor that is not a local school district: 23Number of community schools in eight counties: 265 (Franklin, Cuyahoga, Lucas, Montgomery,Hamilton, Summit, Mahoning, Lorain)

To recap, we have for-profit community schools in only 23 out of 88 counties in Ohio and 78% ofthose schools are concentrated in only eight of those counties. Would you be surprised to findthose counties surrounding our major cities? Here's a map: http://www.digital-topo-maps.com/county-map/ohio.shtml

Let's look at some of our top sponsors:

Buckeye Community Hope Foundation: 39 schools in 9 different counties"BCHF seeks to foster and nurture productive relationships with Ohio community schools,providing ongoing guidance and professional oversight geared toward the success ofcommunity schools and their students. Realizing that community schools must be botheducationally and fiscally sound, BCHF brings to its sponsorship role an unparalleledunderstanding of both teaching and the business of teaching. It is uniquely qualified to assistoperators of community schools in creating educational systems that are both effective and self-sufficient." (http://www.buckeyehope.org/)Did you catch that? Buckeye Hope doesn't actually operate the schools. Theysponsorotherorganizations to help run the schools. Follow the money . . .

Educational Resource Consultants of Ohio, Inc: 23 schools in 5 counties"ERCO HISTORY

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ERCO was founded in February 2005. We are an educational consulting firm that specializes inauthorizing community schools." (http://www.ercoinc.org/aboutus.html)That's it. That's their complete history. A member of their 6-man advisory board includes thisinformation in his bio: "James Brown has been the administrator of Life Skills Center Daytonsince it was established in 2005 and this school was recently selected as the model schoolwithin the White Hat Management Organization." You'll also notice that theseconsultants help

get the schools up and running for an additional organization to actually run the schools. Followthe money . . .

Kids Count of Dayton, Inc: 12 schools in 3 counties"Wright Dunbar, a school in Academic Emergency the previous year was suspended during theyear for violating the academic standards of Community Schools. The suspension was lifted inearly 2007 however; the school did not reopen for the remainder of the academic school year.Kids Count, made continuous contacts to secure all records and assets of that school with nosuccess." Kids Count of Dayton, Inc., Sponsorship Annual Report, 2006-2007"Kids Count of Dayton, Inc., which sponsors nine schools around the state, was given 45 daysby Taylor to submit a written plan to assist the school to prepare its documents for an audit. KidsCount also is prevented from opening any new charter schools as long as Montessori

Renaissance Experiences books remain unauditable." Dayton Daily News, 3/17/2008.But rest assured:

"Kids Count of Dayton is a non-profit organization and therefore does not profit from itsbusiness."

"The office was staffed with an executive director, administrative assistant, and threeconsultants in the areas of curriculum, finance, and governance."

"Personnel Costs: $460,586; Benefits $92,117"

And finally, why does Kids Count ofDayton have half of its schools in Cincinnati and Columbus?Follow the money . . .

Lucas County Educational Service Center: 67 schools in 16 counties

I repeat, the Lucas CountyESC sponsors community schools in 16 different counties. Only 10of the schools are actually located in Lucas County.

There isn't much to add about this one except to once again point out the obvious that they donot operate these buildings. Their staff of 12 consultants simply take their cut as they getpermission from the state and then turn over the reigns of the school to any number of differentcompanies (at least 16 by my count). The most common company is Summit Academy Schools(http://www.summitacademies.com/) who incidentally also have three schools sponsored by theaforementioned Kids Count of Dayton. The Lucas County ESC website is devoid of meaningfulinformation (http://www.lucas.k12.oh.us/index.php?section=30).

Ohio Council of Community Schools: 39 schools in 10 counties"Ohio Council of Community Schools, established in 1999, is a not-for-profit organizationresponsible for issuing and overseeing charters for Community Schools throughout Ohio. TheseCharters serves as contractual agreements regarding schools standards, budgets, andoperating principles. We are proven and experienced, and provide charters to numerousCommunity Schools across the state." (http://www.ohioschools.org/)

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OCCS is based out of Toledo and partners with 8 school management companies, 6 of whomare based out-of-state. Follow the money . . .

And finally, mypersonalfavorite:

St. Aloysius Orphanage: 42 schools in 10 countiesI honestly was unaware that we had so many orphans in Ohio.

"St. Aloysius shares your desire to create a better life for children and families in our communitythrough education. We can help you start a school without having to balance the needs oftraditional school systems and teachers unions.We contract with Charter School Specialists to provide you with a high quality team toaddress and meet the needs of existing and new community schools. For more informationabout our charter school sponsorship program please contact us at 513-242-7600."(http://www.staloysiuscincinnati.org/charter_school.htm)

Charter School Specialists is a link that takes you to . . .

"Charter School Specialists was founded in 2004 by Dave L. Cash after workingextensively at the Ohio Department of Education as an Education Consultant for charterschools throughout Ohio. Previously Mr. Cash served as a Principal for eight yearsworking with urban at-risk children. Today, Charter School Specialists employs overfifteen experts in various education and financial disciplines specializing in charterschools.At Charter School Specialists we assist developers, education managementorganizations, and school districts. Our team provides technical assistance related to thedevelopment of charter school applications and contracts; and guides developersthrough the charter school start-up process. We provide technical assistance to charterschools from pre-operation planning, through early operations, and ongoing schoolimprovement and data management.

Charter School Specialists has assisted in the successful development andimplementation of over 80 schools. We have a stellar reputation in the charter schoolmovement and exist to provide value to the school choice public education system."(http://www.charterschoolspec.com/)

For the record, Dave L. Cash does not hold any educator certificate or license in the state ofOhio. This is easily verified through the Ohio Department of Education website.

