Archives for category: Texas

Bloomberg News reports that charter schools are borrowing money at a record pace, relying on state guarantees to improve their credit ratings.

 

On their own, charters would be considered junk bond status. But state guarantees allow them to issue bonds with higher ratings.

 

U.S. charter schools are issuing a record amount of municipal debt, with Texas leading the charge as borrowers rated close to junk tap a program that gives their bonds top credit grades.

The institutions, privately run with public funding, have sold $1.6 billion of securities in 2014, data compiled by Bloomberg show. That’s more than all of last year and the most in Bloomberg data beginning in 2007. About $464 million has come from Texas, which for the first time in April backed a charter-school deal with its Permanent School Fund. The state-run pool guarantees bonds, lending the debt the AAA grade that Standard & Poor’s accords Texas.

Charter schools, which enroll 4.2 percent of U.S. public school students, are building a presence in the bond market as more parents seek academic options without paying private-school tuition. In Texas, the number of institutions tripled from 2000 to 2012 and enrollment jumped to 190,000 from 26,000, according to the National Center for Education Statistics.

“The backing of the Permanent School Fund is critical to the growth of charter schools” given the savings it generates, said David Dunn, executive director of the Austin-based Texas Charter Schools Association. “There’s still a lot of room to go. We’re still not meeting the demand.”

 

Texas’s Growth

 

The growth in charter issuance contrasts with a slowdown in the $3.7 trillion municipal market as states and cities still recovering from the recession hesitate to borrow even as yields approach generational lows. Muni sales are down 7 percent from last year’s pace, Bloomberg data show.

Yet in Texas, home to seven of the 15 fastest-growing U.S. cities, municipalities are borrowing the most since 2008 as a swelling population fuels infrastructure investment. Charter schools have the same need, with enrollment growing about 15 percent annually in the last six years, Dunn said.

Life School, which has more than 4,500 students on campuses in Dallas County and Ellis County to the south, in April became the state’s first charter to issue debt backed by the School Fund.

Tax-exempt bonds maturing in August 2044 priced to yield 4.13 percent, or about 0.5 percentage point more than benchmark 30-year munis.

Without the guarantee from the fund, created in 1854, the school has a BBB- rating from S&P, the lowest level of investment grade. Institutions need to earn an above-junk rank on their own to get the backing.

Republican Governor Rick Perry has said more of the institutions should be permitted. The state guarantee has won over investors.

“It’s a state where you clearly see that they’re supportive,” said John Flahive, Boston-based director of fixed income at BNY Mellon Wealth Management, which oversees about $20 billion in munis and has bought debt of Texas charter schools.

“It’s a tricky sector,” he said. “Politics play a role in whether you can really see it working out for the life of the bond.”

Colorado and Utah also help boost the grades of schools in those states, said Wendy Berry at Charter School Advisors, which is based in Albany, New York, and counsels the institutions.

 

Great Hearts

 

Arizona ranks second behind Texas in issuance in 2014. Phoenix’s industrial development agency this month sold about $80 million of tax-free bonds for Great Hearts Academies in the state’s largest charter-school borrowing this year. The deal refinanced securities and paid for new facilities. S&P rated the debt BB+, one step below investment grade.

The Ratliff family in Texas are heroes of public education, they are moderate Republicans, and they been steadfast advocates for public schools.

They recently co-wrote an article that explains why vouchers are the wrong path for Texas.

“Bill Ratliff of Mount Pleasant is a former state senator and lieutenant governor of Texas; Thomas Ratliff of Mount Pleasant represents District 9 on the State Board of Education; state Rep. Bennett Ratliff of Coppell represents District 115 in the Texas House.”

There is no state that has invested as much time, money, and belief in standardized testing as Texas. The deep belief that regular measurement will produce great results has been a dogma in that state. Its testing regime was the model for No Child Left Behind, which is now viewed as a failed law that set impossible targets and real punishments.

But that confidence has been shaken, as this special report in the Dallas Morning News shows, because test scores foremost districts have been stagnant for three years. Instead of blaming teachers and students, pictmakersare casting a skeptical eye at the tests–and maybe even at their dogmatic commitment to testing as a cure all. This is a state where the legislature it billions out of the school budget, expected schools to do better with larger classes and fewer resources, and counted on testing to make everything right.

