If passed in its existing form, John Kasich’s budget will result in large cuts to public schools and large increases in funding to charter schools. Supporters of charter schools will defend this choice claiming charter schools are providing the same – or better – educational opportunities for kids compared to public schools. They will also claim charter schools operate at a much lower cost to the taxpayer. But both claims are completely untrue.

Kasich will tell you he wants to spend “more dollars in the classroom” and that he wants to “improve our schools”, but charter schools in Ohio have a bad track record in both areas. Not only do charter schools perform MUCH worse than public schools, they also cost much more per-pupil. And in the case of schools managed by for-profit companies, a huge percentage of the money they receive from the state goes directly to the corporations that manage the schools instead of into the classroom.

As we pointed out last week Ohio’s charter schools actually receive 2.5 times MORE in per-pupil funding than public schools. And a study by Innovation Ohio, charter schools are way less effective at educating students than public schools:

“only 21 percent of charter schools rate effective or better … Meanwhile … 72 percent of traditional school buildings and 88 percent of traditional school districts rate effective or better on the state report card. In fact, 46 percent of public school buildings rate Excellent (A) or Excellent with Distinction (A+), while 45 percent of charter schools rate in Academic Watch (D) or Academic Emergency (F) – success rates that are almost exactly opposite one another”


While there certainly are some charter schools out there doing good work, the majority are poorly serving the students they have been entrusted to teach while costing the taxpayers tons of extra cash. For-profit schools run by companies like White Hat and K12 take it a step further. Not only are many of these schools under performing, but all of them take much needed money away from public schools and out of the pockets of taxpayers and turn it into profit for the management company at the expense of their students.

The techniques these for-profit charters use to squeeze revenue out of their schools make a great deal of sense in the world of business: increased class size, lower labor costs, aggressive growth through advertising and marketing. But in the world of education, they can be absolutely disastrous for the students.

One of the most egregious offenders of putting profits before students is the Ohio Virtual Academy (OHVA), a high-growth, for-profit, online charter school that performs amazingly well as a business – but very poorly as an educator.

OHVA is managed by K12, a publicly traded company whose stock hit a 52-week high last week. Operations at OHVA are structured like a business instead of an educational institution and this is no accident. OHVA is setup to make money.

Ohio Virtual Academy is currently the 28th largest school district in Ohio. It is larger than Springfield and Youngstown school districts and it has grown 243% over the last five years, from 3,161 to 7,687 students. That growth is intentional. In the business world, growth = profits.

Even OHVA’s 7-member board is composed almost entirely of business and marketing professionals, and has only one individual with an education background. Three of the members have degrees in marketing and two have business degrees. And one is a beauty pageant coach with a degree in musical theater.

The problem here is not that OHVA has created a successfully operating business – which they absolutely have. The problem is that they have created this business when they were SUPPOSED to be creating a school. This isn’t private sector money funding a private sector operation. It’s public money. 100% public money. Money that was supposed to be spent “in the classroom” on educating students.

And we’re not talking about chump change here. OHVA received almost 45 MILLION dollars in state money last year, and $9.4 million in federal grants. That’s $55 MILLION in public money. And a good hunk of it went right into the pockets of K12.

According to K12’s 2010 annual report, money from OHVA accounts for 10% of the company’s total revenue, which works out to be about 38.5 MILLION DOLLARS. That’s 85% of the money OHVA received from the state flowing directly back to K12.

The bulk of that money is spent in the form of “Purchased Services” i.e. services provided by K12. The average spent on purchased services statewide for all districts is 16.41%. ECOT (Electronic Classroom of Tomorrow), the largest online charter school in Ohio only spends 23% on Purchased Services. But OHVA spends 60% of their total funding on purchased services.

It really makes you wonder where the money ISN’T going.

While there is certainly some savings to be had by not having a physical school building to maintain, the bulk of OHVA’s ‘savings’ (read: revenue) is gained through staffing. When it comes to human resources the school is organized more like fast food restaurant than a place of learning.

The high school has a single principal responsible for managing a very large staff of 233 and the staff to student ratio is also extremely high: 33:1. A typical public school will be around 16:1 and a private school around 12:1, meaning each OVA teacher has twice as many students as a typical public school teacher.

You’d think, because of the large class sizes, OHVA staff would be compensated accordingly, but they aren’t. They actually earn much less than their public school counterparts: $33,064/year on average vs. $55,958 for a public school.

And these number really help the bottom line. Statewide the average school’s salaries make up about 58% of operating expenditures. But by doubling class sizes and cutting salaries nearly in half, OHVA has been able to get it’s salary expenditures down to 18.6%!

All of these numbers are great news to the stock holders of K12. But if you are one of the poorly-paid teachers responsible for three times the number of students as a private school teacher, or one of the poorly-performing students fighting for your teacher’s attention, these numbers kind of suck.

Want a take a guess how this type of cost cutting affects student performance?

  • OHVA’s state report card grade has declined each year for 4 straight years.

  • OHVA’s passing rate is 62.74%

  • OHVA’s graduation rate for 08-09 was 54.1%, ranked 744 out of 839.

    It really makes you wonder about K12’s advertising for the school. To whom are they comparing themselves? Higher test scores? More personalized attention? Really?

    The problem with OHVA and other for-profit charter schools is that their primary goal is to make money, not to educate students, and the affects of that profit-oriented approach to education are obvious in the numbers. Extremely high staff-to-management rates, extremely high student-to-teacher ratios and very low teacher pay may result in cheaper operating costs for the school and lots of extra revenue for the management company, but the students are ultimately the ones who pay the price.

    It’s exactly this kind of school that Kasich’s budget rewards with extra funding and that decision seems to fit in perfectly with his world view: decreasing pay for teachers while funneling tons of state cash to corporations. Kasich promised to help improve our schools and put more money in the classroom but his budget does exactly the opposite: it takes money out of the classroom and sends it to big education companies like K12 all while supporting schools that cost more and fail more students.

    (special thanks again to Greg Mild for helping me locate all of the statistics used in this post)