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Opinion

Briscoe: Harvard Law Gets Homeschooling All Wrong

By Nicolas Briscoe

In the May-June issue of the Harvard Magazine, journalist Erin O’Donnell published a piece entitled “The Risks of Homeschooling”, in which she alternated between quoting unsubstantiated assumptions and baseless accusations until, mercifully, the nearly 1000-word hit piece on America’s homeschooling parents concluded. O’Donnell relies exclusively on Harvard Law Professor Elizabeth Bartholet to lend some credibility to her thesis that homeschooling is an existential threat both to children and American democracy.

O’Donnell begins by asserting that between 3% and 4% of school-age children in the United States (In 2016, school age children made up about 23% of the population, a total of about 73.6 million kids) are being homeschooled, equating to roughly 2-3 million kids. “Yet”, writes Ms. O’Donnell, “Elizabeth Bartholet, Wasserstein Public Interest Professor of Law and faculty director of the Law School’s Child Advocacy Program, sees risks for children—and society—in homeschooling, and recommends a presumptive ban on the practice. Bartholet goes on to say that homeschooling not only violates children’s right to a “meaningful education” and their right to be protected from child abuse (an implication that homeschooled children are at higher risk of child abuse presented without evidence or substantiation), but it also may [my emphasis] keep them from contributing positively to a democratic society. One wonders what other factors Professor Bartholet believes may keep children from contributing positively to a democratic society so that we may presumptively ban them as well.

            Bartholet further asserts that a largely unregulated regime in the area of homeschooling “means, effectively, that people can homeschool who’ve never gone to school themselves, who don’t read or write themselves.” Bartholet makes this assertion, again, absent any evidence that a significant or even statistically relevant portion of parents who homeschool their children are illiterate. In fact, Dr. Brian Ray of the National Home Education Research Institute (NHERI) contends that the home-educated typically score 15 to 30 percentile points above public school students, and in particular black homeschool typically score 23 to 42 percentile points above black public school students, regardless of parents’ level of formal education or income.

O’Donnell then adds to Bartholet’s assertion, “In another handful of states, parents are not required to register their children as homeschooled; they can simply keep their kids at home.” O’Donnell implies not only that parents are unaware of what is best for their child, but that they are actively working to undermine their children by effectively imprisoning them at home.

            Bartholet says that “this practice” (presumably referring to homeschooling, though the shoddy writing taught to her, no doubt, by an ostensibly qualified teacher makes it difficult to discern) can isolate children. Again, she makes this assertion absent any evidence to substantiate the likelihood that homeschooling isolates children. In fact, NHERI claims that the home-educated typically perform above average on measures of social, emotional, and psychological development (research measures include peer interaction, self-concept, leadership skills, family cohesion, participation in community service, and self-esteem.) If Ms. Bartholet is suggesting that homeschooling isolates children, she would do well to make the affirmative case and support that suggestion, rather than using empty and vacuous intimations that homeschooling “may” isolate children.

            Bartholet then points to Tara Westover’s memoir Educated as an example of the dangers of homeschooling. Westover is the daughter of Idaho survivalists who never sent their children to school. Though she concedes that Westover learned to read, she stresses that she was forced to work in her father’s scrap business and endured abuse by an older brother. Bartholet does not see the book as an isolated case of a family that slipped through the cracks, but as “what can happen under the system in effect in most of the nation.” Again, Bartholet relies heavily on innuendo and implication, suggesting that this “can” happen anywhere, and thus that we “should” enact a presumptive ban. However, this is Bartholet’s only concrete example in a nearly 1000 word essay of a child harmed by homeschooling. Meanwhile, a 2004 study by the Department of Education synthesized existing literature on sexual misconduct engaged in by educators against students. It found that the most accurate data available at the time came from the American Association of University Women (AAUW) and suggested that 9.6% of students are targets of educator sexual misconduct sometimes during their school career. In other words, according to the Department of Education, more than twice the percentage of total homeschoolers in the United States have been targets of sexual misconduct at the hands of regulated school educators. Perhaps if Ms. Bartholet had found time for a quick Google search, and if her true aim was to curb the abuse she imagines is so prevalent in the home, she would have called for a presumptive ban on public schooling rather than homeschooling.

