Archives for category: Michigan

A new study in Michigan finds that the proliferation of charter schools has undermined the fiscal viability of traditional public schools.

David Arsen, a professor at the College of Education at Michigan State University, discovered that school choice and especially charters were diverting resources from public school districts, leaving them in perilous condition.

“Which Districts Get Into Financial Trouble and Why: Michigan’s Story” asserts that “80 percent of the explained variation in district fiscal stress is due to changes in districts’ state funding, to enrollment changes including those associated with school choice policies, and to the enrollment of high-cost special education students.”

In other words, the fiscal failings of DPS that we just addressed had less to do with poor spending on the part of district — though we’re sure there was some of that — and more to do with statewide policies, such as those that promote competition, that put the traditional district at a disadvantage.

“Overwhelmingly, the biggest financial impact on school districts was the result of declining enrollment and revenue loss, especially where school choice and charters are most prevalent,” Arsen explained to education blogger Jennifer Berkshire (author of the website EduShyster) in a recent interview.

To read Jennifer Berkshire’s illuminating interview of David Arsen, open this link to her website.

Here is a portion of her interview:

David Arsen: The question we looked at was how much of this pattern of increasing financial distress among school districts in Michigan was due to things that local districts have control over as opposed to state-level policies that are out of the local districts’ control: teacher salaries, health benefits, class size, administrative spending. We also looked at an item that the conservative think tanks are big on: contracting out and privatization. We found that, overwhelmingly, the biggest financial impact on school districts was the result of declining enrollment and revenue loss, especially where school choice and charters are most prevalent. We looked at every school district in Michigan with at least 100 students and we followed them for nearly 20 years. The statistics are causal; we’re not just looking at correlation.

EduShyster: There’s a table in your paper which actually made me gasp aloud—which I’m pretty sure is a first. I’m talking, of course, about the chart where you show what happened to Michigan’s *central cities,* including Detroit, as charter schools really started to expand.

Arsen: We have districts getting into extreme fiscal distress because they’re losing revenue so fast. That table in our paper looked at the central cities statewide and their foundation revenue, which is both a function of per-pupil funding and enrollment. They had lost about 22% of their funding over a decade. If you put that in inflation adjusted terms, it means that they lost 46% of their revenue in a span ten years. With numbers like that, it doesn’t really matter if you can get the very best business managers—you can get a team of the very best business managers—and you’re going to have a hard time handling that kind of revenue loss. The emergency managers, incidentally, couldn’t do it. They had all the authority and they cut programs and salaries, but they couldn’t balance the budgets in Detroit and elsewhere, because it wasn’t about local decision making, it was about state policy. And when they made those cuts, more kids left and took their state funding with them.

EduShyster: As you followed the trajectory of these school districts, was there a *point of no return* that you could identify? A tipping point in lost enrollment and funding from which they just couldn’t recover?

Arsen: When we looked at the impact of charter schools we found that overall their effect on the finances of districts statewide was modest. Then we looked to see if there were nonlinear, or disproportionate, impacts in those districts where charters enrolled very high and sustained shares of resident students. And then the results got huge. We saw very significant and large impacts of charter penetration on district fund balances for different thresholds, whether there were 15, 20 or 25% of the students going to charter schools. That was really striking. At every one of those thresholds, the higher the charter penetration, the higher the adverse impact on district finances. They’re big jumps, and they’re all very significant statistically. What’s clear is that when the percentage gets up to the neighborhood of 20% or so, these are sizeable adverse impacts on district finances.

State officials in Michigan approved a new emergency plan to rescue Detroit public schools from its crushing debt, most of which was accumulated since the state took control of the district.

The Detroit Free Press reports:

Michigan’s Emergency Loan Board on Monday approved measures to implement a $617-million financial rescue and restructuring plan for Detroit’s public schools, over the vocal objections of elected school board members and others who attended the meeting in Lansing.

The board approved borrowing to retire or refinance debt, plus the transfer of assets from the old Detroit Public Schools to a new Detroit Public Schools Community District.