Secondly, while the other sponsors I've mentioned sponsor a company that runs the school, St.Aloysius actually seems to sponsor a sponsor, who then sponsors a company to run the school.St. Aloysius is a registered 501(c)3 (non-profit organization), but Charter School Specialists is a

Limited Liability Company (LLC). With the exception of ERCO which doesn't claim to be a

company, but a group of consultants, all of the others I've mentioned are considered non-profits.In this last case, however, we have a for-profit company sponsoring for-profit companies.Follow the money . . .

THE MONEY

It is widely known that Ohio's school funding model has been ruled unconstitutional. It isprobably less widely understood that Ohio distributes tax dollars inequitably across school

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districts. There is a state average, but the amount that is used to provide state funding hascomplex factors which include the ability of a local district to raise revenue and a mix of specialeducation factors. In FY09, for instance, the Olentangy Local School District received per pupilstate revenue of $1,573.00, while the East Cleveland City School District received per pupilstate revenue of $10,044. I certainly think the case can be made on either side of that gap toquestion the fairness, but neither district represents the lowest or highest percentage of per

pupil revenue in the state. Likewise, it can get murky when trying to compare two districts thatmy be very different in terms of local economics.

Instead, let's look at the distribution of state tax dollars to community schools and theirsurrounding school districts. Dollar amounts are from Ohio Department of Education FY09.

Franklin County includes 16 local school districts with an average per pupil state revenue of$3,957.94. New Albany-Plain Local SD is the lowest at $1,673.00 and Whitehall City SD is thehighest at $6,254.00.

Community schools in Franklin County received an average per pupil state revenue of$9,416.81. Life Skills Center of Columbus North is the lowest at $6,011.67 and Noble

Academy-Columbus at $65,376.66. That is not a misprint. The Ohio Department of Educationreports the as the per pupil revenue number for Noble Academy. I'm willing to consider thatnumber as being a data quirk, but what about the next five highest amounts?

$14,369.93 -- Scholarts Preparatory School and Career Center for Children$15,471.46 -- Summit Academy Middle School-Columbus$16,550.01 -- FCI Academy$21,396.76 -- Summit Academy Transition High School Columbus$28,902.61 -- Oakstone Community School

Could these all be quirks? In fact, 49 Franklin County community schools are reported to havereceived state revenue in excess of Whitehall City SD's amount. To clarify, on average, a

Franklin County community school is paid $5458.87 more per pupil, overtwice the amount thatlocal school districts receive. Where does that money come from? It is deducted from theamounts the school districts receive. The state sets the per pupil "foundation" funding amountand then reduces the amount paid to districts by imposing a charge off (accounts for growthin property value) that results in the district receiving approximately 40% of the foundationamount. Community schools are funded in a slightly different way.

"Community school students are counted as part of the funded enrollment base forschool districts and payments to community schools are deducted from the foundationpayment of the school district where the community school student resides."(http://education.ohio.gov/GD/Templates/Pages/ODE/ODEDetail.aspx?page=3&TopicRelationID=998&ContentID=79172&Content=100496)

What this means is that the community school is paid the full foundation amount for eachstudent. Have you heard the argument that community schools don't receive local taxes?Technically that's true, but local districts are equally penalized by the state for receiving those

taxes, so it's essentially equalized through the state funding process.

Another very important piece of information that I don't want to lose is the flow of money.Community school students are calculated into the full funding amount (enrollment base)allocated to a district. Once that full amount is calculated, then the payments are made to the

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community schools and districts. The state counts the funding against the local district. Whilethe community schools received 100% of the per pupil amount, districts only receive theirfunding after the charge off, approximately 42% of the per pupil amount. These are statetaxpayer dollars. Follow the money . . .

As I mentioned above, East Cleveland City SD received the highest per pupil revenue amount inOhio. By comparison, 45 community schools across the state received per pupil revenue inexcess of $11,000.

Which sponsors are receiving the bulk of our taxes? Average per pupil amounts are listedbelow.

$9,891.35 - Buckeye Community Hope Foundation$7,140.72 - Educational Resource Consultants of Ohio, Inc.$11,656.79 - Kids Count of Dayton, Inc$12,096.12 - Lucas County Educational Service Center$7,901.98 - Ohio Council of Community Schools

$7,815.31 - St. Aloysius Orphanage

For comparison, the average for school districts in Ohio's major counties where thesecommunity schools operate.

$4,076.68 - Cuyahoga County school districts$7,972.16 - Cuyahoga County community schools

$3,957.94 - Franklin County school districts$9,416.81 - Franklin County community schools

$3,898.18 - Hamilton County school districts

$8,222.72 - Hamilton County community schools

$4,140.14 - Lorain County school districts$10,563.52 - Lorain County community schools

$3,764.38 - Lucas County school districts$10,674.71 - Lucas County community schools

$4,733.93 - Mahoning County school districts$9,973.40 - Mahoning County community schools

$4,903.56 - Montgomery County school districts

$9,303.61 - Montgomery County community schools

$3,724.82 - Summit County school districts$9,345.75 - Summit County community schools

These numbers represent YOUR state tax dollars at work. Follow the money . . .

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And finally, when someone challenges you by saying that community schools don't receive anyfederal funding, mention that the Ohio Department of Education distributed:

Federal Charter School Grantfunds to community schools in Ohio:$13,127,140.81 in FY08$9,631,732.50 in FY09

$10,442,565.76 in FY10Including a top award of $550,000.00 each to five different schools.

Consolidated Federal Title Funds$78,347,226.27 in FY08$92,282,995.69 in FY09$105,835,747.65 in FY10

ARRA Federal Title Funds$69,548,505.52 in FY10

FOLLOWTHEMONEY . . .