            Professor Bartholet then gets to the heart of her argument against homeschooling. She claims that parents choose homeschooling for a number of reasons, including protecting their child from bullying, or failing schools in their area. She continues, “But [signaling a contradiction where none exists] surveys of homeschoolers show that a majority of such families (by some estimates, up to 90 percent) are driven by conservative Christian beliefs and seek to remove their children from mainstream culture.” Ms. Bartholet could have saved us all valuable time and effort if she had merely acknowledged from the outset that her opposition to homeschooling was a thinly veiled contempt for conservative Christians.

Bartholet goes on to note that some of these parents are “extreme religious ideologues” who question science and promote female subservience and white supremacy. Truthfully, this accusation is simply too ridiculous to engage in an intellectual rebuttal. Similarly unfounded assertions about Prof. Bartholet would be ignorant and uncivil, but would, by her (lack of) reasoning, warrant a presumptive ban on Harvard Law professors.

She concludes by saying that homeschooling will destroy American democracy and that, actually, it is the government who has the right to educate children, and not parents who have the right to dictate how their children are educated. She engages in truly hilarious projection, saying “I think it’s always dangerous to put powerful people in charge of the powerless, and to give the powerful ones total authority.” Meanwhile, Ms. Bartholet, a Harvard professor with immediate access to the halls of power, advocates banning the one refuge maintained by powerless parents against a powerful government education system—the right to educate their children as they believe will be in the children’s best interest. In sum, Professor Bartholet engages in the same baseless accusations, elitist ridicule, and pompous lack of intellectual rigor that have become so inextricably associated with our modern elite universities. One hopes that she can learn a lesson from the average child of home education on the values of empiricism and tolerance of a way of life she so clearly does not understand.

Nicolas Briscoe is a student at University of Miami Law School

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Opinion

Kentucky School Board Member Threatens to Lengthen School Year for School Choice Supporters

by Matthew Nielsen

Chris Brady, an elected member of the Jefferson County School Board in Kentucky, threatened to delay graduation  for the school district if parents and families support school choice.

While he almost certainly doesn’t have the wherewithal to accomplish such a change on his own, the second term board member has a history of using provocative language.

Brady isn’t alone in his reactionary response to school choice proposals. Two top-ranking democratic congresspeople, Rep. Bobby Scott (D – VA) and Senator Patty Murray (D – WA), blasted President Trump’s education proposal last month in the State of the Union address. NEA President Eskelsen Garcia asserted that parents have rejected educational choice programs.

However, the data disagree. In DC alone, nearly half of all school-aged children attend charter schools. Nationwide, about three million students attend charter schools and private schools account for right around 10% of enrollment in grades K-12.

Parents seem to crave choice and they rarely want to give up their options when they’re threatened. It’s no surprise, then, that comments like Mr. Brady’s of Jefferson County Public Schools tend to encourage support for school choice, rather than what he hoped – the opposite.

What happens next for Mr. Brady, and those of his constituents who disregard his directive to eschew upcoming school choice proposals in Kentucky, is unclear. But it does seem apparent that his inappropriately authoritarian tweets aren’t having the desired effect. Families in Kentucky, and across the country, need to know their elected officials are working for them, not against them.

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Opinion

Students’ Test Scores Unchanged After Decades of Federal Intervention in Education

by Lindsey Burke, PhD

Federal “Highly Qualified Teacher” mandates. Adequate Yearly Progress requirements. Smaller learning communities. Improving Teacher Quality State Grants. Reading First. Early Reading First. The dozens of other federal programs authorized via No Child Left Behind. School Improvement Grants. Race to the Top. Common Core.

All of that has been just since 2000. Over those past two decades, while federal policymakers were busy enacting new federal laws, creating mandates for local school leaders, and increasing the Department of Education’s budget from $38 billion in 2000 (unadjusted for inflation) to roughly $70 billion today, the math and reading performance of American high school students remained completely flat. That is to say, stagnant.

The U.S. is now above the Organization for Economic Cooperation and Development average in reading, but alas, not because U.S. reading performance has improved. Rather, other countries have seen declines in reading achievement, despite increases in education spending.

In mathematics, however, U.S. performance has steadily declined over the past two decades.

Those are the findings from the Programme for International Student Assessment, or PISA exams, released last week.

As The New York Times’ Dana Goldstein reported:

About a fifth of American 15-year-olds scored so low on the PISA test that it appeared they had not mastered reading skills expected of a 10-year-old, according to Andreas Schleicher, director of education and skills at the Organization for Economic Cooperation and Development, which administers the exam.

