Chief Justice Suggests ECOT’s Claim for $80 million is “absurd”
It’s tough to imagine a worse day for a lawyer than one where a Chief Justice of the Ohio Supreme Court suggests in oral argument that your argument appears “absurd.” But that’s what happened to ECOT’s lawyer today.
Chief Justice Maureen O’Conner, who received $3,450 in campaign contributions from ECOT founder Bill Lager, described ECOT’s claim that the school should be paid taxpayer money for educating a student, even if that student only logs on once a month and does no work, this way: “How is that not absurd?”
Having the Chief Justice say that is bad enough. Coming from a beneficiary of ECOT’s political largess? That’s catastrophic.
But her point illuminates the exact problem with ECOT — a problem that’s occurred since the school’s inception.
ECOT has been collecting hundreds of millions of dollars since it opened in 2000 for kids they can’t prove actually engaged in educational activity. ECOT’s argument is that it should be paid as much for kids that did no work as those who they can document did 920 to 1000 hours of work. What matters is whether the kids had the opportunity to learn for at least 920 hours, not whether they actually learned for 920 hours, according to the school.
At issue is $80 million the Ohio Department of Education says the school owes taxpayers because that funding paid for kids the school couldn’t show actually engaged in any educational activity — and certainly not the 920 hour minimum required of all Ohio students. ECOT was forced to close last month because the school claims it can’t survive financially by making these payments.
The Department’s lawyer, Doug Cole, made a pretty common sense argument: You could claim expenses for years on your taxes, but if the IRS asks for receipts one year, you can’t say you’re shocked you need them now.
Also, as a reminder, the school last year received no student from a school district that performed worse overall on the state report card than ECOT. And in an astonishing 1 out of every 4 dollars sent to ECOT, the district that sent the kid to the school outperformed ECOT in every comparable report card measure. And only 109 of about 3,000 ECOT graduates in 2010 have college degrees today — an absurdly low figure for any school, especially given ECOT’s size.
It is unclear how long the Supreme Court will take to make its decision. But if I’m Bill Lager — ECOT’s founder and chief financial benefactor — I’d be worried.
As ECOT Case Goes to the Supreme Court, Here’s a Primer.
Tomorrow, ECOT will argue before the Ohio Supreme Court that taxpayers should pay the school $80 million for educating kids it can’t prove it educated the last two school years. And the Ohio Department of Education will argue that taxpayers should be reimbursed for that $80 million.
But beyond these simple sounding points, and the less simple minutiae explaining how kids should be counted as attending virtual schools, it’s important to recognize that this problem has existed since ECOT opened in the 2000-2001 school year. In fact, state audits found that for ECOT’s first five years, the school overbilled taxpayers for kids it couldn’t prove it actually educated.
Why was this allowed to happen for 17 years? Because ECOT was protected by the school’s cheerleaders in the Ohio General Assembly and statewide offices — many of whom spoke at the school’s graduation ceremonies. One of those speakers will hear ECOT’s plea for continued taxpayer funding tomorrow — Justice Terence O’Donnell, who spent most of his 2013 commencement address telling students about a conversation he had with ECOT founder and political contributor William Lager. Does it surprise you to learn that O’Donnell is the only judge who has listened to any of ECOT’s legal arguments and agreed with ECOT?
However, of the 7 current Justices, 5 — Chief Justice Maureen O’Connor, Justice Pat DeWine, Justice O’Donnell, Justice Judith French, and Justice Sharon Kennedy have received direct campaign contributions from Lager and/or ECOT related employees. That doesn’t count any of the hundreds of thousands of dollars Lager and his ECOT friends contributed to state parties and caucuses. To her credit, Justice Judith French recused herself from ECOT case last year.
Why did these politicians protect ECOT so vehemently? It couldn’t have been because the school was doing a good job — even the students ECOT could demonstrate it educated. According to state data from the 2016-2017 school year, every penny sent from a school district to ECOT last year (which was more than $100 million) came from a district that outperformed the online giant by at least 4 of 13 state report card categories. And an astonishing 1 out of every 4 dollars sent to ECOT came from a district that outperformed ECOT on every comparable measure.