Reporters Jeffrey Weiss and Holly K. Hacker write:

“For Texas school districts high-achieving and low, affluent and not, urban and suburban, the lack of progress on STAAR is consistent.

“Three years of stagnant statewide average test scores were matched by flat results in the districts where most Texas students attend, according to an analysis by The Dallas Morning News.

“It wasn’t supposed to be this way.

“When STAAR debuted, state education leaders assumed scores would climb as they did with STAAR’s predecessor, TAKS. But no district larger than a Class 5A high school has shown significant progress on most STAAR tests compared with the state. Even for the smallest districts, about as many have lost ground as gained.

“And that feeds into questions being asked with increasing urgency by parents and politicians: Do these scores mean students aren’t learning? Or are the tests bad at measuring what kids know?”

And the elected officials are turning against the test mania:

“As a practical and political matter, Texas’ standardized tests are in trouble.

“Last year, lawmakers killed 10 of the 15 planned end-of-course exams for secondary schools. More pullback may be in the offing for next year’s session. The Texas Education Agency is even asking for $30 million to develop accountability measures that don’t depend so much on testing.

“Republican and Democratic candidates have all campaigned on cutting the number and use of the tests. Legislators peppered state education officials with tough questions during recent hearings. And many of those questions had to do with the gap between predictions and reality for STAAR scores.”

The reporters note that the tests are defended by the state education comissioner, but he was never an educator. Before Governor Rick Perry appointed him, he headedanagrncy charged with regulating the energy industry. We can assume that in Texas under a Republican governor, the energy industry is a lot less regulated than the public schools.

Weiss and Hacker ask a great question:

“Imagine putting a pot of food on the stove, putting a thermometer in the pot and walking away for a while. When you come back, the thermometer reading hasn’t changed. Is the problem with the stove, something unexpected in the pot or a busted thermometer?”

Mor and more parents, educators, and elected officials are saying that the thermometer is broken.

This may seem unthinkable, but Pearson–the mega-giant British publisher of tests and textbooks–might lose its $500 million dollar testing contract for the state of Texas. So says the British publication,
The Telegraph. The entrepreneurs and profiteers of education are worried about the future. How sad. Will they buy each other up? Will they make money or lose money? So many problems when you live or die by profit margins. So many lobbyists to hire. So many campaign contributions to make. Welcome to the new and tawdry world of the education industry.

 

 

Katherine Rushton writes:

 

Most people have, at some point in their lives, felt a bout of nerves as they awaited a crucial set of exam results. Pearson’s chief executive, John Fallon, could be forgiven for having the same feeling.
Next month, the London-listed education giant will face its own version of this peculiar kind of torture, as it learns whether Texas plans to renew its contract for Pearson to provide testing in schools. The deal is a valuable one, worth around $500m (£310m) over five years. It is also a matter of particular strategic importance.
Texas is amongst America’s biggest and most influential states when it comes to education spending – the linchpin in the North American market, which accounts for 59pc of Pearson’s revenues and 66pc of its profits. And it has a long history of doing business with the British company, whose chief executive cut his teeth in the US textbook market, and whose former boss, Dame Marjorie Scardino, is herself American.
If the educational testing business were an election, this would count as Pearson’s safe seat. Yet there are signs Pearson may be about to lose its grip on its traditional stronghold. An audit of the Texas Education Agency recently found problems with the way the Pearson contract was tendered and managed.

 

Pearson has had other setbacks, like the loss of the Apple-Pearson iPad deal in Los Angeles.

 

The e-industry is facing difficulties, says Rushton:

 

“In this transition from print to digital, we don’t have all the infrastructure, but directionally things are moving the right way,” a Pearson spokesman said.
“There are short-term headwinds and long-term opportunities. It is not going to be a clear, straight path. It’s hard work. It’s a case of trial and error as you innovate. The question is, ‘How quickly do you learn?’”….

