An Ohio judge has ordered a for-profit charter school company to turn over a wide range of financial documents to a group of schools it operates, ruling that "public money must be accounted for."

A collection of schools in the Cleveland and Akron area and their governing boards have been seeking to have the company, White Hat Management, turn over records pertaining to the management of those schools.

The schools are under contracts that require them to pay 96 percent of their state funding and 100 percent of federal money to White Hat, the order explains. The company has fought the schools' request for more information about its finances, arguing that the public funds the schools receive from the state are no longer public after they've been paid to White Hat as "monthly continuing fee," according to the court document.

White Hat Management also has argued that because Ohio's state auditor has not found anything improper in the company's finances for the schools, it should not be compelled to produce more detailed information than it already has.

But Franklin County Judge John F. Bender did not buy White Hat's rationale.

Citing Ohio law, he said that even though White Hat and its associated school operators are private corporate entities, they are also "public officials," in that they have received public money and been authorized to operate public schools.

"A management company operates a community school under contract from its governing board, pursuant to a grant of authority from the legislature," Judge Bender ruled. "The money a management company is paid to operate a community school ... is public money."

The judge's order noted that a White Hat official had testified that the company had created a limited liability company as an education management organization, or EMO, at each school.

The official's testimony suggested that White Hat paid public money to at least some other corporate entities for school expenses, such as rent and other services, the court order states. Some of those entities "may be affiliated with White Hat defendants, or that principals or offices of some or all of the White Hat defendants may have a financial interest in them," Judge Bender wrote.

He ordered White Hat to provide school officials with ledger accounts that describe transactions between each EMO and any company affiliates, subsidiaries, or related entities; building lease information; purchases made for each of the schools in the lawsuit; and tax returns (to be viewed only by lawyers in the case), among other documents.

A lawyer for White Hat could not be reached for comment, and a company representative had not yet responded to an e-mail on Friday.

Many of the schools that are plaintiffs in the lawsuit have struggled academically, and a few of them have closed, said James D. Colner, a lawyer representing them.

The schools are seeking to determine whether public money is "being spent in the best interest of the children," Colner said in an interview.

While he believes the case will be appealed, he called it a "groundbreaking decision," which could serve as a model for similiar challenges in other states.

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As states scramble to secure waivers from the No Child Left Behind Act, they're being led into accepting a national curriculum, a new paper contends.

The authors, Robert S. Eitel and Kent D. Talbert, are among the latest critics to argue that the Obama administration, through waivers and other means, is going too far in shaping curriculum policy from the federal perch.

The administration's requirement that waiver-seeking states adopt "college- and career-ready standards," has the effect of mandating that they participate in the Common Core State Standards, they say.

And that, they argue, contradicts language in federal law, including the Elementary and Secondary Education Act, which bars the federal government from controlling curriculum.

Eitel and Talbert could be described as federal policy insiders. Both served as legal counsels at the U.S. Department of Education during George W. Bush's administration. They've written the paper for the Pioneer Institute, a Boston research organization that supports free markets and "effective, limited and accountable government."

Backers of the common-core standards have for years strongly denied that their efforts are aimed at imposing any type of national standards or curriculum on states. They say the creation of the common-core standards has been directed by state officials from the get-go—a point U.S. Secretary of Education Arne Duncan made again to reporters yesterday, in explaining the waiver process.

But Eitel and Talbert argue that the NCLB waivers, as well as the Race to the Top competition and Race to the Top Assessment Program, pressure states into accepting multistate standards and tests. Federal officials have provided funding for state assessment consortia charged with developing exams based on common standards.

Through these consortia, the U.S. Department of Education "has simply paid others to do what it is forbidden to do," the authors say. "This tactic should not inoculate the Department against the curriculum provisions imposed by Congress."

And the process for waivers from the NCLB law will create intense pressure for states to stick with the common standards in the future, whatever their misgivings, the authors say:

"Any state effort to untether from the conditions imposed by the Department in exchange for having received an ESEA waiver will certainly result in the Department revoking the waiver. Moreover, given the extensive compliance costs imposed by the waiver (California has refused to seek waivers on cost grounds), the likelihood of any state doing so after having spent significant funds required by the waiver conditions is minimal. Like the dazed traveler in the popular Eagles' song 'Hotel California,' states can check out any time they want, but they can never leave."

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Is Arizona the next Wisconsin?

Lawmakers in the state are considering Republican-sponsored legislation that would ban government entities, including school districts, from engaging in collective bargaining. That's raised the hackles of a number of Arizona school organizations, among them a leading state teachers' union and a group representing school boards.

One proposal under consideration would forbid any state agency or political subdivision from recognizing any union as a bargaining unit, and says the state's Attorney General would enforce that provision.

