Attempting to solve financial disaster by outsourcing schools – is Ohio next?

America’s states, cities and schools are hurting big time financially. This is not news but the fact that the bad news keeps coming especially hurts.  For example, just released unemployment numbers show an increase to 8.3 percent as American households lost 195,000 jobs. The underemployment rate – which includes those who are underemployed or who are working part time rose to 15 percent. This economic pain has struck education hard, leaving public school budgets strapped for cash and making business-as-usual more and more difficult. Districts around the country are now starting to take some drastic, and sometimes controversial, actions.

Highland Parks Public Schools, a small district in Michigan that is one the state’s lowest-performers, is on the verge of financial collapse. It made news last week when officials there announced plans to outsource its schools to a private for-profit charter school operator. The district handed over operations to The Leona Group which runs 54 schools in five states; 22 of its schools are in Michigan. The Leona Group will now oversee decisions around the hiring of staff, school curriculum and instruction, as well as school facility and maintenance issues.

What led up to such drastic action and are more districts right behind Highland Parks Public Schools? A perfect storm of low enrollment, poor fiscal management, and some of the worst academic results in the state prompted Highland Parks Public Schools to take bold action. Since 2006 district enrollment has dropped by 58 percent, with only 989 students currently enrolled.  The district’s per-pupil spending of $16,508 far exceeds the state average of $9,202, and it faces a current deficit of $11 million with projections that it could grow another $4 million within a month.  In addition to the grave fiscal situation, Highland Parks has failed academically.  Only 22 percent of the district’s third graders are proficient in reading and in math the situation is even worse: only 10 percent of students perform at or above the proficient level.

By outsourcing its schools to The Leona Group, Highlands Park Public Schools hopes to save and turnaround a district that is on life support. While the Leona Group academic performance record isn’t glowing, it has managed to achieve a graduation rate of above 85 percent in several Detroit high schools. The Leona Group currently operates ten charter schools in Ohio, of which all but two have dismal academic ratings.

Things are so bad in Highland Parks it makes since to take a risk on Leona. And, next door in Ohio we will be paying attention to how this works out because several Buckeye State districts are facing similar financial and academic woes, possibly making them good candidates for a similar approach. Five Ohio districts are currently on the fiscal emergency list with declining enrollment and higher than average student expenditures.

Furthermore, one of the state’s largest and perennially troubled districts -- Cleveland Metropolitan School District--could be a prime candidate for a charter takeover if its levy request fails this fall. CMSD is seeking a 15 mill levy from taxpayers, a large chunk of which would go to restore 50 previously cut minutes of instruction to every school day.  A recent five-year forecast from the CMSD paints a dismal picture for the district. Average Daily Membership for the district is forecasted to decline by almost five thousand students in the next four years. The current tax collection rate of 80.9 percent will most likely remain the same if not worsen, and for FY 2013 a $66 million deficit is projected, worsening to $151.7 million in FY 2014. These financial miseries combined with chronically anemic student performance data could be cause for Cleveland to face tough medicine likes schools in Highlands Park. Voters in Cleveland should pay close attention to what’s going on in Michigan as their choice in November’s levy will have a real impact on who runs their schools.  

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