 

Some analysts argue that Dame Marjorie carefully timed her exit at the end of 2012. Pearson expanded enormously under her tenure, using a series of acquisitions to develop digital products and expand in emerging markets, notably China.
Mr Fallon, these analysts argue, is now unfairly having to grapple with a ragtag bag of companies, shouldering the blame for a combination of changing market dynamics and decisions taken by his predecessor.
Others claim Dame Marjorie is the one being scapegoated. They argue that the FTSE 100 business she led for 16 years is wobbling because of much more recent decisions, and that Fallon has lost key staff and contracts because of a reduction of investment in digital projects.
Whichever interpretation one adopts it is clear that Pearson’s troubles are not all of its own making. Its current turbulence started at a time when the tectonic plates of the education industry were already shifting rapidly. Part of this is down to a redrawing of the battle lines between established rivals. In America, McGraw-Hill Education has lately sharpened its focus on digital products under new chief executive David Levin, the former boss of UBM.
News Corp’s education division has also upped its game, under the guidance of Joel Klein, the former New York City schools chancellor.
But there are also a number of new rivals bearing down on the sector: Some of these are start-ups. We are in the midst of an unparalleled splurge in investment in new digital education businesses. In 2008, venture capital firms ploughed just $200m into the sector. This year, that sum is on course for $1bn.
Meanwhile, established technology giants like Amazon, Google, Apple, Microsoft and Samsung are all making inroads into the industry, in the hope that they will build loyal audiences to sell other products to down the line. “We’ve handed education to the big software and hardware providers,” says a senior industry figure. “Google is slated to have 20m teachers working on Google apps, and it’s all free. The margins are different because the motivations are different. Google can give away education because it is securing customers for the future.”
At the moment, the big technology companies tend to partner with the traditional players – Apple was supposed to provide the iPads for LA’s $1bn digital project, for example, but Pearson was responsible for the content. However, we have already seen this story play out in other industries. It is only a matter of time before these technology giants start producing their own content, and try to disintermediate the traditional publishers altogether.
“Partnering with one of these guys is like going to bed with a serial rapist,” one senior source says. “It is only a matter of time.”
He identifies Amazon as the biggest single threat. Its motivation is clear. The more educational content it provides, the more likely it is users will become dependent on its ecosystem and use it for future purchases.
Organisations that are not trying to make money arguably pose an even greater challenge, however. In 2011, Facebook’s founder Mark Zuckerberg and his wife, Priscilla, ring-fenced between $1.5bn and $2.5bn to fund education projects. The endowment, informally dubbed the Zuckerberg fund, is a relatively low-key operation at the moment, but industry figures speculate that he will end up tackling education, in much the same way as Microsoft founder Bill Gates established the Bill and Melinda Gates Foundation to improve world health.
Those sorts of initiatives should only ever be welcomed, but they do not make life easier for traditional education companies.
One former Pearson executive argues that “for-profit” organisations in education are “seriously under threat”, and could end up losing their footing altogether.
But the Pearson’s spokesman feels differently. “The private sector has a pivotal role to play,” they say.
Either way, Pearson has reached a crucial moment in its trajectory. Fallon has to whip the ragtag bag of businesses he inherited into a smart, digital company. Otherwise, the venture capital firms could soon start circling and pick-pick-pick it away.

 

A coalition of pastors in Dallas has issued a stirring call for public support of public schools.

This comes at a time when billionaire John Arnold has been organizing a campaign to turn Dallas into an all-charter district.

Leading pastors in Dallas–George Mason and Frederick Haynes, joined with four others–wrote an opinion piece, in which they said that public support for public schools is vital and that “choice” is illusory. .

They write:

Eighty-four percent of children in this country attend public schools. Slightly more than 60 percent (over 3 million of our 5 million Texas public school students) are identified as poor. These children in our public education system are our neighbors, and we are called to love them by providing a vibrant and thriving school system. That’s why Dallas-area pastors are calling on elected officials and leaders in the business, faith, parent, labor and neighborhood communities to support the public schools of greater Dallas…..

By investing in public education, we invest in the future of 5 million Texas schoolchildren. This basic investment is the key to a child’s future economic mobility, the financial stability of Texas families and the state’s long-term economic prosperity. Dallas residents know the direct correlation between education achievement and economic viability.

We must prioritize the adequate funding of our institutions of public education for the benefit of all Texans. The past two sessions of the Legislature have seen contentious fights over public education policy. Because public education is such a sound investment in our children’s future, one wonders: What’s the dispute?

There are two competing visions for public education: one weakens the public portion, and one strengthens it. On one side, there is a drive to defund public education, de-professionalize teaching, misuse test scores to declare schools as failing, and institute paths to privatize schools in the name of school reform. These privatization schemes take the form of private school vouchers, for-profit virtual schools, and corporate chain charter schools that do not serve all students equally.