Battles over union powers erupted last year in the Midwest, where Wisconsin Gov. Scott Walker, a Republican, and the state's GOP-controlled legislature approved legislation that dramatically curtailed collective bargaining for teachers and other public employees. That measure sparked large-scale demonstrations at the state capitol and prompted a series of recall elections, including an ongoing effort supported by Democrats to oust Walker from office.

In Ohio, a similiar law approved by Republican Gov. John Kasich also provoked an acrimonious fight. In November, voters overwhelmingly rejected that law, which had been placed on the ballot with the backing of teachers unions and other opponents.

Both Walker and Kasich argued that negotiations between local district officials and unions are tilted heavily in favor of labor organizations. They have said that their measures were necessary to prevent teachers' groups from negotiating into contracts costly provisions that have little, if any benefit, for students and taxpayers.

One organization opposed to the Arizona legislation is the Arizona School Boards Association, which worries that it would usurp local officials' authority over personnel and budgets.

The legislation undermines "local control," ASBA spokeswoman Tracey Benson said. "Our local school boards would be restricted in how they deal with their employees."

The Arizona Education Associationhas also voiced strong objections, saying a package of bills under consideration in the statehouse would "cripple that ability of teachers and other school employees to have a voice in decisions that impact their classrooms and schools."

"In Arizona, school districts voluntarily choose to meet with our local association leaders," Doug Kilgore, an AEA official, said in a statement. "Bargaining is not mandatory. School boards and administrators know they need an organized voice for teachers in the process to get decisions that create quality schools. Our voice on local budget issues helps ensure our taxpayers' money is spent in the classroom in ways that benefit kids."

Republicans control both legislative chambers and the governor's mansion. But the odds of Arizona's legislation making it into law is unclear.

Matthew Benson, a spokesman for Gov. Jan Brewer, declined to comment in detail on the bargaining proposals, noting in an e-mail that the governor does not typically give her views on legislation that could change before it reaches her desk. He added that "it is fair to note that the union/collective bargaining measures were not drafted in coordination with the governor or her staff."

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Comments are rolling in on a controversial notice of proposed federal rules that may, or may not, affect charter school pensions, and South Carolina schools Superintendent Mick Zais is, to say the least, not a fan of the suggested changes.

In a letter to the Internal Revenue Service, Zais, an elected Republican, invoked Ronald Reagan and denounced government intrusiveness in arguing that the rules would imperil the retirement security of charter school employees.

"President Ronald Reagan once said, 'The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help,' " Zais wrote in a Feb. 6 letter to U.S. Secretary of the Treasury Timothy F. Geithner and IRS Commissioner Douglas H. Shulman.

"On the 101st anniversary of his birth, proposed regulations by the U.S. Department of the Treasury and Internal Revenue Service perfectly exemplify President Reagan's concerns about government overreach."

As we reported late last week, an advance notice of proposed rulemaking from the Treasury Department and IRS have drawn strong objections from charter school advocates, who say charter school employees could be prevented from participating in state pension plans.

The deadline for submitting public comments originally was Feb. 6, but federal officials recently extended it until June.

[UPDATE: A spokesperson for the U.S. Department of Education said late Monday that agency staff are planning to have a conversation with Treasury Department officials about the notice of proposed rules, and what they mean.]

South Carolina has 47 charter schools. It permits, but does not require, charter employees to participate in the state's retirement system, Zais explained. The South Carolina schools chief has been a vocal critic of federal involvement in education, including the Obama administration's Race to the Top program, which has drawn the praise of elected officials from both parties.

The Obama administration has been a strong backer of charter schools, a position Zais acknowledges in his letter, which offers kudos to U.S. Secretary of Education Arne Duncan for his work in that area.

But also Zais also concluded with another shot at the feds, saying, "South Carolina schools have more than enough intrusion from Washington thanks to Congress and the U.S. Department of Education. To paraphase Ronald Reagan, they have all the 'help' they need from the government."

Zais is, however, seeking the federal government's help in one regard: South Carolina is one of many states that has declared its intention to apply to the U.S. Department of Education for a waiver from the No Child Left Behind Act.

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Many state education agencies have seen their budgets cut over the past year, though they have also protected personnel working in "key school reform areas," such as providing help to struggling schools and developing new teacher-evaluation systems, a new survey has found.

Twenty-six of 37 states, plus the District of Columbia, that responded to a survey by the Center on Education Policy said they had made cuts during the 2011-12 school year.

State officials do not expect the 2012-13 school year to be much better: While just 13 of them project more cuts in their education agencies' operating budgets, only four of them expect to see an increase in funding, according to the CEP, a research and policy organization in Washington.

