Thinking about the Cost of Educating Students via the Madison School District, Virtual Schools and a Madison School Board Member Ed Hughes email to State Senator Fred Risser

Susan Troller:

Madison School Board member Ed Hughes sent me an e-mail pointing out another vexing problem with Wisconsin’s school funding system and how it penalizes the Madison district, which I’ve written about in the past. Hughes notes in his e-mail “This particular wrinkle of the state school financing system is truly nuts.”
Hughes is incensed that the IQ Academy, a virtual school operated by the Waukesha district, gets over $6000 in state aid for poaching students from the Madison district while total state aid for educating a student in a real school here at home is $3400. Waukesha makes a profit of about $500 per student at the expense of taxpayers here, Hughes says. And that’s including profits going to the national corporate IQ Academy that supplies the school’s programming.

The complete text of Ed Hughes letter to Senator Risser:

Sen. Risser:
As if we needed one, here is another reason to be outraged by our state school financing system:
This week’s issue of Isthmus carries a full page ad on page 2. It is sponsored by “IQ Academy Wisconsin,” which is described as a “tuition-free, online middle and high school program of the School District of Waukesha, WI.” The ad invites our Madison students to open-enroll in their “thriving learning community.”
What’s in it for Waukesha? A report on virtual charter schools by the State Fiscal Bureau, released this week, sheds some light on this. The Madison school district gets a little more than $2,000 in general state aid for each of our students. If you include categorical aids and everything else from the state, the amount goes up to about $3,400/student.
However, if Waukesha (or any other school district) is successful in poaching one of our students, it will qualify for an additional $6,007 in state aid. (That was actually the amount for the 2007-08 school year, that last year for which data was available for the Fiscal Bureau report.) As it was explained to me by the author of the Fiscal Bureau report, this $6,007 figure is made up of some combination of additional state aid and a transfer of property taxes paid by our district residents to Waukesha.
So the state financing system will provide nearly double the amount of aid to a virtual charter school associated with another school district to educate a Madison student than it will provide to the Madison school district to educate the same student in an actual school, with you know, bricks and mortar and a gym and cafeteria and the rest.
The report also states that the Waukesha virtual school spends about $5,500 per student. So for each additional student it enrolls, the Waukesha district makes at least a $500 profit. (It’s actually more than that, since the incremental cost of educating one additional student is less than the average cost for the district.) This does not count the profit earned by the private corporation that sells the on-line programming to Waukesha.
The legislature has created a system that sets up very strong incentives for a school district to contract with some corporate on-line operation, open up a virtual charter school, and set about trying to poach other districts’ students. Grantsburg, for example, has a virtual charter school that serves not a single resident of the Grantsburg school district. What a great policy.
By the way, Waukesha claims in its Isthmus ad that “Since 2004, IQ Academy Wisconsin students have consistently out-performed state-wide and district averages on the WKCE and ACT tests.” I didn’t check the WKCE scores, but last year 29.3% of the IQ Academy 12th graders took the ACT test and had an average composite score of 22.9. In the Madison school district, 56.6% of 12th graders took the test and the district average composite score was 24.0.
I understand that you are probably tired of hearing from local school board members complaining about the state’s school funding system. But the enormous disparity between what the state will provide to a virtual charter school for enrolling a student living in Madison, as compared to what it will provide the Madison school district to educate the same student, is so utterly wrong-headed as to be almost beyond belief.
Ed Hughes
Madison School Board

Amy Hetzner noted this post on her blog:

An interesting side note: the Madison Metropolitan School District’s current business manager, Erik Kass, was instrumental to helping to keep Waukesha’s virtual high school open and collecting a surplus when he was the business manager for that district.

I found the following comments interesting:

An interesting note is that the complainers never talked about which system more effectively taught students.
Then again, it has never really been about the students.

Madison is spending $418,415,780 to educate 24,295 students ($17,222 each).
Related: Madison School District 2010-2011 Budget: Comments in a Vacuum? and a few comments on the recent “State of the Madison School District” presentation.
The “Great Recession” has pushed many organizations to seek more effective methods of accomplishing their goals. It would seem that virtual learning and cooperation with nearby higher education institutions would be ideal methods to provide more adult to student services at reduced cost, rather than emphasizing growing adult to adult spending.
Finally Richard Zimman’s recent Madison Rotary talk is well worth revisiting with respect to the K-12 focus on adult employment.
Fascinating.

  • mary Battaglia

    When a progressive city like Madison is the last to initiate a program like “online” classrooms or Charter schools or 4K or other progressive programs….you will be left in the dust, lose students to burbs and other options, which due to the funding formula we will lose money. Kuddos to Waukesha for having the initiative to be progressive.
    The new progress being made with MATC is a move in the right direction, but moving forward is important. I realize we can’t without funds, but really for a ten year period MMSD was in a state of peril without motion and financially it will hurt us.

