Rocketship Charters are planning to open in Nashville and Memphis, but there have been a few problems along the way.

Lisa Fingeroot of the Nashville Ledger writes that the for-profit corporation,which relies on computers to cut costs, has experienced a dramatic decline in its test scores in the past few years. Once hailed as the “next big thing” because of its high scores, that reputation has melted away, as this article shows.

 

Fingeroot writes:

 

Rocketship opened its first elementary school in California in 2008 and earned a national reputation for success with a “blended” learning model in which students spend a part of the day learning online while supervised by an aide instead of a certified teacher. The rest of the students’ day takes place in a traditional classroom.
The online learning program allows a 50-to-one student-teacher ratio, has come under fire from educators and has contributed to a drop in test scores for Rocketship students, documents show.
Even though California-based Rocketship will abandon the online program, Kristoffer Haines, senior vice president of growth and development, is accusing critics of distorting company goals by wrongly claiming the online program was designed simply to cut costs so more money could be syphoned from each individual school and used to fuel company expansion into more states.
Rocketship’s learning model has found support among many of the nation’s education reform spokesmen, including former Florida Gov. and potential Republican presidential candidate Jeb Bush, who promote the use of computers as a method to individualize student instruction.
But Rocketship took a public relations hit earlier this year when the California Department of Education released test scores showing a steady decline in student test scores between the 2008-09 and 2012-13 school years. During that period, the company grew from one to seven schools and also implemented the higher student-teacher ratio pilot.
The test scores, calculated at the request of Education Week, a national trade magazine for educators, show a correlation between growth of the company and incremental drops in test scores.
But Rocketship officials downplay the scores and blame the drop on the online pilot program, which they say will be nixed before the Nashville school opens for the 2014-15 school year.

 

The company spokesmen boast of “phenomenal results,” but “the results calculated by California officials for Education Week show the percentage of Rocketship students who scored proficient or better in English/language arts dropped by 30 percentage points in five years, and the number scoring that well in math dropped by more than 14 percentage points.”

 

In another article, Fingeroot disclosed that Rocketship had been siphoning funds from charters in one state to finance the opening of new charters in other states.

 

She writes:

 

A national charter school group tapped to open schools in both Nashville and Memphis is dumping plans to syphon money from its schools here and in California to finance expansion into other states, a company official says.

The plan by Rocketship Education to use tax dollars collected in one state to finance the opening of schools in another state has elected officials and charter school observers questioning whether the move is legal.

But that plan has been scrapped and will be replaced in May with a similar business model that shows money will not be moved from state to state, says Kristoffer Haines, senior vice president of growth and development.

Revenues generated at a Nashville school, however, could be used to help jumpstart another Rocketship school in Nashville, he adds.

Even that kind of money movement isn’t winning points from Metro Nashville school board member Will Pinkston, a vocal opponent of unrestricted charter school growth.

“Any charter operator needs to be keeping those dollars in the school and not using them to fund growth inside or outside the community,” Pinkston says.

The Metro school board has approved one Rocketship charter school, but the company has plans to ask for at least one more in Nashville.

Rocketship does not need local approval, though, because it has state approval to take over failing schools in both Nashville and Memphis through the Achievement School District established to improve Tennessee schools performing in the bottom five percent of all schools.

The Rocketship plan to fuel growth through local schools called for cutting staff to save money, and taking an additional $200,000 per year from each of the company’s existing schools to use as seed money.

“It’s called ‘cross subsidization,’ and whether it is legal or not is very questionable,” says Gary Miron, an education professor at Western Michigan University whose research includes the monitoring of more than 300 charter schools around the United States.

“Why would taxpayers in Tennessee want to pay for schools in another state,” he asks.

The plan was first found on the company’s website, but was removed when it became ammunition in a California neighborhood fight over whether Rocketship would be allowed to open a second school in the community.

Haines accuses critics of distorting the information and called the plan “outdated” because much of it was based on an old 2010 plan that was meant only for California schools and only to fund additional California schools, he explains.

In yet a third article, Fingeroot shows how “nonprofit” charter chains are very profitable through real estate transactions and high salaries.

She writes:

 

 

Even though a plan to allow for-profit charter school management companies in Tennessee is dead for the current legislative session, the “Educational Industrial Complex” is still cranking out profits, says the professor who coined the phrase.

 

“There’s not much difference in profit and nonprofits,” says Gary Miron, an education professor at Western Michigan University and a member of the National Education Policy Center in Colorado who studies and monitors charter schools.
“At the end of the year they can clear profits by putting it into salaries and bonuses for executives,’’ he explains.

 

Funds also can be moved or paid into a web of for-profit sister companies that have contracts with the nonprofit charter school.
“It’s really a scam,” Miron says of the many different scenarios that can be used. “To really follow the money, you would have to really understand the facilities companies.”
Miron is particularly wary of the real estate deals like those currently being seen in Nashville and Memphis.

 

In Nashville, the new Rocketship Education school building on Dickerson Pike is being built by a hedge fund company owned by tennis star Andre Agassi. Investors in the company provide financing for construction, and the company acts as a mortgage holder.

 

Each Rocketship school pays between 12 and 20 percent of its budget to the main Rocketship company for a facilities fee. The money is then used for the mortgage payment, says Kristoffer Haines, senior vice president of growth and development.

 

For the company’s California schools, the fee is about 18 percent. He anticipates a facilities fee in the high teens for the new Nashville school.

 

In the end, Rocketship will own the building and “the taxpayer’s interest is not protected,” Miron says. If the charter school closes, the building is still owned by the company, even though it was paid for with tax dollars via facilities fees.

 

“We’re seeing more and more of this,” Miron adds.

 

Nationally, the charter school failure rate is estimated to be about 15 percent.

 

For investing in a school project, investors are given tax credits as high as 39 percent, which allows them to double their money within seven years, says Metro Nashville school board member Amy Frogge, an active opponent of for-profit charter schools.

 

It’s an attractive enticement for hedge fund managers, who have begun flocking to Memphis charter schools to get their share, she adds.

 

The question is whether taxpayers expect their tax money to reduce class size and pay for art teachers, social workers, school nurses, and other kinds of direct school enrichment, or whether they know they are enriching hedge fund managers, investors, and executives of charter chains.