This is not to say there weren’t success stories at ECOT. There were. But in the vast, overwhelming majority of cases, ECOT simply did not provide a better academic option for students than the districts they left.
And while they did graduate large numbers of students, they failed to graduate about twice as many as they actually graduated. One telling metric of their meaningful, long-term impact on kids is how many ECOT graduates had a college degree within six years of graduation.
When coupled with the fact that ECOT was charging taxpayers tens of millions of dollars to educate kids that never participated in learning at the school, it’s clear that this school was not living up to expectations academically or financially.
As we wrote last week, ECOT has generally not performed well on state metrics and have been unable to account for the children’s learning experiences, but they have been protected by powerful friends in the Ohio General Assembly and state government who benefited from ECOT founder Bill Lager’s political largess.
And now the Supreme Court will decide, essentially, whether the school should be paid for educating kids it can’t prove it educated and therefore remain open forever.
We will keep you posted throughout the day tomorrow as news trickles in about the hearing.
ECOT Survived Until this Point Because of Considerable Political Influence. Just Look at their Graduation Ceremonies.
From the beginning, ECOT was a school that had outsized influence in Ohio politics due to its founder Bill Lager’s connections and financial contributions. It was this influence that allowed the controversial school to stay open as long as it did. In no way was this clout more evident than in the political speeches made annually by Republican politicians at ECOT graduations starting in 2001.
The first ECOT graduation occurred in 2001 — the only school ever known to hold its graduation at the statehouse. The ceremony took place in the Statehouse Atrium, a fitting venue for an organization that would play such and important roll in Ohio politics for the next 17 years. The keynote speaker of this graduation was Representative Jon Peterson, a Republican from Delaware County. ECOT employees and Bill Lager would donate $2,500 to his campaigns.
The following year was the last ECOT graduation to take place at the Statehouse. It featured a speech given by Congressman Pat Tiberi. ECOT founder Bill Lager would give Tiberi’s campaigns $8,500.
2005, saw a keynote speech by Arlene Setzer, the Republican chair of the House Education Committee. ECOT founder Bill Lager and his employees would give Setzer’s campaigns $8,500.
In 2006, Attorney General Jim Petro became the first statewide elected official to speak at an ECOT graduation. ECOT founder Bill Lager and his employees would give Petro’s campaigns $67,100 and a mention in Lager’s self-published book.
Then Speaker of the House Jon Husted, provided the keynote address in 2003 and 2007. It was at his 2007 appearance that Husted was awarded an honorary degree from ECOT – the only one the school gave out in its history. ECOT founder Bill Lager and his employees would give Husted’s campaigns $36,775.
In 2008, State Senator Gary Cates, provided the keynote at ECOT’s graduation. ECOT founder Bill Lager and his employees would give Cates’ campaigns $20,000.
State Senator Mark Wagoner provided the keynote in 2009. ECOT founder Bill Lager and his employees would give Wagoner’s campaigns $10,000.
2010 saw the first national figure speak at ECOT’s graduation – former Florida Governor Jeb Bush. In 2009, Lager gave $10,000 to the Florida Republican Party and in 2003, he gave $2,000 to Bush’s brother, George W. Bush.
Governor John Kasich spoke at the 2011 graduation ceremony – his first year in office. ECOT founder Bill Lager and his employees would give Kasich and his running mate Mary Taylor’s campaigns more than $22,000.
2012 saw GOP appointed State Superintendent Stan Heffner provide the keynote. Two months later, Heffner was forced to resign for lobbying on behalf of an education company he planned to work for while serving as interim State Superintendent.
In 2013, Supreme Court Justice Terrence O’Donnell spoke at ECOT’s graduation. ECOT founder Bill Lager and his employees would give O’Donnell’s campaigns $12,650. O’Donnell has not recused himself from next week’s hearing on the ECOT matter.