  • Bluecollar Conservative

    Just thought you might want to know that the 2009-10 open enrollment reimbursement amount is $6,443.
    As a Waukesha resident, I understand this cost to MMSD. I’m equally concerned as a local taxpayer, and a state taxpayer, about the cost per student if in fact the actual cost per student, according to the Fiscal Audit Bureau report is, as you stated, $5500 per student. Many of the IQ students are local full and part-time. So, we not only collect equalized revenue from the state, local taxpayers are equally gouged. Based on our 09/10 local property taxpayer levy of $$86,312,959, and a 3 year average FTE of 12,971, we’re spending $6654 for a student whose enrollment is 100% covered by equalized aid.
    Clearly, this cash cow covers deficit spending for things like out of control OPEB liability, unrealistic health insurance coverage, and in our case, the baggage from the CDO investments (thanks Erik).
    While I do confess that IQ is a great public educational tool for reaching students in a different and effective way for some families, I’m of the opinion that this program should be analyzed as a state run program by DPI with no revenue caps to be fair to all. Waukesha and it’s teachers’ union need to come to terms with our economy and taxation, unemployment, and what everyone can and are willing to pay for public education. Thoughts?

  • Bluecollar Conservative

    “for a student whose enrollment is 100% covered by equalized aid.”
    I’m in error on that…our equalized aid per student is lower at 07/08 $3773 per child. Still a cash cow though.
    My advise to someone calling the funding formula “Truely nuts”, would be to look at the amount levyed by MMSD for”community services, fund 80″ and one can understand why school districts look like they’re very expensive. MMSD is one of the highest taxing CSF districts in the state. Fund 80 also is the most abused method of circumventing revenue limits.
    WSD used the CSF to partially fund the construction of a new 22,000 sq. ft. building addition to South High without going to referendum in 04/05.

  • Laura

    The figures I’ve seen for what funding is presented to the virtual school is $5,000. I get the feeling that the figure for both the traditional and virtual school cost per student is much higher than this figure. I completed a paper on WI virtual schools where the following info comes from:
    “Wisconsin reimburses virtual charter schools at approximately half the rate of conventional brick-and-mortar schools. Recent legislation ensuring the existence of virtual schools in Wisconsin requires an audit of such schools to be completed by December 2009” (Glass, 2009, p. 8, http://www.greatlakescenter.org/docs/Policy_Briefs/Glass_Virtual.pdf). Glass claims that establishing a fair price for virtual schools is extremely important and without this could exacerbate the gap between rich and poor schools giving corporate and private companies an unfair advantage.
    In 2002, The Heller Report indicated that 300 children from about 100 districts attended the Wisconsin Connections Academy program and for each student, state aid of $5,000 went to the school. Of the $5,000, $3,000 per child went to Wisconsin Connections Academy which is owned by Sylvan Ventures to provide curriculum for the non-profit school (Union Challenges Virtual School That Used Union Teachers, 2002, http://findarticles.com/p/articles/mi_m0BTY/is_6_8/ai_95790693/). Whether or not this is a proper decision of spending public funds is an important issue. The article later states that Connections Academy is spending $10,000 per students, so the virtual school will remain unprofitable until more students enroll.
    My personal opinion on the funding issue if virtual schools are really the reality of the future is to overhaul the property tax structure per district and move it to the state level. That way, the parent/student can pick the right virtual school via open enrollment and the local district wont get hurt. I feel that this way the focus would be more upon the coursework instead of competition between districts.

  • Bluecollar Conservative

    Laura, my figure for 09/10 came from Wisconsin Taxpayers Alliance via a specific question concerning the availability of data on local costs per student rather than tuition costs by the state. Unfortunately, they and DPI are filtering through the data to come up with a truly reflective cost.
    It’s quite commom for Waukesha children to take online courses in I.Q. Some of the courses are questionable such as gym class online. even though part-time children in I.Q. take classes, the taxpayers have seen no financial benefit. It seems that we’re just reducing class sizes and increasing costs associated with the contracted company. I’ve yet to see the financial benefit
    We also spent over 2 million in start-up costs and lost big money until the contract was renegotiated. But, the administrators took care of their brothers and sisters and staffed I.Q. with high wage MA and MA+30 staff.
    I often questioned why we spent 2 million to create a school to benefit children in a school district such as Madison’s. We cut programs and services locally…for what?
    I also agree, this needs to be a state run charter school district. It would benefit our broke state, and help reduce local expenditures and efficiency as well.

