Student art and school funding

So in the blog entry that he posted yesterday, John hits up on one of those areas where I can fully agree with him onone respect and have to completely disagree with him on another – and this dichotomy sums up how so many of the issues that we deal with in K-12 distance, online, and blended learning are discussions about the shades of grey – and not simply black and white issues.

On one hand, Ohio Connections Academy is a public school.  The parents who elected to enroll their children into that school pay the same taxes as the parents who elected to enroll their children into their neighbourhood brick-and-mortar school.  Why should those parents have a lesser percentage of their tax dollars that are supposed to be devoted to education go to their child’s education because of that decision?  It would be like charging a higher gas tax at the pump on electric vehicles because they drive just as much as a regular vehicle, but because they have to gas up less their overall contribution to the upkeep of the roads is less.  In much the same way we don’t penalize the consumer who made the decision to buy electric, why do we penalize the student when they attend an online school?

However, on the other hand, Ohio Connections Academy is a managed school operated by Pearson.  While information about the impact of the Connections Education division on Pearson’s bottom line is difficult to determine in their corporate filings because of the size and scope of the company, we can use the filings of Stride Inc. (i.e., K12, Inc.) as a comparative model.  Unfortunately, Stride has changed the way it reports its revenue in its 2021 annual report – and has begun to combine the way it breaks things down from the traditional lines of (i) Managed Public School Programs, (ii) Institutional, and (ii) Private Pay Schools and Other to the new lines of (i) General Education and (ii) Career Learning (more on that in a separate entry).  So if you look at Stride’s 2020 annual report, managed schools accounted for 88% of their revenue (and this figure has historically been in the 85% to 90% range).  In Stride’s 2021 annual report, they indicated that they had revenue of 1,536,760,000 and expenses of 1,001,860,000 for a gross margin of 534,900,000.  If we assume that the 2021 revenue and expenses broke down approximately the same way as indicated in the 2020 report (i.e., about 88% was from managed schools), that would mean…

	Overall report	Assuming 88% for managed schools
Revenue	1,536,760,000	1,352,348,800
Expenses	1,001,860,000	881,636,800
Gross Margin	534,900,000	470,712,000

Now I realise that this is an overly simplistic model.  But even if we assume that only 88% of the revenue and all of the expenses were generated by the managed schools it would still mean that $350,488,800 of the gross margin was generated by tax dollars that were allocated for public education.  A private corporation received $350 million dollars of public funds to educate students that was not used for the purposes of their education.

To continue this line of inquiry, if 88% of Stride’s revenue was generated from managed schools and those managed schools enrolled 186,300 students in 77 different virtual and blended schools.  This would mean that Stride network has an enrollment of about the same as the Hawaii Department of Education (which is a single school district), or a little less than Philadelphia City School District, but a little more than Detroit City School District.  Anyone believe that any of the public officials in any of those three publis school districts have a salary that looks like this?

Executive	Compensation based on 2021 annual filing	Assuming 88% for managed schools
Nathaniel A. Davis Executive Chairman	$6,017,557	$5,295,450
James J. Rhyu Chief Executive Officer	$4,716,110	$4,150,177
Kevin P. Chavous President, Academic Policy and External Affairs	$2,367,630	$2,083,514
Shaun E. McAlmont President, Career Readiness Education	$18,862,212	$16,598,747
Vincent W. Mathis Executive Vice President, General Counsel and Secretary	$1,967,022	$1,730,979
Timothy J. Medina Chief Financial Officer	$1,945,851	$1,712,349

Again, a simplistic analysis – but you should be starting to see why I begin to question whether we should fund full-time online schools at the same rate as we fund traditional brick-and-mortar schools.  And this doesn’t even look at the public money that went to shareholders.

So I agree with John that if the funding is going to curricular, co-curricular, and extra-curricular activities for students, I’m all for that.  But when you look at the amount of sheer profit that is made from money allocated for public education – particularly when that profit is based on programs where the corporation has a fair amount of direct control to complete control over operations – you have to start questioning your values and ideology if you believe this is a good use of public funds.

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BY JOHN WATSON I must admit that it didn’t jump to the top of my task list when Marie Hanna of Ohio Connections Academy emailed me to say: “I realize that policy and data are more in your wheelhouse but I thought you might enjoy the art show that was created by our students.” It probably should have though. Wow. When I clicked through the link in her email, I expected to spend two minutes glancing at a few pieces of student art. Instead, I spent at least twenty minutes being amazed at what these students had put together and at the fantastic online gallery. In a subsequent email she told me that the school’s art teachers came up with the idea of an in-person art show in 2020 but had to pivot to online. As good as the art is, the online show probably doesn’t warrant a blog post. But there’s a funding implication that is worth delving into. Online learning critics and some policymakers say “online learning doesn’t need to be funded at the same level as traditional schools because …there’s no building…there’s no lunch…there’s no <fill in the blank with some physical object or onsite task>.” These views lead to endless debates about “adequate” levels of funding. But in those “adequacy studies” did they ever ask, “how much does the online art show cost?” Probably not. And what about the next thing that nobody has thought of yet? As we shift to a world where more students and families are choosing more and different options, why do critics underfund some of those options and then complain about outcomes? Why not instead fund students at the same levels regardless of instructional modality and watch what new schools can do? This is especially true post-pandemic as some funding cuts and proposals, which previously targeted mostly online charter schools, are now in some cases targeting district programs. A related issue is how students are funded and what schools must do to fulfill funding requirements. In some instances, funding levels may appear within education code to be similar, but in practice they are actually different. In other cases, states are proposing changes that would force schools to modify their instructional practices to receive funding, instead of being able to focus on what they believe is best for each individual student. There’s much more to say on this topic. The DLC is putting the finishing touches on a report on this subject, which will be released this summer.

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