What’s more, the achievement gap between high- and low-performing American students has widened.

The international findings mirror last month’s National Assessment of Educational Progress report, which revealed that math and reading scores across the country have continued a yearslong stagnation, with students largely showing no progress in academic achievement.

Just one-third of students in the fourth and eighth grades reached proficiency in math and reading nationally on the National Assessment of Educational Progress, which is administered every two years.

As with the Programme for International Student Assessment’s findings that the achievement gap stubbornly persists for American students, the National Assessment of Educational Progress highlighted similar findings within the U.S.

The scores of students who are among the lowest 10% of performers on the National Assessment of Educational Progress have dropped significantly since 2009.

The stubborn achievement gap is not new, but the National Assessment of Educational Progress and the Programme for International Student Assessment provide additional data points on its persistence.

As Harvard professor Paul Peterson writes in The Heritage Foundation’s new book “The Not-So-Great Society”:

The achievement gap in the United States is as wide today as it was in 1971.

The performances on math, reading, and science tests between the most advantaged and the most disadvantaged students differ by approximately four years’ worth of learning, a disparity that has remained essentially unchanged for nearly half a century.

One of the more recent, major pieces of federal intervention sold as a way to improve American standing in education was the Common Core State Standards Initiative promoted during the Obama administration.

Common Core national standards and test, proponents argued, would catapult American students to the top of the math and reading pack. It was time, they argued, for the U.S. to have the same “epiphany” Germany did in the late 1990s, and adopt centrally planned national standards and tests.

Germany now lags the U.S. in reading, according to the new Programme for International Student Assessment data, and is far below Canada, a country that does not have national standards.

Indeed, our neighbor to the north has performed consistently well on the Programme for International Student Assessment since 2000, significantly outpacing the United States, and has neither national standards, nor a federal education department.

Canada’s is a decentralized education system, in which Canada’s 10 provinces set education policy.

The fact that Common Core didn’t catalyze improvements in the U.S. isn’t surprising. Large-scale government programs rarely, if ever, do.

But neither have the myriad federal programs created since No Child Left Behind in 2001, nor have the more than 100 federal K-12 education programs created since President Lyndon Johnson launched his Great Society initiative in 1965 designed, ostensibly, to narrow opportunity gaps between the poor and the affluent.

Heritage’s Jonathan Butcher and I detail Yuval Levin’s theory of government failure in “The Not-So-Great Society.” Levin explains that large-scale government programs fail for three reasons:

  1. “Institutionally, the administrative state is ‘dismally inefficient and unresponsive, and therefore ill-suited to our age of endless choice and variety.’”
  2. “Culturally and morally, government efforts to ‘rescue the citizen from the burdens of responsibility [have] undermined the family, self-reliance, and self-government.’”
  3. “Fiscally, large-scale federal programs supporting the welfare state are simply unaffordable, ‘dependent as it is upon dubious economics and the demographic model of a bygone era.’”

Federal government efforts to improve education have been dismal. Even if there were a constitutional basis for its involvement—which there isn’t—the federal government is simply ill-positioned to determine what education policies will best serve the diverse local communities across our vast nation.

The sooner we can acknowledge that improvements will not come from Washington, the sooner we’re likely to see students flourishing in learning environments that reflect their unique needs and desires.

This piece originally appeared in The Daily Signal

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Opinion

School Choice: Ideology vs. Reality

by Matthew Nielsen

In a recent article about how journalists frequently get school choice wrong, I included as one example Mr. Kris Nordstrom of NC Policy Watch. He was identified as a journalist in the piece, but he subsequently corrected me on Twitter. His official job title at the organization is “Senior Policy Analyst,” which creates more concerns about his work product than it does to alleviate them. Be that as it may, his continued employment in that position indicates that someone is pleased with his work product, irrespective of his proclivity for exaggeration and misinformation. Policy analysis seems to have a much wider spectrum of quality than might be hoped.

After deflecting on the two issues raised in my article during our exchange on Twitter, he chose to end the conversation by declining to “teach” me the “difference between achievement and growth,” another false assumption.

I created a document that addressed each of the nine points in his June 2019 article on school choice, in which he also attacked Mr. Joel Ford, a former Democratic state legislator and school choice supporter. I emailed the document to Mr. Nordstrom, which he declined to address.