"As these state responsibilities increase, SEA staff with relevant expertise are likely to be stretched very thin," the report says. "It remains to be seen whether SEAs will have the funding and staff to effectively carry out these duties."

When those 26 states cut spending, that often meant leaving open positions unfilled or laying people off. Yet despite those pressures, state agencies also made an effort to create safe harbors from budget-cutting for areas they deemed crucial.

Eighteen states, for instance, reported increasing the number of staff providing support to low-performing schools in 2011-2012 school year—which corresponds with the 2012 fiscal year—while 17 kept personnel levels the same in that area.

Fifteen states reported boosting the number of personnel working on the development and implementation of new educator evaluation systems, while 17 kept the same number of staff in place. Twelve states boosted staffing on the development of new statewide data systems, while 22 kept it level. Ten increased staffing for the development of common-core standards, and another 20 kept the staffing level the same.

When states education agencies were forced to cut jobs, many of them reported doing so through attrition—meaning they left vacant spots unfilled—rather than firing people.

While fewer states project increasing the number of staff who work on key education areas in the months ahead, the majority anticipate at least maintaining the current number of people working on those issues, the CEP found.

The CEP also released another report today on how states are responding to the drying up of federal stimulus funding. See my colleague Alyson Klein's item on Politics K-12 for more details.

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Thirty-six states have established policies that give districts and schools some degree of ability to award credits to students based on mastery of a subject, rather than "seat time," a new report says.

At the same time, the issue brief, released by the National Governors Association, reveals the diversity of approaches taken by state lawmakers as they try to create more flexiblity for students through virtual and other alternative options to traditional classroom instruction.

Some states require high schools to allow students to earn credits based on mastery—which could include showing portfolios of work, projects, or the completion of a tests.

Other states allow students to receive individual waivers from seat-time requirements on a case-by-case basis.

New Hampshire has taken what is probably the farthest-reaching steps away from seat time. The state requires all public high schools to base credit attainment on student mastery, rather than seat time, NGA explains. That means students can earn credits through expanded-learning opportunities, community service, and other means, including online options.

Why are states trying to create this flexiblity? In some cases, they're interested in helping students who've fallen behind, or who don't do well in traditional academic settings, catch up on credit through online courses or other means. Sometimes they want to offer greater flexibility to students who want to move more quickly. Or they want to help students who are otherwise prevented from taking a course they want by their schedules, or limits on what their schools offer.

The report also notes that there are state policies that prevent moving away from seat-time requirements. States typically use student "enrollment counts," based on the number of students in a classroom for the whole school day. That means students taking part in virtual courses or other classes outside of the classroom may not count, resulting in schools receiving less per-pupil funding.

NGA argues that states and college systems can also do more to ensure that higher education institutions accept student transcripts with credits demonstrated by mastery.

Critics of virtual education—and there are many—have said that it is growing too quickly, with few safeguards to ensure quality. But judging from the wave of state activity, governors and lawmakers are keen on providing students and schools with more flexibility in how they acquire knowledge—and how they pick up academic credit.

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The National Governor's Association wants Congress to give states lots of running room when it comes to crafting their accountability plans, according to an interim proposal outlining NGA's priorities for reauthorization of the Elementary and Secondary Education Act (aka the No Child Left Behind Act.)

The governors are asking lawmakers to reshape the federal role in K-12, focusing it on sharing information and research, and helping states collaborate on "innovations to better serve students." They like the idea of federal incentives, but not a lot of federal control.

For more, check out this Politics K-12 entry.

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For two decades, state and local tax policy in Colorado largely has, to a great extent, been routed through the ballot box.

In 1992, voters in the state approved a measure known as the Taxpayers Bill of Rights, or TABOR, which restricted the ability of state and local governments to raise taxes without a public vote. It is widely considered one of the most restrictive measures of its kind in the country, and it has an impact on governments' ability to raise money for a range of services, including schools.

Now, a lawsuit is challenging the legality of that policy, arguing that it has wrongly removed the power to set budgets from the hands of state legislators—essentially, undermining the notion of representative democracy.

Since TABOR was approved, Colorado has gone thrrough a "slow, inexorable slide into fiscal dysfunction," the lawsuit alleges:

"Deterioration of the state's funding base has been slowed by many attempts to patch, cover over, or bypass the straightjacket of TABOR. However, events have demonstrated that a legislature unable to raise and appropriate funds cannot meet its primary constitutional obligations or provide services that are essential for a state."

Those obligations and services include education, the lawsuit contends. The plaintiffs in the lawsuit include current state lawmakers, and members of local governments, including local boards of education. They are asking the court to declare TABOR unconstitutional, in that it violates provisions in the U.S. and Colorado Constitutions calling for an "effective representative democracy." The law runs "contrary to a Republican Form of Government," they claim.