Then Speaker of the House Bill Batchelder gave the keynote address in 2014. ECOT founder Bill Lager and his employees would give Batchelder’s campaigns $55,000.
Current State Auditor Dave Yost headlined ECOT’s graduation in 2015. ECOT founder Bill Lager and his employees would give Yost’s campaigns $11,500 and his 2015 transition account $7,500. That transition donation happened to be made not long before Yost backed off an audit of ECOT’s attendance records based on a whistleblower’s claims of the kind of attendance misconduct that eventually the Ohio Department of Education discovered two years — and $200 million in taxpayer payments to ECOT — later.
Speaker of the House Cliff Rosenberger provided the keynote address in 2016. ECOT founder Bill Lager and his employees would give Rosenberger’s campaigns $24,688.
2017 saw the run of politicians speaking at ECOT’s graduation come to a close. Instead, Fox News’ Tucker Carlson headlined ECOT’s graduation ceremony.
If you don’t believe that money in politics matters, ECOT founder Bill Lager and his employees would give the speakers at their graduations more than $250,000 in campaign contributions, not counting party and caucus donations.
ECOT Closes. Here is the list of the school’s greatest political patrons
Now that the Electronic Classroom of Tomorrow (ECOT) is closed, it pays to step back and understand why a school that the Ohio Department of Education didn’t approve in 1999 because it didn’t think ECOT could effectively account for its students was shut down 18 years later because … it couldn’t effectively account for its students.
So how was this 18 year, more than $1 billion in state taxpayer funded operation allowed to continue, despite
repeated signs they weren’t keeping track of their students? One of those signs included an audit by then-Auditor Betty Montgomery that showed ECOT had overbilled taxpayers every year between 2001 and 2005.
A big reason was ECOT founder William Lager’s political contributions, primarily to powerful Republican lawmakers. According to www.followthemoney.org (which tracks state and local campaign contributions from the early 1990s to present), Lager himself gave $1.2 million to primarily legislative candidates since 2000.
In fact, Lager often complimented the recipients of his largess at ECOT graduations (where many of the largest recipients spoke) and thanked them for stopping efforts to close or harm the school.
Included in those are current Attorney General Mike DeWine and Secretary of State Jon Husted. They are now running for Governor and Lieutenant Governor.
Another recipient has been current Auditor Dave Yost, who is running for Attorney General. Another is Keith Faber, who is running for Auditor. Yet another recipient is Frank LaRose, who is running for Secretary of State.
The list includes Speakers of the House, Presidents of the Senate and chairmen and chairwomen of powerful legislative committees.
And while the school is now shut down, what is clear is that the reason it remained open as long as it was was because the school had powerful allies and protectors in state government.
Here is a list of the recipients who got more than $5,000 from Lager:
Candidate Name | Lager Total | |
CHERYL L | GROSSMAN | $ 46,310 |
WILLIAM G | BATCHELDER III | $ 45,000 |
MATT | HUFFMAN | $ 45,000 |
BARBARA R | SEARS | $ 40,000 |