The other vision, a vision which we embrace, is to provide adequate funding for all schools, raise the bar with higher standards and more respect for the teaching profession, focus on a rich instructional program instead of a narrow overemphasis on testing, and engage community partners in support for neighborhood schools and the children and families they serve.

Those advocating privatization have attacked the public school system and falsely labeled neighborhood schools failures. This arbitrary judgment has been exposed as a cynical strategy to divert public education money for private purposes, and has brought advocates like us to the fight against privatization and in support of initiatives that tell the true story about the value of our public schools.

The “choice” that corporate chain charters and private schools claim to offer parents and students is illusory. It is really these private operators who exercise their own freedom to choose which students they will recruit and retain and which students they will exclude or filter out. And the latter group will disproportionately include Hispanics, African-Americans, English language learners, students with disabilities and students who are at risk because of disciplinary or academic difficulties. These children are our neighbors, too.

We join with Dallas community leaders and parents who understand that we must keep our attention upon the real and pressing — and constitutionally mandated — need for full funding for public education. Dabbling in political diversions that are peripheral to the adequate education of all the children of Texas is dangerous and foolhardy. This is not the time to divert funding away from our neighborhood schools, which provide a place of refuge and support for all Texas children, no matter their background, situation or educational need. More important, it is the loving thing to do.

George Mason is senior pastor at Wilshire Baptist Church. Reach him at gmason@wilshirebc.org. Frederick Haynes is senior pastor at Friendship-West Baptist Church. Reach him through the church at friendship west.org/main/contact-us.

OPEN LETTER: Other signers
Joe Clifford, senior pastor, First Presbyterian Church, Dallas
Bryan Carter, senior pastor, Concord Baptist Church, Dallas
Joel Sanchez, preaching minister, Skillman Church of Christ, Dallas
Andy Stoker, senior minister, First United Methodist Church

Tom Ratliff, a member of the Texas state Board of Education, wrote this article for the Longview News-Journal. It is a warning to parents not to assume that charter schools are better than public schools. On average, he says, the opposite is true.

 

Public schools ranked higher for financial accountability:

 

During the 2012-13 school year (the most recent year of the rating), Texas’ traditional public schools far outperformed charter schools in both academic and financial measurements. Don’t take my word for it, look at the information straight from the Texas Education Agency:
Financial accountability: bit.ly/1rIFYsm
Academic accountability: bit.ly/1pXZ3RZ
To summarize these reports, I offer the following:
The FIRST rating is the Financial Integrity Rating System of Texas and, according to the education agency, is designed to “encourage public schools to better manage their financial resources in order to provide the maximum allocation possible for direct instructional purposes.” I think we all agree, that’s a good thing to measure.
According to the agency, the FIRST rating uses 20 “established financial indicators, such as operating expenditures for instruction, tax collection rates, student-teacher ratios, and long-term debt.” How did the schools do? Glad you asked.
Traditional ISDs: 89 percent ranked “superior” and 1.2 percent ranked “substandard.”
Charter schools: 37 percent ranked “superior” and 20 percent ranked “substandard.”
Yes, one out of five charter schools ranked “substandard” on how they spend the tax dollars supporting them, while almost 9 out of 10 ISDs ranked “superior”.

 

And public schools outperform charter schools academically too:

 

Let’s shift our attention to academic performance. If the academic performance is good, the taxpaying public might be more understanding of a low rating on a financial measure. Unfortunately, the charters do not compare well there, either, under the 2014 TEA Accountability System.
Traditional ISDs: 92.6 percent met standard, while 7.4 percent did not.
Charter schools 77.7 percent met standard, while 17.3 percent did not.
Again, almost one out of five charter schools failed to meet the state’s academic standards.

 

And then Tom Ratliff asks the best question of all:

 

“Where is the outrage from groups like the Texas Association of Business or the Austin Chamber of Commerce?” Those groups rarely miss an opportunity to criticize the shortcomings of traditional ISDs. Why not express concerns when numbers like these relate to charter schools? If these numbers were attributable to ISDs, you can bet those groups would be flying planes around the Capitol and holding press conferences like they have in the past. A little consistency would be nice when asking for taxpayer-funded schools to perform as expected.”