There were shouts of “Shame!,” “Jim Crow” and “Black lives matter” as the three board members left an auditorium at the Michigan Library and Historical Center through a back exit.

Critics say the plan treats Detroit public school students as second-class citizens because they would be the only Michigan public school students who could be taught by uncertified teachers. They also say much of the debt addressed by the plan was rung up while Detroit schools were under state control.

“We believe that the state owes the district considerably more, and we have asked continuously for an audit,” said Lamar Lemmons, president of the elected school board.

House Speaker Kevin Cotter, R-Mt. Pleasant, has called the legislation “an historic plan to save Detroit schools – and the rest of the state – from a disastrous and unprecedented bankruptcy,” adding “this incredible investment by Michigan taxpayers will erase decades of debt and set the new district up for success.”

From time to time, you learn something and think, “That’s impossible.”

Chew on this. After the national embarrassment caused by the revelation that the water supply in Flint, Michigan, had a lead content that was hazardous for human consumption, the state’s Director of Environmental Quality resigned. Now, get this: Governor Rick Snyder picked an executive from the oil company BP to take his place!

His choice, Heidi Grether, was put in charge of external relations for BP after the Deepwater Horizon oil disaster in 2010. Nice preparation for dealing with the environmental problems in Michigan.

Eclectablog asks, what message is Governor Snyder sending to the public?

First, Snyder is telling us he’s unrepentant about his austerity-driven, pro-business and privatization agenda. Despite the tragic outcome of his emergency management in Flint, the abhorrent results of his privatization of veteran care and prison food, and the havoc that his business tax cuts have wreaked on our state budget, he will continue relentlessly pursuing the ideology that business interests top everything.

Second, Snyder is telling Michiganders that he sides with the interests of Enbridge over the protection of our most precious natural resource. Michigan faces an urgent environmental threat right now from the aging pair of oil pipelines known as Line 5 running beneath the Straits of Mackinac. Line 5 has exceeded its life expectancy, would not be approved today, and is operated by the company responsible for the greatest inland oil spill in U.S. history — also right here in Michigan.

Researchers have shown that due to the currents in the Straits, a spill would be catastrophic for the Great Lakes, decimating up to 700 miles of shoreline. And to meet this threat, Snyder appointed a former BP lobbyist who was heavily involved in the company’s response to the 2010 Deepwater Horizon spill in the Gulf of Mexico — the largest accidental marine oil spill in the history of the petroleum industry.

Not only was she involved, but she was proud to shield the company from consequences. In her LinkedIn bio, Grether boasts that she “Developed and implemented successful external relations strategies for the Gulf Coast in response to the DWH accident, thereby achieving no legislation adverse to BP being introduced in the Gulf states.”

A state study of Line 5, paid for by Enbridge, is underway, and the recommendations are expected in 2017. But before the results are made public, Enbridge will get at least five days to examine the results.

We can assume Grether has already been involved in the process, as the proposals for this study were assessed by an inter-agency team from Attorney General Bill Schuette’s office, the DEQ, the Department of Natural Resources, and the Michigan Agency for Energy, where Grether was deputy director immediately prior to her DEQ appointment.

It is impossible not to be suspicious that Grether will bow to pressure from Enbridge to water down the recommendations. It is equally impossible to believe that Grether would actually advocate against the interests of a powerful company in the industry to which her entire career belongs — and to which, if history is a guide, she will likely return after her stint in state government.

Finally, Snyder is telling Michiganders he just doesn’t care what they think. In the 24 hours since the announcement, a torrent of criticism from environmental groups, media commentators, elected officials and others has rained down on Snyder and Grether. Snyder spokeswoman Anna Heaton, quoted in the Detroit Free Press, said: “It’s unfortunate that people choose to publicly criticize her within hours of her appointment, rather than reach out to meet with her and discuss her plans for the department.”

Heaton’s indignation is laughable because as of this writing, Snyder has not made Grether available to the media, despite numerous requests.