  • JC

    I think the funding system needs to be evaluated. But there’s also another issue here- why are people choosing to home school versus sending their kids to school. There is a social development benefit to sending kids to school- making friends, learning to interact effectively with the outside world, preparing for a “work” environment, learning to deal with people and problems within a structured environment. When the school environment becomes hostile, or a child’s learning is hampered by environmental issues, then who can blame someone from opting for home schooling.
    Also, parents want to be part of the “team” and have input. If they are contacting teachers, principals, or even superintendents with real questions, and want to go thru appropriate means to improve their child’s problem- but when they are poo poo’d, or even worse, ignored, then why should they have to send their kids somewhere where even adults can’t be heard?
    There are always going to be problem parents, and problem children. If they cannot be worked with, then perhaps it’s better off for all involved that those individuals participate in “virtual schools”. Maybe this is what they should do with the trouble makers at school- forced open enrollment into virtual schools- put the responsibility back on the parent if they cannot control their child’s behavior in school or help. Why should the others who want to learn, suffer because of a disruptive child?
    School should be a positive place for kids of all ages to go, and the adults should be trained to model appropriate social skills, and interviene when they see a child socially struggling, and unhappy. When the child is happy, the parents are happy. There are too many times when kids are allowed to bully, exclude, and disrespect peers, and the adults do nothing with some crazy notion that if they help it will make things worse.
    Of course, no one should be “made” to be friends with someone else, but they can behave appropriately and be educated not to be destructive to the other child’s self esteem. I think there should also be a place where kids who are socially awkward can escape- like the library or structured play with the assist of a staff person (kick ball, etc) during “free time”. I just think that this is something that COULD BE DONE, if the schools really wanted to reduce Open enrollment out. Instead of just complaining about funding models.
    This became an issue for me when my son’s first grade teacher gave the ENTIRE class a week’s worth of recess restriction, because during “centers”, a child wrote on a dry erase board that they were not to touch, “I love you” (and no one admitted to it). I emailed the teacher, citing the Dept of Education “strongly discouraging” the use of recess restriction on a child- much less a class room of innocent first graders. My problem was how I was treated asking for purpose and end gain behind the action. I asked questions- she did not respond. The Principal called me the next day–>not to discuss the matter, but to complain about how I was picking up and dropping off my kids, as well as other ridiculous things (I felt SHE was bullying me!) She then summed the situation up when I confronted her about the teacher’s abuse of discipline- a real issue- as me “having a general disregard for the rules”.
    I emailed and called the Superintendent- the “boss” of the Principal (chain of command was followed), and she never contacted me. I contacted the Board of Education, who DIRECTED the Superintendent to contact me. The Superintendent still didn’t (apparently not too concerned with the Board’s authority).
    The final result? My husband and I open enrolled our children to a nearby district, and I was so upset by the situation I started doing research on this subject. When I saw our school district was in the top 4 school districts LOOSING the most money on net open enrollment, (while our competitors were MAKING money), I was even more disgusted- because we aren’t MPS, or Green Bay Area, or Racine– we’re an area that doesn’t have to deal with the problems of poverty, fetal alcohol syndrome, gangs, violence, etc- things that you can’t really do a lot to change as a school system.
    To top it off, when I emailed a cross comparison of the last 4 years of our district, with our competing districts, displaying almost a million dollars LOST of state aid to net open enrollment- and questioning why they keep insisting the Open Enrollment is a success when it is not in terms of Net Open Enrollment, a board member emailed me explaining that in the grander scheme of things, it was a success, and that even though we were losing money, we were benefitting, because those 173 students lost- are students “we dont have to educate”, and that even though the district has to pay $6000 out for each student, the state pays the district $10,000 to the home district regardless if the child open enrolls out or not. Thereby, the district gets to keep $4000- for each child, and “doesn’t have to educate them”.
    It’s like the Wall Street bailout. The federal govenment will lend you $ for 0%, and you can offer that money to consumers in the form of credit card debt or auto loans, AND make money on the interest. This is how Boards like my district, justify not spearheading programs to address open enrollment- or customer satisfaction.
    Until schools start managing things more like a restaraunt (I know this is crude)- to find out what’s making people upset, and try to improve “the food”, they are going to keep loosing kids. If the district is too large to deal with customer problems, and weed out which are legit, and which aren’t, then maybe they need to be reduced, or people need to be put in charge of “quality control”, who can advocate for parents and children, who aren’t simply “trouble makers”. There’s no reason someone cannot mediate some of these issues.
    There also need to be accountability and a code of conduct- like hospital workers, or the police. If a staff has a bad day, and it’s not like that staff person- deal with it in a reasonable manner. Have that staff person be accountable for their bad day. Don’t make excuses! If the staff person is a problem, send them off for skills training, so they can learn how to deal with problem behavior, their own emotions, or deal with problems in a realistic and professional manner.
    Kids want to be in school. If you provide a place where they feel they are cared about, and will be listened to- as well as safe, they will come.