**Mr. Nordstrom requests corrections to his article.

Below, I have included responses to each of his "nine ways" in which, he alleges, school choice harms public schools in North Carolina. It's worth noting that his chosen headline specifies that schools are hurt, rather than students--an assertion he wanders from periodically in his article. But, it's an important distinction to make--schools or students?

I will not include the full copy of his original article (available here), but you'll find each of his nine allegations along with my responses below.

What Mr. Nordstrom's work lacks in evidence and facts, it more than makes up for in volume--the below is a response to only one of his many anti-educational freedom blog posts:

1. Charter schools and vouchers create budgetary pressures on traditional public schools

a. From the research he cites in his article comes a rebuttal to his own assertion:

2. Charter schools exacerbate the racial segregation of public schools

a. From the research he cites in his article comes a rebuttal to his own assertion:

3. Choice advocates promote biased school performance grades to stigmatize traditional public schools

a. He impugns the motives of Mr. Ford and other school choice advocates without providing any evidence whatsoever. Further, the grading system rates district and charter schools based on the same formula and charters only affect integration minimally, as noted in the research he cited in the previous point.

4. Charters are increasingly turning into an investment scam for real estate investors

a. Baker, Black, and Green assume quite a lot in this piece by nudging speculation into surety. Terms like “as much as” or “up to” turn into “more than” and “over.” A mistake Mr. Nordstrom makes, as well. Further, AZ Republic is the wrong place to get an objective take on Mr. Way in Arizona. Harris, of the Republic, has been discredited time and again (see: here, here, & here).

5. As measured by standardized tests, charters appear to be delivering inferior results

a. By focusing only on growth, he ignores that a higher proportion of charter schools are rated A or B than district schools, statewide. To focus only on growth is deceptive and misleading. Charter schools have consistently shown promising results, as evidenced by their sustained and growing popularity among families throughout the state, and country.

6. The Opportunity Scholarship voucher program subsidizes discrimination and religious indoctrination while costing the state millions each year

a. The voucher program is intended to provide a child with a portion of the financial resources they would have benefited from in a district school. The school they select is their prerogative.

7. Charter advocates prioritize taking money from traditional public schools instead of trying to increase funding for all schools

a. He claims “most charters… get more local funding than their” TPS neighbors. He links to a 2016 article he wrote that never provides data on this. Where is the data to support this claim?

8. Voucher and charter advocates emphasize private benefits to education, eroding the idea of education as a shared, public good

a. Schooling is not a “public good” in the technical sense that you’re using. They’re not “non-rivalrous” and they’re not “non-excludable.” Educational freedom should be available to all families, not just the ones that can afford to live in a particular zip code, or devise ways to game the system.

9. Debates over choice distract policymakers from providing adequate funding and supports to help all students succeed

a. Adding dollars doesn’t seem to improve student learning. Even if it did, dollars have been added and districts are choosing to direct them outside of the classroom. For example, student-to-teacher ratios have decreased since 1992, giving teachers more time to spend with each student. From FY1992 to FY2014, per-student spending increased by 1% in NC, while teacher pay decreased by 8%. (See here)

Rather than stretching evidence beyond the breaking point, policy analysts should consider analyzing how policies actually affect students and families. Sooner, or later, readers will discover who has been attempting to pass ideology off as reality.

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Opinion

Activist Reporters Reject Facts on School Choice

by Matthew Nielsen

Journalists around the country have made a name for themselves, some more successfully than others, by attacking school choice. The ramp-up of these attacks could simply be a byproduct of organizing efforts of teacher unions, which vehemently oppose school choice in all its forms. On the other hand, there is certainly a possibility that much of the lobbying efforts of the well-funded teacher unions are being directed toward media outlets that are largely friendly to their agenda. 

Unfortunately for subscribers and readers, facts aren’t always the priority in articles published by activist journalists for whom the ends justify the means. If a few half-truths are necessary to turn public opinion against quality school options outside of district schools, that’s a small price to pay in order to keep in the good graces of some of the largest employee unions in America.

Little surprise, then, that when errors and omissions are pointed out to these reporters, retractions and corrections are made silently if they’re made at all. This maximizes the negative effects on school choice and minimizes accountability for the error-prone reporters. 

Reporters who repeat errors after they’ve been provided with correct information do so in order to perpetuate a narrative that aligns with their ideology.