 

Ratliff points out that his father wrote the original charter law. It is refreshing to see a policymaker looking at the data and seeing that competition does not translate into better education or more accountability. By the way, Tom’s father Bill Ratliff –former Lieutenant Governor of Texas–is already a member of the blog’s honor roll for his willingness to speak up and think for himself. A good Texas family.

A teacher in Texas wrote this comment, which depicts (to me) a system where data matters more than teachers or learning or children, either the system is on autopilot or is run by people who confuse numbers with learning.

“They recruited from NC and from Spain (for bilingual teachers) this year because they did expect vacancies. I think it’s important to mention that all are not based on EVAAS because not everyone has those standardized scores. They are also based on Stanford testing in 1st and 2nd grade and for classes like PE, a district made assessment. I teach Kinder and am still waiting to find out what growth they calculated for my scores last year (and yes, they were bubble-in multiple choice tests). No one could explain to me how it was going to work, what percentage growth was required to be considered effective and how that was going to be calculated– so I’m very anxious about it. I was rated highly effective in the professional and instructional areas but who knows. We are supposed to use 2 different assessments for more validity but that doesn’t happen-they end up using the reading and math versions of the same test given the same week. I did wonder how many vacancies they had to start the new school year yesterday?”

Morgan Smith wrote the best article I have seen so far on the decision by Judge John Dietz ruling that school funding in Texas is inequitable and unconstitutional. This article includes links to the decision and findings.

I repeat what the judge said last year because it is so simple yet eloquent as an explanation of our civic duty to our children. Note also that the judge ruled against the appeals of charter advocates and referred them to the Legislature:

“Though Dietz made no public remarks on Thursday, his decision is a reprise of an earlier oral ruling in February 2013. From the bench at the time, Dietz discussed what he called the “civic, altruistic and economic” reasons for supporting public education.

“We realize that others provided for us when we were children. We realize that children are without means to secure their education. Just as others provided for us when we were in school, now is the time when we provide for others,” he said, going on to describe the societal benefits of a well-educated population: lower crime rates, fewer people who need public assistance and a greater state income.

“The judge ruled against the two parties in the lawsuit that did not represent traditional school districts. He held that the issues raised by Texans for Real Efficiency and Equity in Education — a group representing parents, school choice advocates and the business community that alleged that the current system was inefficient and overregulated — were better solved by the Legislature. He also ruled against the Texas Charter School Association, which argued that the state cap on charter school contracts and charters’ lack of access to facilities funding was unconstitutional.”

Joe Smith, a retired superintendent in Texas, has an influential blog, where he pointed to “the enormity” of the decision.

This is the best story yet on the Texas story today, in which Judge John Dietz said that the current funding system was inequitable. Of course, his decision will be appealed as some folks would rather not pay more money to educate the children of Texas. The story appears in the Texas Tribune.

Here is a great quote from the decision and the article:

“As he presented his ruling, Dietz discussed what he called the “civic, altruistic and economic” reasons for supporting public education.

“We realize that others provided for us when we were children. We realize that children are without means to secure their education. Just as others provided for us when we were in school, now is the time when we provide for others,” he said, going on to describe the societal benefits of a well-educated population: lower crime rates, fewer people who need public assistance and a greater state income.”

State Commissioner of Education Michael Williams issued a statement I response to court ruling that held state funding inadequate and unconstitutional. Be it noted that Commissioner Williams is not an educator. He is an ally of the Bush family, a real good tie in Texas. In his last post he regulated the oil and gas industry.

TEA News Releases Online Aug. 28, 2014

Statement of Commissioner Michael Williams regarding ruling in school finance case

AUSTIN – Commissioner of Education Michael Williams issued the following statement regarding today’s ruling in the school finance case:

“Today’s decision is just a first step on a very familiar path for school finance litigation in Texas. Regardless of the ruling at the district court level, all sides have known this is an issue that will again be resolved by the Texas Supreme Court. Texas is committed to finding solutions to educate every student in every classroom. However, it should be our state leaders making those decisions, not a single judge. Any revisions to our school finance system must be made by members of the Texas Legislature. The Texas Education Agency will continue carrying out its responsibilities in providing funding for our public schools based on the current system and ultimately the legislative decisions made at the end of this legal process.”

http://www.tea.state.tx.us/news_release.aspx?id=25769815887

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