Nothing to Lose: Turn Failing Schools Over to CMOs

It started as a fairly typical funding-equity lawsuit and ended with a startling Wall Street Journal headline, “Michigan City Outsources All of Its Schools.” The story, about the poor performing and all-but-bankrupt Highland Park school district, raises all kinds of questions about our nation’s public-education system. (More from Fordham’s Bianca Speranza about implications for Ohio of Highland Park’s plan here.) Why is it failing our poor children (which I wrote about last week)? Can it be fixed? Can it be fixed by turning schools over to charter-management organizations (CMOs)? And if we do turn them over to CMOs, do they have to be nonprofits?

According to a report by Jenny Ingles in the web-based Take Part, in early July the ACLU and eight students from the Highland Park school district, located just outside of Detroit, filed a class-action suit against the state because students in the district weren’t learning: On a college-ready state exam, 90 percent of the district’s eleventh graders failed the reading portion, 97 percent failed the math section, and 100 percent failed the social studies and science portions.

The suit, part of a long tradition of “adequacy and equity” litigation, argues that such failure is a violation of the state’s constitution, which mandates a public-education system. “This is not a system of public education,” says Kary Moss, the executive director of the ACLU of Michigan, about Highland Park. No kidding.

But the major difference between then and now—then being the 1970s, 1980s, and 1990s when such lawsuits resulted in court decisions ordering that states provide failing districts with more money—is that a) we now know that money doesn’t solve the problem and b) we have a vibrant and healthy charter-school sector that offers a cheaper and better alternative to litigation.

It is that second fact that Journal reporters Stephanie Banchero and Matthew Dolan explore in their “outsourcing” story. Highland Park is turning over its three schools (with 1,000 students) to the for-profit Leona Group LLC, which currently runs fifty-four schools in five states, including twenty-two in Michigan. According to the Journal, Leona’s track record is mixed—“students in almost half [of its schools] fail state academic benchmarks”—but for Highland Park, where only 22 percent of third graders pass state reading tests and 10 percent pass math, that would be a major improvement.

“This could be the new model for public education,” the Center for Education Reform’s Jeanne Allen tells the Journal. “It stands to be a lab of innovation where people can see that thinking outside the box is not so scary.”

The devil will be in the details, of course, but the big issues here are these:

  • Unions – Clearly, the freedom to hire and fire, which charter schools enjoy, is contentious. But the unions are beginning to see that LIFO and single-salary pay schedules are unsustainable. And the more that the public sees the results (in towns and neighborhoods where there is choice), the more it recognizes the fact that unions, as Al Shanker noted, represent teachers not students;
  • The business of education – Defenders of the status quo try to argue that public education is not a business and thus should operate by a different set of rules. Unfortunately, their arguments defy both reality and logic, as anyone who has been inside the system knows: Money talks just as loudly in public-school-management decisions as it does in Fortune 500 corporations and sound management practices are just as important to Highland Park as they are to Exxon;
  • To profit or not to profit – Why this should be an issue, I don’t know. But accusing reformers of wanting to turn our public schools over to private-school operators seems a bit hypocritical considering that unions (teachers, administrators, aides, etc.), which control much of our education system, are private organizations—and their members are sure interested in profiting from public schools. And then there are the profiteering contractors—busing, textbooks, etc.—which take lots of public money; and
  • Transparency – This, in fact, is the biggest challenge to every reform and improvement scheme. Even without choice, getting good information about student performance is crucial to the health of our public-school system. Though the power to choose is a substantial one, and will, in fact, provide even more incentive to keep the public informed, we must make sure that arrangements with private entities—whether they are unions or CMOs—safeguard the public’s right to know where its money is being spent.

In the end, however, the Highland Park experiment is well worth watching. As many defenders of the status quo are beginning to realize, the road to improvement cannot be paved with the same defective asphalt. In Highland Park’s case, as with so many schools and districts throughout the country, the students, at least, have nothing to lose by trying something new.

-Peter Meyer

This blog entry originally appeared on the Fordham Institute’s Board’s Eye View blog.

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