A New York Times story this week quotes legal scholars and historians suggesting that the plaintiffs face long odds. While the plaintiffs may be on a solid historical ground, there is not a long history of federal courts recognizing constitutional arguments made in favor of representative government, according to the article.

Like many states, Colorado has hosted major debates over school funding in recent years. Last year, a group of advocates arranged to have a referendum to temporarily raise taxes in the state placed on the ballot, which would have raised $3 billion for education. But voters resoundingly rejected that proposal, a defeat that local school officials had predicted would leave them searching for more ways to cut programs and services.

The TABOR suit names Colorado Gov. John Hickenlooper as the defendant. The office of Colorado state Attorney General John W. Suthers is defending the state in court, a spokesman for the attorney general said.

[UPDATE: Here's a copy of the state's response to the lawsuit, signed by the state's solicitor general. It says if the plaintiffs' argument won out, it would "require the court to hold unconstitutional all forms of direct citizen lawmaking."

"Whether representative and direct democracy are actually incompatible, as
[the] plaintiffs argue, or whether they are simply two complementary ways of carrying
out a republican government, as the American experience shows, is an interesting
subject for philosophic and academic debate," the state says, "but cannot be resolved in this case."]

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Richard Laine, who most recently served as director of education at the Wallace Foundation, is moving into a top position on school issues at the National Governors Association.

The NGA has played an active and influential role for years in shaping state education policy, most recently in pushing for the adoption of common academic standards.

Laine will serve as director of the education division in NGA's Center for Best Practices. The post was most recently held by Dane Linn, who announced late last year that he was taking a position at the College Board.

Before working at the Wallace Foundation, Laine had stints as director of state policy and initiatives at the Illinois Business Roundtable; associate superintendent for policy, planning and resource management at the Illinois Board of Education; and the executive director at the Coalition for Educational Rights. (He also served on Ed Week's Quality Counts technical advisory committee back in 2008.)

He will begin work with NGA on March 12.

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The percentage of charter schools that are being closed when they are up for renewal has fallen for two straight years, a new report finds, though it's unclear whether the decline is a result of improved quality, or lax oversight and persistent political pressure to keep low-performers open.

In the 2010-11 year, 6.2 percent of charters reviewed for renewal were shut down, a decrease from 8.8 percent the previous year and 12.6 percent the year before that, according to a report released today by the National Association of Charter School Authorizers.

NACSA officials acknowledge that they don't have clear explanations for why closure rates fell.

One possibility is that the quality of charters has risen, though the organization did not seem inclined to accept that explanation at face value.

"[O]ur experience suggests that authorizing agencies should be closing more, rather than fewer, poor-performing schools," said Greg Richmond, president and CEO of NACSA, in a statement. "Across the country, we need strong policies and practices to make sure authorizers are making the right decisions to keep good schools open and to close weaker schools."

The report also notes that closure rates can be affected by the length of terms established for charters by authorizers. Charters with longer terms may have less chance of closing simply because they aren't reviewed as intensely as often. (Another recent report on charter schools examined the reasons behind the closures and pointed to financial problems as a major contributor.)

It's possible that the declining rates of charter closures are a result of the improved quality, but "there really isn't evidence that's the case," said Alex Medler, the vice president of research and evaluation for the organization, in an interview.

Another possibility is that charter authorizers are trying to shut down low-performers, but are meeting resistance, or at least the process is taking longer, because of "political pushback," he said.

NACSA's report points out that the policies for authorizing charter schools—and closing weak ones—varies greatly across states.

For instance, the District of Columbia Public Charter School Board oversees 98 campuses and has been fairly aggressive in shutting down those that don't meet its standards—14 over the past three years, the authors of the report say. The Denver public school system has also been a leader in creating clear performance standards for charters and closing those that don't stack up, NACSA officials contend.

By contrast, the Utah State Charter School Board closed only one school between the 2008-09 and 2010-11 school years—a little over 1 percent of its portfolio of 75 charter schools, according to NACSA.

NACSA says current state policy in Utah allows charters to automatically renew, which prevents the state school board from "conducting high-stakes, periodic reviews that are common elsewhere," the authors found.

There is no right or wrong number of closures, Medler said, but charter authorizers—whether those duties are handled by state, local, or other entities—need to set clear standards for charters and hold operators to them. NACSA has set out 12 "essential practices" for authorizers, in areas such as establishing renewal and revocation criteria, creating specific terms for charters, and requiring external financial audits of them. Yet authorizers' performance in meeting those standards varies greatly, the report found. (See the table in this post.)

"We want authorizers to be able to articulate what's expected, and measure whether or not it's being achieved," said Medler, adding that the goal is to "put tools in place to make an informed decision about when to make a school closure."

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