STEPHANIE L | KUNZE | $ 33,044 |
JIM | BUCHY | $ 31,544 |
RON | AMSTUTZ | $ 30,000 |
JOHN W | ADAMS | $ 30,000 |
CLIFF | HITE | $ 29,156 |
JON A | HUSTED | $ 27,500 |
KYLE | KOEHLER | $ 27,188 |
CLIFFORD (CLIFF) | ROSENBERGER | $ 24,688 |
BILL | COLEY | $ 22,500 |
LARRY | OBHOF | $ 22,000 |
TED | CELESTE | $ 20,670 |
MATTHEW J | DOLAN | $ 20,000 |
KEITH LLOYD | FABER | $ 19,981 |
DOROTHY K | PELANDA | $ 17,532 |
JOSH | MANDEL | $ 17,500 |
PETER J | STAUTBERG | $ 16,000 |
TOM | NIEHAUS | $ 15,500 |
CHRISTOPHER R | WIDENER | $ 15,500 |
ANDREW O | BRENNER | $ 15,032 |
DAVE | BURKE | $ 15,032 |
GARY W | CATES | $ 15,000 |
TODD A | SNITCHLER | $ 15,000 |
MIKE | DUFFEY | $ 15,000 |
KEVIN | DEWINE | $ 15,000 |
ARMOND | BUDISH | $ 15,000 |
SHANNON | JONES | $ 14,000 |
MIKE | DEWINE | $ 12,532 |
J KIRK | SCHURING | $ 12,532 |
JIM | HUGHES | $ 12,500 |
MARY | TAYLOR | $ 12,500 |
JAY P | GOYAL | $ 12,500 |
TIM | GINTER | $ 12,156 |
JEFFERY S | REZABEK | $ 12,156 |
RYAN | SMITH | $ 12,156 |
BILL | REINEKE | $ 12,156 |
MICHAEL D (MIKE) | DOVILLA | $ 12,156 |
SCOTT | OELSLAGER | $ 11,500 |
DAVID A | YOST | $ 11,395 |
THOMAS F | PATTON | $ 11,032 |
JIM | CARMICHAEL | $ 11,000 |
MATT | CARLE | $ 11,000 |
ANTHONY | DEVITIS | $ 10,500 |
TROY | BALDERSON | $ 10,000 |
THOMAS | COUSINEAU | $ 10,000 |
DEBORAH OWENS | FINK | $ 10,000 |
MARK | WAGONER | $ 10,000 |
JEFFREY A | MCCLAIN | $ 10,000 |
WILLIAM J (BILL) | SEITZ | $ 10,000 |
LARRY L | FLOWERS | $ 10,000 |
JAY | HOTTINGER | $ 10,000 |
MICHAEL | KEENAN | $ 10,000 |
FRANK | LAROSE | $ 8,000 |
RANDALL | GARDNER | $ 7,750 |
BOB | PETERSON | $ 7,500 |
THOMAS | RAGA | $ 7,500 |
JIM & JOY PADGETT | PETRO | $ 7,500 |
CHARLES | CALVERT | $ 6,000 |
TIMOTHY S | DERICKSON | $ 6,000 |
MARK J | ROMANCHUK | $ 5,500 |
TODD M | MCKENNEY | $ 5,000 |
LYNN R | WACHTMANN | $ 5,000 |
GERALD L | STEBELTON | $ 5,000 |
TONY | BURKLEY | $ 5,000 |
JEFF | KRABILL | $ 5,000 |
TERRY A | JOHNSON | $ 5,000 |
DOUG | GREEN | $ 5,000 |
SARAH M | LATOURETTE | $ 5,000 |
BRIAN D | HILL | $ 5,000 |
LOUIS W | BLESSING JR | $ 5,000 |
TIM W | BROWN | $ 5,000 |
MATTHEW A | SZOLLOSI | $ 5,000 |
ROBERT TAFT & JENNETTE B BRADLEY | $ 5,000 | |
JAMES L | BUTLER JR | $ 5,000 |
Want to be a Highly Rated Ohio Charter School Authorizer? Here’s How.
When the Ohio General Assembly passed historic Charter School Reform in 2015, the state’s new Charter School Sponsor accountability system was touted as a key to improving Ohio’s nationally ridiculed charter school funding system.
The idea was if sponsors (authorizers in any other state) had to actually ensure their schools were effectively educating students, then the sponsors would drop poor performing schools, cleaning the market of Ohio’s worst performing charter schools.
But that hasn’t exactly happened. There are fewer charter schools operating today than when the legislation was passed, but that has been primarily because new schools haven’t opened at nearly the pre-reform rates, which would typically make up for the closed schools.
As you can see, in the two full school years after Ohio’s charter reform legislation, fewer charter schools have closed than in the two years prior to the legislation. While the closures tend to be more high-profile given the media’s heightened sensitivity to charter schools, closures are slightly down since the legislation passed.
