Funding controversies hammer virtual schools

According to education analysts, the number of students attending school in a completely online environment has grown exponentially in the past few years. Despite a growing acceptance of virtual education as a viable means of schooling, however, many states are still struggling with questions such as how much to fund these projects, who should provide the instruction–and who should foot the bill.

In just the past few weeks, for example, teachers unions in Minnesota and Wisconsin have sued to block online charter schools from operating in those states; operators of an online school in Idaho have petitioned the state for more funding, saying the per-pupil expenditure that Idaho allows for virtual schooling is inadequate; and Florida’s top financial officer is examining the state’s contract with two companies running virtual schools in the Sunshine State for possible violations of state law.

In all of these cases, the schools in question are partnerships between public K-12 school systems and private, for-profit virtual schooling companies. Education observers say it’s the idea these companies are profiting from public tax dollars–and siphoning them from brick-and-mortar schools in the process–that is the real issue.

Competition for funds

In Minnesota, the state’s teachers union filed a lawsuit Oct. 9 to shut down the Minnesota Virtual Academy, an online charter school operated by the Houston, Minn., school district. The lawsuit contends that the school violates state law because it relies on parents instead of teachers to deliver day-to-day instruction. But observers say the underlying reason for the lawsuit is the belief by the school’s critics that it amounts to a public subsidy for home schooling.

The academy has attracted such strong interest, largely from home schoolers, that it has had to turn away hundreds of students for lack of funds. It offers a curriculum directed by K12 Inc., a Virginia-based company founded by former U.S. Education Secretary William Bennett, author of “The Book of Virtues.”

Coursework is directed by mail or online, and the academy’s web site notes that “responsible adults (usually parents) guide students through their daily coursework using the K12 curriculum.”

The lawsuit argues that this arrangement violates the state’s online school law, which requires that licensed teachers “must assemble and deliver instruction” to students. But Houston Superintendent Kim Ross said 10 academy teachers are available to help guide instruction and respond to parent inquiries.

The lawsuit “is diminishing the work of teachers who are employed by Minnesota Virtual Academy,” she told the St. Paul Pioneer Press for an Oct. 10 story. “It fails to recognize our licensed teachers and the quality of service they provide.”

Skeptics say the lawsuit has more to do with competition for funding than it does with the quality of instruction.

The lawsuit was filed on behalf of the Hopkins and Burnsville, Minn., school districts. Officials there say they’ve been hobbled in their own attempts to start or expand online programs–with instruction to be provided by certified teachers via eMail and chat rooms–because the Virtual Academy has consumed much of the state’s budget for virtual schools.

Minnesota lawmakers set aside $1 million to pay for public school online opportunities for those who were not previously enrolled in public school.

Union president Judy Schaubach said her organization isn’t opposed to the idea of online schools. “There are a lot of different ways to do this, and it is being done right in a lot of cases,” she said.

But she describes Houston’s program as, in essence, a public subsidy for home schooling. “Is it public education, or are we funding home schooling?” she asked rhetorically. “…What we are talking about is, what is the definition of public education?”

Using public tax money to educate home-schooled students via the internet is also the reason Florida’s top financial officer is examining the state’s contract with two companies running virtual schools for 1,000 Florida students in kindergarten through eighth grade.

The K-8 virtual school pilot projects–which officials hoped would save the state $700,000–are being reviewed as part of a broader investigation into Florida’s school voucher programs, the Palm Beach Post reported Sept. 23.

State lawmakers this spring had provided $4.8 million for the two pilot projects, but limited enrollment to students who had attended public school last year.

However, the contracts the education department awarded to Connections Academy, a division of Sylvan Learning Systems, and Florida Virtual Academy, another K12 venture, this summer allow the companies to sign up students in kindergarten and first grade who had not been enrolled in public schools last year.

The schools get $4,800 per student from the state, about $700 less than the average amount the state is spending this year on a student in a traditional school.

If all 1,000 students enrolled in the virtual schools transferred out of a public school, the state would save the difference of approximately $700,000. But if the state is instead spending $4,800 on students who would not otherwise have been enrolled in a public school, the pilot projects could end up costing the state even more money.

The department’s decision is reasonable and legal, spokeswoman Frances Marine said. By specifically creating a K-8 program, lawmakers meant for kindergarteners and some first graders without prior public school enrollment to qualify.

“Since we don’t have compulsory schooling in Florida until age six, there’s no way anyone could qualify for kindergarten or first grade otherwise,”f” Marine told the Palm Beach Post. “We believe our interpretation is correct, but we look forward to working with the legislature next spring on the language.”

In a statement, Florida Education Secretary Jim Horne said he would work to find funding through an alternate source for those kindergarteners and first graders already enrolled in the program.

“While I have no desire to carry out a pilot program that is contrary to the intent of my former Senate colleagues, my first concern is for the children enrolled in the program,” he stated. “Because of concerns about disrupting the education of currently enrolled students, I have decided to fund the kindergarten and first grade students, who will not be funded from the pilot project appropriation, from an alternate source. In addition, I will be asking the legislature during this upcoming session to rectify the anomaly of a K-8 educational program that does not fund kindergarten enrollment.”

How much is enough?

Minnesota isn’t the only state where virtual schools are being challenged now in court.