Like many other anti-school choice zealots, Mr. Nordstrom* of NC Policy Watch disregards the facts that don’t suit his agenda when it comes to educational freedom. He is consistently in favor of not just limiting, but eliminating individual choice in education. He regularly writes articles that attack charter schools and private schools while extolling the assumed inexhaustible virtues of government schools.

In this article, Mr. Nordstrom misstates several facts but none so severely as his assertion that charter and voucher schools “siphon” money from district schools.  He cites a study by Helen Ladd and John Singleton, The Fiscal Externalities of Charter Schools: Evidence from North Carolina that finds a “large and negative fiscal impact from $500-$700 per pupil in our one urban school district and somewhat smaller, but still significant, fiscal externalities on the non-urban districts in our sample.”  Nordstrom ignores the shortcomings of the study, such as the fact that Ladd and Singleton examined only six of the 59 counties that had one or more charter schools during the 2015-16 school year. More importantly, he fails to justify their unorthodox determination and treatment of variable and fixed costs.

Mr. Nordstrom also asserts that schools of choice are responsible for racial segregation and segmentation in North Carolina schools.  In his 2018 report, “Stymied by Segregation: How Integration Can Transform North Carolina Schools and the Lives of Its Students,” Nordstrom writes, “Research clearly demonstrates that North Carolina’s charter schools have contributed to increasing racial segregation.” Yet, only around 6 percent of public school students attend charter schools, and much of his case is based on simple correlations, rather than on methods that establish causation.  He ignores basic facts about charter school laws, such as the requirement that charter schools use a lottery when applicants outnumber seats. Selecting students randomly, among other factors, precludes the ability to mirror the demographics of nearby school districts.

Of the 20 most recent articles published by reporter Craig Harris (Arizona Republic), 16 are about charter schools. One of those 16 articles is what can be considered “generally positive” toward school choice. Unfortunately for him, it seems Mr. Harris has had to make a number of retractions to his articles for reporting faulty information.

Perhaps the most egregious example of misinformation by Mr. Harris is his pointed accusations against a charter school accountant in Arizona that, after nearly a year of investigations, seems to be quite close to complete exoneration. 

The Arizona State Board of Accountancy’s hired investigator, Marshall  “King was most critical, calling Huber's work "woefully below" auditing standards.” Though Harris hasn’t reported it, the Mr. King referred to made up to 36 errors in his investigation of the charter school accountant in question. In the meantime, though, the accountant has been out of work and unable to provide for his family. If Harris is remorseful for the false accusations that led to this tragedy, he hasn’t made that public. 

Reporter Valerie Strauss (Washington Post) is known for the consistent surrender of her column to other anti-school choice, and pro-union, individuals from across the country. An introductory paragraph or two and the remainder is yielded to a friend of the unions.

In this case, the space is granted to Carol Burris, the Executive Director at “Network for Public Education” (“NPE”). This organization was founded by the inimitable Diane Ravitch. (Once a strong proponent of school choice, Ravitch changed her mind about educational freedom in the early 2000’s for reasons that are still somewhat opaque.)

Ms. Burris takes every opportunity to rail against charter schools, which are largely made up of minority students in Pennsylvania. She opts for the path of least resistance by citing examples of alleged mismanagement in an effort to paint all school choice with the same broad brush. Her examples of schools in financial trouble or needing tighter operational controls are not without their corollaries in district schools—with one important caveat: district schools are granted near unlimited “second chances.” 

One wonders whether her ire would be so intense if she had ever visited the venerable Boys Latin school of Philadelphia, where founder David Hardy has created a lighthouse of learning for young men year after year, or countless other “non-district” providers of education that are not just doing well, but outperforming district schools across the country.

Disregarding the facts, even after they’re pointed out, leads to erosion of trust in the press--a sad reality today. Fortunately, despite the best efforts of reporters like these, families still choose choice. When given the freedom to choose, they’ll use that opportunity to select an option that best fits their children. Families could use more reporters that recognize the benefits of freedom and are willing to report them.

 

*Mr. Nordstrom is not a journalist, but a "Sr. Policy Analyst."

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Opinion Uncategorized

Cyber Monday, Free-Market Friday and Educational Freedom alike Honor the Legacy of the Pilgrims

While some over the years have lamented the fact that the Thanksgiving holiday is encroached upon by “Black Friday” advertisements and the crowds that result from the busiest shopping days of the year, in critical ways this celebration of private enterprise is a tribute to the most important lessons from Plymouth.