Why is this, given the law’s clear intent to force sponsors to be more vigilant over their schools’ performance?
Well, it’s because the charter sponsor evaluation system is deeply flawed, vastly overrating a sponsor’s ability to fill out paperwork over a sponsor’s ability to ensure students are learning at their schools.
In addition, sponsors have realized that if they are able to sponsor more dropout recovery schools, whose accountability system is notoriously lax, they’ll be able to hide their regular schools’ mostly poor academic performance.
Overall, dropout recovery schools rate about twice as high on their academic ratings as regular charter schools. In addition, their weighted ratings (which accounts for how many students attend the schools and are aggregated for a sponsor’s overall academic rating) are about 10 times higher than a typical Ohio charter school — still very low, but not quite as low.
This despite the fact the average dropout recovery school doesn’t graduate even 1 out of 4 of its students on time.
So these things are like gold to a charter school sponsor. And if you don’t have any in your portfolio, you’re behind the eight-ball.
Of the nine Ohio charter school sponsors that had zero dropout recovery schools under their purview last school year, five were rated ineffective or poor, meaning they could be forced as early as next school year to give up sponsoring charter schools.
This dovetails with the incongruity of a sponsor like Scioto County Career Technical Center, which is one of only eight sponsors to earn an A academic grade, being rated as one of the state’s worst charter school sponsors because it didn’t meet the state’s bureaucratic requirements. Their Poor rating means that one of the state’s highest performing academic charter sponsors would not be allowed to sponsor schools next school year, assuming they lose any appeals.
This result was not what the sponsor evaluation system was supposed to accomplish.
The state needs to fix this flawed system, weighting sponsors’ academic performance more heavily than its bureaucratic components. Instead of all three counting the same, I would like to see academics count as one-half of the grade with the other two counting 25 percent each. That’s better than the current system only counting academics as one-third of a sponsor’s grade.
It should also be impossible to be rated an effective sponsor unless your academic component is at least a C. Nor should you be rated ineffective if your academic rating is a B or A.
What should matter to policymakers is what the children who attend schools under these sponsors’ aegis are learning, not how well the sponsors’ adults fill out forms.
Though I could be wrong.
School Funding Comparison: District by District Budget Impacts
Now that the state budget has been put to bed, complete with Gov. John Kasich’s veto, we can finally tell how kids in Ohio’s 600 plus school districts have done during Kasich’s eight years in office.
The results aren’t good. Because Kasich drastically cut and all but eliminated essential revenue streams for children in public school districts, they will have more than $900 million fewer in this biennium than they had during the Great Recession biennium of 2010-2011.
These projections are available now in our Comparing School Funding database, based on all state revenue sent to districts.
Comparing school funding levels – 2010 vs. 2018
The bottom line is Ohio’s school districts will receive $903 million fewer over the next two years than they received during the two years budgeted at the height of the Great Recession, adjusted for inflation. In the 2018-2019 school year alone, districts will receive $492.7 million less. While it is true that the state aid line item is the highest it’s ever been, Kasich and his legislative allies’ decision to abruptly end reimbursement payments to school districts for lost tangible personal property tax and public utility tax revenues (from tax reforms that have not resulted in appreciably more Ohio jobs), as well as their refusal to replace federal funding meant to prop up state budgets during the Great Recession’s steep state revenue declines have meant that overall state funding to schools has, in reality, plummeted during the last eight years.Impacts of Privatization
None of this cut includes the significant increase in funding to school privatization efforts in just the last six years – a more than 27 percent increase to state aid transfers from school districts to privately run charter schools and a whopping 205 percent increase in state funding deductions from school districts to private school vouchers– that also remove significant sums of state dollars from school district bottom lines.Bottom Line
In constant dollars, about 2 out of every 3 Ohio school districts will receive less total aid from the state this next two years than they did from the budget passed during the height of the Great Recession.Biggest Losers
The biggest loser by far is the Cleveland Municipal School District, which is receiving a whopping $170 million fewer over the next two years. That’s about the same amount cut as the top 20 gaining districts will receive combined. Remember that Gov. John Kasich has insisted that Cleveland make drastic changes or face state take over. Clearly, he has asked that while removing significant sums of state dollars from the district, making any success the Cleveland Plan is having a minor miracle and a testament to the teachers and district leaders working together with far less state support than ever (for a detailed look at the Cleveland Plan, read our report). Also of note is that Northern Local School District in Perry County, which was the district that originally sued the state in 1991 because it had to rely too much on property taxes – a premise the Ohio Supreme Court ruled four times was an unconstitutional way to fund schools – will receive $5.7 million fewer over the next two years, forcing Northern Local to (you guessed it) rely more on property taxes.Consequences
The state’s historic, 8-year step back from the education funding table has led to property owners paying more property taxes than ever to educate their community’s children, and at higher rates. Meanwhile, Ohio’s national, overall education rating has dropped from 5th to 22nd.Private School Vouchers: The Ohio Lesson
As the Ohio House Education Committee is expected to amend a “Private School Vouchers For All” bill this afternoon, Innovation Ohio has released a detailed analysis of the current voucher system and its impact on students.