Anita Senkowski is a blogger in Michigan who has been closely following the unraveling of Grand Traverse Academy, a charter chain founded by optometrist Steven Ingersoll. Ingersoll developed a new pedagogy, he said, based on “visual learning,” and he gathered a governing board of other optometrists to lead the charter venture. Unfortunately, no one kept close watch on the financial affairs, and Dr. Ingersoll transferred millions of dollars from the schools’ account to his personal bank account. The members of the board were not troubled by this minor oversight, but federal prosecutors were not so understanding. Ingersoll was indicted and convicted. But the saga continues.

Anita Senkowski wrote to me:

File this one under “I thought I’d seen everything”: Steven Ingersoll’s optometry license may be yanked (revoked) by the Michigan Board of Optometry, and guess who sent letters of recommendation? [Board members] Mark Noss and Brad Habermehl:

http://glisteningquiveringunderbelly.blogspot.com/2016/06/mark-noss-brad-habermehl-write-letters.html

In addition, in late March, federal prosecutors revealed a former Noss accountant blew the whistle as he exited the place and revealed a years-long pattern of cash payments:

http://glisteningquiveringunderbelly.blogspot.com/2016/03/breaking-news-full-spectrum-managments.html

However, using the accountant’s information, federal prosecutors later substantiated two previously undiscovered Ingersoll bank accounts and ID a total of (wait for it!) $627,624.14 was paid to Ingersoll by Noss. Although it’s later claimed that one of the payments was a reimbursement for an early payroll payment made by Ingersoll during the transition from his Smart Schools Management to Noss and Full Spectrum, that’s still a hell of lot of money. And did Ingersoll report the money on his taxes? According to the government, nope!

http://glisteningquiveringunderbelly.blogspot.com/2016/04/full-diaperfilled-with-money-complete.html

At the start of each fiscal year (July 1), beginning in 2007 and continuing for six years until 2013, Grand Traverse Academy (GTA) manager Steven Ingersoll advanced his entire annual Smart Schools Management, Inc. fee from the Traverse City, Michigan charter school’s bank account before it had been earned — and before he was contractually entitled to receive it. Although based on a percentage of the GTA board’s approved preliminary budget figures, Ingersoll’s management fee was adjusted downward after actual budgets were calculated.

However, Ingersoll never really repaid the difference between the amount he’d advanced himself and the actual management fee he received.

How did the receivable grow from $538,864 on June 30, 2007 to $3,551,328 on June 30, 2012 if Ingersoll, as he claimed to the GTA board, booked each year’s fee overpayment as a receivable and paid it off at the beginning of the next fiscal year?

Simple: after Ingersoll had paid the previous year’s receivable balance using Michigan state aid money provided to the Grand Traverse Academy, he transferred that money back from the Academy’s bank account to one of his Smart Schools accounts, and created a new, and even larger, receivable balance. (Ingersoll finally admitted the scheme on December 9, 2015 while testifying during his ongoing sentencing hearing).

Representatives of the GTA board, including its then-president Mark Noss, met with attorneys from the Thrun Law Firm and Steven Ingersoll on May 20, 2013. During the meeting, Ingersoll admitted owing the charter school at least $3.5 million but asked to have the debt classified as a “loan”.

According to the May 30, 2013 Thrun Law Firm legal recommendation to Noss, the issue before the Board “relates to funds withdrawn from the Academy’s general fund by Steven Ingersoll and/or representatives of SSM, which exceed the amount appropriated or authorized by the Board to be paid to SSM for either management fees or the reimbursement of Academy expenses.”

The letter estimated Ingersoll’s debt to the Traverse City charter school at $3,548,319 (based on information provided by Ingersoll’s handpicked CPA, Tony Henning). As Henning had relied solely on “financial reports and representations of Steve Ingersoll” to determine the amount, Thrun repeatedly urged the GTA board to “independently verify the full sum due” instead of merely accepting Henning’s number.

Representing the interests of the GTA and its board, not Steven Ingersoll and Smart Schools Management, Thrun affirmed in its May 30, 2013 letter that “Steven Ingersoll openly admitted, when asked by us during the May 20th meeting, that a conflict exists between his personal interests and the interests of the Academy.”