As Tom Bethell of the Hoover Institution describes, it was a rejection of the communal economic system that had utterly failed the pilgrims for three consecutive years in favor of private property rights that led to the bountiful harvest of 1623. Financiers of the colony prohibited private ownership of homes and gardens out of fear that colonists with their own properties would neglect the collective effort to which the financiers were entitled a 50% share. With few options available to finance their voyage, the pilgrims accepted these unfavorable terms.

After much death and famine, the young colony recognized that a new economic order must be adopted to prevent further starvation. In Governor William Bradford’s own account Of Plymouth Plantation (see pages 162-164) he records how the colony assigned each family a parcel of land and empowered each family with the rights to enjoy the fruits of their own labors. Under this new system, Governor Bradford describes that far more corn was planted and the people were much more content, “for it made all hands very industrious.” He continues:

“The women now went willingly into the field and took their little ones with them, to set corn, which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression.

“The experience that was had in this common course and condition, tried sundry years, and that amongst godly and sober men, may well evince the vanity of that conceit of Plato and other ancients…that the taking away of property, and bringing in community into a common wealth, would make them happier and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort.

“For the young men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children without any recompense. The strong, or man of parts, had no more in division of victuals and clothes, than he that was weak and not able to do a quarter the other could; this was thought injustice. The aged and graver men to be ranked and equalized in labor, and victuals, clothes etc., with the meaner and younger sort, thought it some indignity and disrespect unto them. And for men’s wives to be commanded to do service for other men, as dressing their meat, washing their clothes, etc., they deemed it a kind of slavery, neither could many husbands well brook it.”

The virtues of private enterprise were recognized by America’s earliest European settlers and became an important part of America’s DNA. The respect for private property was subsequently enshrined in our Constitution’s Bill of Rights which states that “[no person shall] be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation” (Amendment V).

These free-market, limited-government principles that our country was founded upon led our country to be the most productive economy in the world and has done more to lift individuals out of poverty than any government program ever could.

Additionally, these principles of freedom have been exported across the globe and have benefitted the citizens of many different countries where governments have similarly adopted policies that respect private property and individual rights.

In contrast, every time communal systems have been tried, the result has been the same devastation as was seen in the pilgrims’first three years.

It is overwhelmingly disturbing to see the devastation ravaging the once wealthy and powerful country of Venezuela. Earlier this year, an article in The New York Times documented the horrors of the failed policies of the Nicolás Maduro and Hugo Cháves regimes that confiscated entire industries of private property to put in place a command economy.

“It’s really hard to think of a human tragedy of this scale outside civil war,” the New York Times quotes Kenneth Rogoff, of Harvard University, who was previously a chief economist forthe International Monetary Fund. “This will be a touchstone of disastrous policies for decades to come.”

The Heritage Foundation’s 2019 Index of Economic Freedom ranks Venezuela 179th in economic freedom right between the communist regimes of Cuba and North Korea—two countries whose devastation resulting from the lack of respect for private property has rivaled that of Venezuela.

North Korea provides particularly striking evidence that the country’s economic woes are the result of its communist policies. Much like the divided Berlin of a generation ago, the regions of North and South Korea had similar economies prior to the country’s post World War II division. But, with a Russia installed communist government in place in the north and a U.S. allied government to the south, significant divergences emerged in the standards of living, GDP, health and wellness, and even life expectancy among the Korean populations divided by the 38th parallel.

The chart below reported by the BBC shows the tremendous difference in production that results from a Korean economy that is liberated and respects private property and one that remains isolated under authoritarian communist control.

control.

As South Korea enacted free market policies, its economy flourished and grew to be the 12th largest in the world while communism continues to condemn Koreans in the north to perpetual poverty.

Perhaps the only image more compelling than the GDP comparison above is the view from space of the Korean  Peninsula at night. In the image below, South Korea is seen as a thriving metropolis brightly illuminating the night sky while the outlined North Korea is barely distinguishable from the ocean waters to its east and west.

west.

From Communist Russia to Cuba, from North Korea to Venezuela and every other nation state that has rejected the principles of free enterprise and private property, the results have been the same: poverty for all except the oppressive ruling class (note the small light emanating from the North Korean capital while the rest of the country remains in darkness).

