Are Arizona Virtual Schools Overfunded?

by David Safier

(TASL) The Virtual Schools folks are nothing if not organized. They continue to fight the battle against state cuts to online school funding. Their latest salvo: An op ed in the Republic complaining that the legislature is planning to cut virtual school funding. The author, Ann Robinett, is the president of a group that calls itself Arizona Parents for Education which, not surprisingly, only cares about funding for online schools.

A few months ago, virtual schools supporters were urged to take part in a letter writing campaign and a demonstration in front of the state capitol. These folks are organized and tenacious.

The Arizona Parents for Education website, by the way, is only a little more than a month old, and it's very slick. Ann Robinett, who depicts herself as a concerned parent, is either a very capable web designer and public relations professional, or the site was put together by the Arizona Distance Education Association, the lobbying arm of the Virtual Schools. My guess is the second option. For me, the name is a giveaway: Arizona Parents for Education. Nonprofessional activists normally don't come up with clever, deceptive titles like that.

A state legislator I was talking to said he didn't believe Virtual Schools were being targeted for cuts in the current budget. He viewed all the noise as a preemptive show of strength, to warn legislators about the fuss they can expect if they make any cuts.

But maybe cuts in virtual schools are warranted. The 2007 Report from the State Auditor General seems to think so.

Here's some information about virtual school costs from the audit. Administrative costs are $500 higher per student at virtual schools than the state school average: $1200 as opposed to $700 per student. But that average hides some ridiculously high administrative costs at a few schools. At Arizona Distance Learning, the administrative cost is $3134 per student, and three other virtual charter schools are above $1500. Other schools have lower administrative costs, which brings the average figure down.

One reason for the high administrative costs is -- surprise! -- high administrative salaries. Three of the schools reported that their top administrators had salaries between $71,000 and $187,000. Similarly sized brick-and-mortar schools gave their top administrators between $65,000 and $81,000.

Take a breath. Look at that figure again. The state is paying CEOs or Directors at publicly funded virtual schools upwards to $187,000. Since the largest of these schools has 1400 students and the next largest has 700 students, you can roughly compare that CEO to a principal at a 1500 student high school or a 700 student middle school.

It was hard for the audit to dig too deeply in the way money was spent at these virtual schools, because many of the schools haven't been complying with the state requirement "to prepare an annual report that includes a description of their program’s cost-effectiveness." In other words, we're dealing with faith-based funding here. The state says to the virtual school, you tell us what you need, and we'll give it to you.

Once again, I'm jumping into this topic without knowing all the facts. I'll try to learn more. I hope some people from the virtual schools will help us out with some facts and figures. (Please don't try and spin this with vague assertions about how well you serve special needs students and dropouts. Let's have something concrete.) But something smells wrong here.

One final note about the amount virtual high schools spend per student. According to the audit, Primavera High School (a virtual school) spends $7,345 per student. Arizona Distance Learning school spends $7,159. Does the state give these schools more than others that spend in the $5,000 to $6,000 range? If not, where is all that extra money coming from?

Comments

[Mimi Rothschild]

The costs that most taxpayers pay for virtual schools is extremely high and much more than what it costs to actually run the online school. I know what it costs to run a high quality online school because I have been running them since 2001.

The tuition at the online Academies managed by Learning By Grace, Inc, the nation's largest provider of online Christian education, averages somewhere between $700.00 and $2500.00 per year. When I was involved in providing services to a large online charter school in Pennsylvania, the company I worked with (owned by my husband) charged less than $2000.00 per student for the identical services that most online schools are charging three 350% more for.

While Learning By Grace, Inc. doesn't give away free computers to entice our students to join, the difference in costs from our maximum of $2500.00 to the cost of $7500.00 for the Arizona Distance learning schools is an astronimical $5000.00 that is going directly from nation's school budgets into the hands of for profit companies. This is an unacceptable and unconscionable use of our tax dollars, in my opinion.

This is a blatant misuse of funds that should be used to create different and better educational opportunities for our children. It is time for legislators to take a long, hard look at the amount of taxpayer dollars are spent on for profit online schools and adjust their funding to the legitimate costs of running the schools and not the inflated salaries and profits associated with providers such as K12, Inc. (the founder of K12, Inc. Michael Miliken and his brother Lowell Miliken recently cashed in 267 million dollars EACH when their for profit company that runs many of the nation's online schools, went public.