However, the Academy Board ignored Thrun’s recommendation to verify Ingersoll’s numbers, instead using CPA Henning’s exact $3,548,319 amount in its June 13, 2013 “demand letter” to Steven Ingersoll.

On June 30, 2013, the GTA board and Ingersoll agreed on a “repayment plan”, revealing the details in the Academy’s 2013 financial statement. The agreement allowed Ingersoll to “work off” his balance by foregoing management fee payments over the remaining three fiscal years of his management contract.

GTA board president Mark Noss oversaw an early morning meeting on March 19, 2014 where the board voted unanimously to officially “withdraw from the management contract with Smart Schools Management, Inc.”

Minutes later, the board accepted the resignation of “Mark Noss as the President of the Board.” Although Noss tendered his resignation during this meeting, the resignation was not effective immediately.

GTA records reveal Noss continued to serve in a dual role as a board member until its May 2014 meeting, nearly two months after signing a multi-year, multi-million dollar management contract.

Steven Ingersoll was indicted on April 9, 2014.

Ingersoll was charged with three counts of wire fraud, two counts of tax evasion, one count of conspiracy to defraud the government, and one count of attempted conspiracy. (Four co-defendants, including Ingersoll’s wife Deborah, were also charged on various fraud and conspiracy counts).

An April 24, 2014 superseding indictment further charged Steven Ingersoll with tax evasion regarding his attempt to “disguise the money allegedly received from Grand Traverse Academy” —which was also named by the government as the motive for the bank fraud conspiracy and tax evasion conspiracy.

Steven Ingersoll was convicted of three counts of fraud and tax evasion on March 10, 2015.

Ingersoll’s sentencing hearing began on October 21, 2015 and is scheduled to resume July 11, 2016.

On March 15, 2016, an accountant formerly employed by Mark Noss at Full Spectrum Management reveals to the GTA board and the charter school’s authorizer, Lake Superior State University, Noss had been making $12,500 monthly payments to Ingersoll since April 2014, shortly after Noss assumed control of the GTA.

Using information provided by the whistleblowing accountant, (who resigned shortly after making his revelations public), federal prosecutors were able to substantiate that between April 8, 2014 and March 1, 2016, Steven Ingersoll received a total of $627, 624.14 from Full Spectrum Management, the educational services provider owned by Mark Noss and holder of the management contract for the Grand Traverse Academy or Grand Traverse Academy itself. All of that money went into accounts owned by Steven Ingersoll and his solely owned entities.

An excerpt from the April 29, 2016 document: “In assessing the credibility of Habermehl as a witness and Noss as an affiant in this matter, the court must consider the relationships they have with Ingersoll and how their financial and personal relationships with Ingersoll have influenced the representations that Habermehl and Noss have made to the court.

The evidence discussed above casts doubt on the credibility of Ingersoll, Noss and Habermehl.”

Stuff like this, which seldom are noticed by the mainsteam media, can drive bloggers crazy. Is anyone listening? Does anyone care?

This alarming article describes the destruction of the Highland Park, Michigan, school district.

Once a thriving community, Highland Park suffered as the automobile industry declined. Its schools declined as the community became poorer and blacker.

The Highland Park district is more than 90% black. That makes it just right for a state takeover because it does not have political power. So, get ready for the “civil rights movement of our time” to step in, take charge of the schools, and kill off the district.

Governor Rick Snyder thought he knew how to fix the ills of Highland Park: He appointed an emergency manager to set its financial house in order in 2012. The emergency manager was an accountant. He also had spent some time working for White Hat, the for-profit charter company in Ohio, which has perfected the extraction of funds from public money for private gain.

The first emergency manager was gone in a few months, and a new one was installed.

Instability and churn were the watchwords of the districts that Governor Synder took over.

In all, the Highland Park School District has had five emergency managers at the helm over the 4 1/2 years it has been under state control.

Still, Highland Park’s public school system continued to disintegrate, finally reaching the point today where it barely exists at all.