Twenty years of data show that lawmakers should be re-examining the current private school voucher system instead of exponentially expanding it, as Senate Bill 85 and its companion House Bill 200 would do. Any proposed expansion could have ruinous effects on kids and families in both voucher schools and local public schools.
Voucher expansion isn’t just here in Ohio. In President Trump’s proposed budget released in March, he and his Education Secretary Betsy DeVos have proposed a $1.4 billion voucher expansion nationwide beginning this fall, with an eye toward expanding it to $20 billion. Lawmakers in Columbus and Washington must take heed of Ohio’s experience before the ideologues further push their misguided and failing voucher agenda.
Among the data revealed in the new Innovation Ohio report:
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- Vouchers now affect children in 83% of Ohio’s school districts.
- This year, more than $310 million in public money will be sent to private, mostly religious schools through vouchers.
- Including additional direct state payments and reimbursements made to private, mostly religious schools, more than $568 million in Ohio taxpayer money is going to support these schools.
- Every Ohio student not taking a voucher, on average, loses $63 a year in state funding.
- Local taxpayers subsidize vouchers with $105 million in locally raised money to make up for districts losing state funding to Ohio’s voucher programs.
- Students who take vouchers perform worse than their public school peers on state assessments Some of the highest performing school districts in the state lose money and students to vouchers, turning the original intent of the program on its head.
Voucher expansion isn’t just here in Ohio. In President Trump’s proposed budget released in March, he and his Education Secretary Betsy DeVos have proposed a $1.4 billion voucher expansion nationwide beginning this fall, with an eye toward expanding it to $20 billion. Lawmakers in Columbus and Washington must take heed of Ohio’s experience before the ideologues further push their misguided and failing voucher agenda.
IO on the Budget: School District Funding in House Budget Proposal
Now that the Ohio House of Representatives has passed its (unbalanced) budget, new district-by-district funding projections for the 2018-2019 biennium have also been released. And, while the numbers are slightly better than the original proposal contained in Gov. John Kasich’s budget, overall, school funding remains far behind where it was for children in public school districts during the Great Recession.
These projections — available now in our Comparing School Funding database — are based on all state revenue sent to districts, not just state aid.
Some of the highlights (all Great Recession data is inflation-adjusted):
- The House-passed version is $828.6 million short over the biennium compared with the state fiscal year (SFY) 2010-2011 biennium, at the depths of the Great Recession
- In all, 395 Ohio districts will get less funding in 2018-2019, adjusted for inflation, than in 2010-2011
- In 2019, the second year of the budget, districts will receive $447 million less than they received in 2011.
- 403 districts will see a funding drop in 2019 compared to 2011.
- Cleveland loses $168 million over biennium and is $90 million short in second year.
- The average Ohio district gets $1.3 million less over the 2018-2019 biennium, and $736,000 less in 2019 alone.
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