The Minnesota lawsuit follows similar efforts by the Wisconsin teacher’s union to shut down two virtual schools in that state. After a state circuit judge earlier this year dismissed a lawsuit filed by the Wisconsin Education Association Council questioning the legality of Wisconsin Connections Academy–a 300-student virtual school chartered by the Appleton, Wis., School District and run by Connections Academy–the union appealed.

But even before a decision on the appeal has been rendered, the union is proceeding with a second lawsuit against the Wisconsin Virtual School, another K12 venture chartered by the Northern Ozaukee School District.

In both lawsuits, the union claims these for-profit companies will reap huge profits from state money granted for per-pupil expenditures. These expenditures were calculated to include many services not provided under the virtual model, the union says, including funds for teacher’s aides, janitors, nurses, school psychologists, and extra-curricular activities. (See “Teachers’ union challenges legality of Wisconsin cyber school,”

According to Lucy Brown, an attorney representing the union, the organization claims that online schools can be operated for significantly less money than traditional brick-and-mortar schools-and that open-enrollment money, which comes at a premium, especially during a tough budget year, should be kept in the hands of school districts and not given away to outsiders who stand to make a profit.

Wisconsin teachers union officials are not alone in the belief that virtual schools can operate on a much lower budget than brick-and-mortar schools. The Idaho State Board of Education believes it, too. And the board is now reassessing the financial support Idaho is providing to computer-based charter schools amid a campaign put on by one such school to more than double the cash support taxpayers provide.

“Whether they should get full funding, probably not,” State Board member Karen McGee of Pocatello said. “But whether they should get more than they’re getting, they probably should.”

The Idaho Virtual Academy, which was chartered by the Butte County School District, contends it should get $2.5 million more in state support than it received during its first year of operation, the 2002-03 school year.

Officials said they received about $2,400 for each student this past year compared with what they said was $5,000 in per-student support for traditional schools.

The school claimed just under 1,000 students in kindergarten through fifth grade last year. Officials said students lived in 38 of Idaho’s 44 counties. The operation said it employed 23 certified teachers around the state to work with parents as they taught their children with curriculum provided by K12 Inc.

The state Department of Education maintains that the school has received all the money it is entitled to under state and federal law.

Spokeswoman Allison Westfall said the school appears to be affected by financing limitations typically faced by charter schools in their first year, because Idaho law requires that some funds be distributed based on information from the prior year.

But Idaho Virtual Academy Board Chairman David Gencarella said the charter is not receiving enough cash to maintain its operation.

“We’re OK for next year, but there’s no further commitment beyond 2003-04,” Gencarella said.

The virtual academy’s attorney, Brian Julian, said that although no buildings are being maintained, the school actually spends about as much per pupil as a traditional public school.

Students of the virtual academy are given computers and internet access along with other educational materials, he said, and academy teachers make personal visits all over the state to assist special education students.

“I think the state really should decide if Idaho wants to have this kind of program and develop rules to apply to them,” Julian said.

The idea that online education costs less than traditional schooling is a myth, said Charles Zogby, senior vice president of education and policy for K12 Inc.

“Lawmakers in a lot of states think this can be done on the cheap,” said Zogby. Before joining K12, Zogby served as education commissioner for Pennsylvania, a pioneer of the virtual charter school movement.

“We operate at a cost 20 to 35 percent lower than a traditional school, but we have costs that traditional schools do not have,” Zogby said of K12. For example, to complete the state assessment in Pennsylvania, he said, K12 had to rent 40 sites and hire staff to oversee the exam.

A funding model that works

In Florida, Connections Academy and Florida Virtual Academy have to compete with the Florida Virtual School (FLVS) for middle-school students. Primarily a supplementary education program (though it does supply some students’ entire education), FLVS serves as a national model for online instruction.

A small-scale experiment when it launched in 1997 with 77 students, FLVS today boasts an enrollment of more than 10,000 and climbing. To accommodate a growing number of students, the school has moved this year from a separate line item on the state’s budget to inclusion in the statewide funding formula for K-12 instruction.

As a start-up initiative, the line-item funding worked well for FLVS, said Executive Director Julie Young, because it gave the school a safe haven within the budget to establish itself without having to compete with more traditional institutions for funds.

But after experiencing exponential growth in its first five years of operation, FLVS officials realized the school was growing beyond its means.

Looking to accommodate additional students and whittle away at a waiting list of more than 2,500 names, Young-in association with Gov. Jeb Bush-recommended that the school move toward a revised funding model. Beginning this year, when a student enrolls in a class through FLVS, the school receives funding for what amounts to one-sixth of the total full-time equivalency for that student.

Unlike traditional schools, FLVS does not receive funding for a number of expenses, including transportation and capital improvements, among others. However, it does receive funding for summer school and a seventh-period class-two benefits no longer available to brick-and-mortar schools.

Young sees the move as a step in the right direction for virtual education programs. Still, she hopes one day to move toward a funding formula designed specifically for online schools.

State lawmakers “are trying to fit a square peg into a round hole by taking current [funding] models and attaching them to virtual schools,” she said. “The approach to virtual education should be different than traditional education.”

Despite now competing with traditional schools for state funding, FLVS hasn’t experienced any friction so far. Maybe this is because FLVS is primarily a supplemental instructional program, or maybe it’s because the school already is well respected among the state’s educators. In any case, lawmakers nationwide will be watching what happens in Florida and elsewhere as they struggle with how best to fund virtual schools in their own states.

See these related links:

K12 Inc.

Connections Academy

Florida Virtual School

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