For anyone seeking a measuring stick to assess the job done by the district’s emergency managers and the for-profit charter school company hired to run Highland Park schools, the most telling statistic may be this:

At the time of the takeover, the district had 969 students. Today, that number, according to the state’s school data web site, is 311 — a drop of nearly 70 percent. Moreover, all of the students attend the district’s last remaining school, which serves both elementary and middle school students.

The state takeover was complicated:

Operating under a paradigm similar to the new system created for Detroit Public Schools, there are two public school districts operating side-by-side in Highland Park.

One is the “old” district, known as the School District of the City of Highland Park.

That district is overseen by an elected school board that has virtually no power and nothing to do with governing the education provided to the city’s children.

The “old” district exists only to pay accumulated debt.

Just how much is owed?

School board members have been asking for that number. But, according to the state of Michigan, no one — including the emergency manager put in place by Snyder to ensure the debt gets paid off — can say exactly what it really is, because legally required financial audits haven’t been filed for the past two years.

A second, “new” district was created in 2012 by Joyce Parker, the second of five EMs appointed by Snyder to control education in Highland Park. This new district, unencumbered by the debt being paid off by the “old” district, was supposed to flourish because all per-pupil state funding was, ostensibly, able to go toward education and not toward satisfying the demands of bondholders.

However, in 2014, Michigan Radio reported that the new district was already facing a deficit of about $600,000, a shortfall attributed in large part to a continued decline in enrollment.

This new district — known as the Highland Park Public School Academy System — is operated by The Leona Group, a private, for-profit charter school management company with a checkered past.

The entire district was handed over to a for-profit charter chain. No more public education. Families are fleeing. Soon there won’t be a district.

Michigan has perfected a formula for destroying an entire school district.

If you live in the 71th district in Michigan, I urge you to help elect Theresa Abed to the legislature  as a member of the House.

 

The 17th is Eaton County, west of Lansing.

 

Theresa is a career school social worker (for 30 years) when she decided to run for office to support the schools. She was twice elected to the post of County Commissioner. She served as state representative from 2012-2014, the first Democrat to win that seat in 50 years.

 

When end she ran for re-election in 2014, she lost by only 148 votes to a candidate funded by the Koch brothers.

 

She is running for state representative for her district in 2016, and she needs our help. She is fighting for public education. She understands children and schools and will be a great advocate for Real Reform in the legislature. She is a member of the Network for Public Education; she attended our annual conference in 2015 in Chicago.

 

If you live in her district, please volunteer to help. If you don’t, please consider a gift to her campaign. She will be a great advocate for children and schools in the Michigan legislature.

 

You can send a contribution to Theresa at:

 

Friends for Theresa Abed
605 Schoolcraft St.
Grand Ledge, MI 48837

Two teachers plan to raise money to pay for a fiscal audit of Detroit public schools, which the legislature refuses to pay for. We often hear legislators call for school accountability. Who will be held accountable for the financial mess in Detroit? More than 40,000 children need trachers, small classes, the arts, clean and healthy schools, supplies, libraries, social workers, guidance counselors, psychologists. Where did the money go?

 

 

 

“DPS teachers Nina Chacker (mobile 3134075446) and Zack Sweet (mobile 2163084460) will be staffing a Lemonade Stand at Eastern Market this Saturday from 9 am to noon to raise funds for a financial audit of DPS under Emergency Management. The stand will be located at the gazebo on Russell Street.

 

 

“An amendment introduced by Michigan Representative Brian Banks to the House package of bills restructuring DPS had called for an audit of DPS finances since 2009, but was defeated along party lines last week despite Republican concerns about various fiscal anomalies under a series of Governor-appointed Emergency Managers. Ellen Cogen Lipton, former House Education Committee Minority Chair, has estimated that the teachers will need to raise at least $500,000 through lemonade sales to afford the fiscal accountability that teachers are calling for. Teachers have expressed dismay at recent statements by Emergency Manager Steven Rhodes that the district might be unable to meet its contractual obligations to DPS staff, and believe funding the fiscal audit will help taxpayers and the Michigan legislature better understand where all the money has gone.

 

 

Dr. Thomas C. Pedroni
Associate Professor, Curriculum Studies
Wayne State University
DetroitDataDemocracy.org”

This is ironic. Michigan wants to drop the Common Core standards and substitute the Massachusetts standards that were dropped by Massachusetts to make way for the Common Core standards!