Do you think it is appropriate for your tax dollars to add hundreds of millions to ex convict Michael Miliken (convicted for defrauding his customers in the 80's) and his brother's net worth?

Mimi Rothschild
Co-founder and CEO
Learning By Grace, Inc.

[David Safier]

Mimi, thank you so much for your contribution and your information. You have far more information than I have on the general topic, which is very valuable. I'm looking for ways to gather more facts about Arizona's online schools. I hope you'll continue to participate as I follow this topic.

As an aside, I looked on your website and saw you were connected with John Holt. He was one of my favorite radical educators in the 1970s. By coincidence, I just mentioned him in a post a few days ago -- http://arizona.typepad.com/blog/2008/05/state-testing-t.html . Also interestingly, it was when he gave up on public schooling and moved toward home schooling that I drifted away from following him. That's probably about when you connected with him.

Another aside: K12, Inc schools may give away computers, but what does that cost them? If they buy hundreds at a time, I doubt they spend more than $300-500 per computer, certainly not anywhere near $1,000. And when a student stays with them for a number of years, I'm sure they don't get a new computer annually. In other words, it doesn't add up to a huge expenditure.

[David Ochoa]

$187,000?! That's robbery! If you look deeper, you'll see the same names listed as CEO's and Directors of these high paid schools listed on the payrolls of other "virtual schools" in other states. They are taking advantage of the system.

I thought it would be worth commenting on the the fact that the private company my kids use, Arizona Virtual School, does more without state or federal funding than any of our highly funded charter virtual schools. I have seen these state-sponsored schools charging the tax payers $3000-$8000 per student while an actual "virtual school" is able to do it for $1350 per year/per student. Lobbying and bullying by highly connected companies like K12 and Connections Academy are monopolizing the virtual education opportunities in every state. Meanwhile, good virtual schools like the Arizona Virtual School (http://www.arizonavirtualschool.com) and others go on providing a better service for a fraction of what these others are taking.

[David Safier]

Fascinating, David, thanks for the comment. Is Arizona Virtual School a full, accredited school that has a full set of offerings? I'd like to know more about it to make sure you're not comparing apples and oranges.

And if you have some factual information or know some sources that can confirm what you say about the directors being on multiple payrolls, I'd like to see the information.

I'll repeat what I've said before. I think virtual schooling is a reasonable option I probably wouldn't choose but one I wouldn't stop anyone else from choosing it. But if the virtual charter schools are taking more taxpayer money than is warranted, that's no good. That's what I want to find out.

[Dan Starr]

Let's look at it from my viewpoint, okay? I, too, am a tax payer. Let's say I have to pay a certain amount each year for schooling. Now I could pay that amount to "for profit" schools, or I could pay it to the State/County/School District. Either way, it's going to have to be paid. Thus, the actual amount is a wash. My question, then, is where do I get the best "value?" Value, for you non-capitalists out there, means getting the greatest return for the least outgo. It's what you do when you decide to buy something on sale, rather than pay full price. Good, common sense. To determine value in education, you have to decide what the purpose of education should be in our society. Is it merely a means of indoctrinating children in the rules and regulations? Is it a way to give them the means to make the most out of their gifts? Or even something else? Or some combination of the two?

See, the discussion of how much costs what is silly until you look at what you are buying. A $50 car sounds great until you find out it has no motor.

Having said that, all citizens who pay for education need to decide what they want to buy, and then support that. From my observations, trusting a government to do anything other than indoctrination is just plain foolish. I don't trust governments to do much of anything. If they just work on keeping us safe, I would be happy. Yeah, this is libertarian point of view. But I simply don't see the evidence that government run schools teach as well as some other options. Does anybody that has studied any history at all really think that giving the government a monopoly on education is the best move? I mean, look at how well monopolies have worked in the past. Not so great. What makes anyone think that a government monopoly is any better? Honestly, give me some actual facts, rather than your opinions, and perhaps I'd come to agree with you. My reading of history right now screams "Don't trust government with something as important as this."