 

A bill is moving through the Michigan legislature to do exactly that. Michigan has had a groundswell of opposition to the Common Core standards, like most other states. Their solution is to take the standards of the nation’s highest performing state, Massachusetts, and make them specific to Michigan.

 

Meanwhile, in Massachusetts, those standards were jettisoned because the state won a Race to the Top Grant and agreed to adopt the Commin Core.  As it happens, the Massachusetts state Commissioner of Education is Mitchell Chester, who was until recently, the chair of the PARCC testing consortium. So naturally he wanted his state to drop the MCAS and use PARCC.

 

When PARCC started, underwritten by the US Department of Education, 24 states and DC joined its consortium. Now it is down to 6 states and DC. Massachusetts is using a hybrid: part PARCC and part MCAS.

 

What a fine mess!

 

When will states figure out that an effective reform strategy is far more complicated than standards, testing, and accountability. When Massachusetts adopted its standards, it invested new resources and  increased equitable spending. It expanded pre-k and raised standards for new teachers.

 

There is still much to be done in Massachusetts. But it is important to remember that it achieved good results by sensible improvements in schools, not by closing schools, firing teachers and principals or mass privatization (until recently, Massachusetts had only 25 charter schools in the state).

 

 

Nancy Flanagan, a veteran educator, now retired, writes about the contrast between the bankrupt Detroit public schools and a scandal-tainted charter school four hours north in Traverse City, called Grand Traverse Academy in Michigan.

 

We have read many stories about the desperate financial condition of Detroit, a condition made worse by inept state-appointed emergency managers.

 

Flanagan writes:

 

“The Michigan legislature hasn’t decided yet whether to let Detroit Public Schools thrive. The House is currently tinkering with bills that cut back funding even further, allow uncertified teachers in DPS, remove DPS teachers’ collective bargaining rights, force teachers to re-apply for their jobs and eliminate an elected school board. In addition, DPS teachers got a tongue-lashing from several members of the legislature.

 

“Yes, this is the same DPS whose teachers had to shame their appointed leaders into doing something about the dead rodents, mold and wavy gym floors, earlier this year. It’s the same DPS that’s had four “emergency managers” in the past seven years. And it’s the same DPS system where 14 administrators appear to be headed for prison or plea bargains for taking kickbacks from a supply vendor.

 

“I don’t know a single DPS teacher who doesn’t provide essential supplies (including snowpants) for the children she teaches, out of her own funds. Imagine learning that principals in your district have been pocketing thousands of dollars out of the supply budget while you’re stopping at the dollar store on the way home, just to make it through the next day. They have taken to social media to plead their case, because nobody else seems to be listening…”

 

Drive four hours north to the Grand Traverse Academy, and you will find a beautiful charter school that collects $10 million in public funds.

 

GTA has a messy scandal on its hands. The charter operator borrowed $3.5 million from the school’s funds. Does anyone care? The media ignores the mess. The charter operates for profit, and these things just happen in business. The operator, an optometrist, said he had a pedagogical method based on “visual learning,” and his charter board had other optometrists who supported his ideas. The operator has since been convicted of fraud and tax evasion, but the board does not seem overly concerned.

 

Flanagan wonders:

 

“Detroit and Flint, New Orleans, Philadelphia and Washington D.C. were the first charter frontier. It was easy to persuade your average citizen to think: Well. You know, Detroit. They had to do something.

 

“Next step, however: Build gorgeous new buildings and use public money to fracture solid, well-run public educational systems. For private profit.

 

“Ask yourself: Why are the papers and the policy-makers all over those protesting teachers in Detroit–while the white-collar crime in charter world goes virtually unnoticed?”

 

 

 

 

 

 

The state superintendent in Michigan has decided that testing students once a year in grades 3-8, as No Child Left Behind required, was not enough. He intends to test students twice a year, starting in kindergarten.

 

If he were a doctor, he would recommend frequent temperature taking as a cure for illness.

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