With private enterprise being such an integral part of the American story and of America’s success, and with such stark examples of the very real harm that befalls all who live within economic systems that do not respect private property, I struggle to understand why some are so quick to condemn the successes of private entrepreneurs operating fairly in a free marketplace.

The Arizona Republic’s coverage of the private entities that provide public charter school educational services in Arizona is the latest example of this contradiction. Charter school laws were designed to harness the awesome power of the free marketplace to improve the quality of our public school education. And, for that reason, the laws were written to treat each charter holder as a private entity that would rise or fall on its own merits—on its ability to attract and retain students whose parents determined that the charter holder’s offering was the best fit for their children.

This model has proven to be a tremendous success for all public school students in Arizona. As a leader in the school choice movement, Arizona was the first state to reach the critical mass of competition that was necessary to realize all of the anticipated benefits of a robust marketplace for K-12 education.

As Robert Robb describes in his column focusing on Matt Ladner’s analysis of test results, Arizona students’ improvement on the National Assessment of Education Progress from 2005 to 2017 was double the national average because of the competitive marketplace for K-12 education. These increases in NAEP scores did not just occur at charter schools. The invisible hand of the free marketplace that Adam Smith described in 1776 is alive and well in Arizona’s K-12 education system. The competition for students resulted in increased learning at all schools. Just as Ronald Reagan characterized the competitive marketplace, educational freedom has created a rising tide that has lifted all boats.

This is an amazing success story that should be celebrated and replicated. Instead, the reporters at the Arizona Republic, astonishingly, imply that the state should reverse course from this tremendous success. Their reporting suggests that the state should not contract with private entities to provide these educational services. Article after article condemns standard business practices that are essential rights of a private enterprise. These condemned practices include earning a profit, establishing the private entity’s own procurement processes that protect its interests, and accumulating privately owned property.

The Republic reports these practices as somehow nefarious because they cannot occur at governmental entities, such as school districts. But this perspective ignores the fact that the state deliberately allowed for privately-held enterprises to compete with the government-provided services in an effort to improve all educational outcomes and that improvement has resulted. It ignores the fact that these traits make up the fundamental differences between the public sector and private enterprise. And, it ignores the fact that these traits are what make free enterprise so effective at creating value for customers and owners in addition to all other participants in the economy.

Additionally, the marketplace makes all private-sector actors accountable to their customers. Private-sector education providers are 100% accountable to parents for every state dollar that the private entity receives. If the parents of charter school students or private school students funded by taxpayer supported scholarships decide that the services provided at their school are insufficient then they enroll their students in a different school. If too few parents choose to enroll their students at a school then it closes. This is the complete accountability that makes the marketplace so powerful and effective. It rewards enterprises that successfully provide sought after goods and services while indifferently allowing those who do not to fail.

Twenty years ago, Arizona decided to open its K-12 public education services to the private sector to allow the competitive marketplace to work its magic. As the utilization of school choice has increased over two decades so have educational outcomes. Arizona applied the principle that William Bradford understood: private ownership over the means of production leads to innovations, efficiencies and increased productivity.The principle has held true everywhere it has been tested.

As Americans, we annually remember the important example of gratitude set by the surviving Mayflower passengers who finally achieved their much needed harvest. Let’s also remember their important turn towards privatizing their economy.

As private enterprise continues to benefit America’s economy and Arizona’s schools, let’s honor the pilgrims’ legacy with continued support for free markets. Let’s celebrate the fact that all Arizona schools have improved their educational results after the enactment of educational choice. Let’s celebrate the fact that the third best high school in the country is located in Arizona and was founded here due to Arizona’s free market for education. And, instead of treating the private entrepreneurs in educational services as some sort of robber barons for having earned a reasonable return after decades of building a business from scratch, let’s celebrate the fact that a wonderful variety of educational environments are available to Arizonans due to their efforts.

As expected, the marketplace aligned the interests of individuals with the broader interests of the community. Let’s celebrate this invisible hand that created a wonderful rising tide for all of Arizona’s public school students.

Categories
Opinion

Builders Continue to Fund School District Bond and Override Campaigns

by Justin Olson

In 2017, authors Evan Wyloge and Carrie Jung reported through a collaboration between the Arizona Center for Investigative Reporting and KJZZ that “a small group of builders bankroll bond campaigns and dominate K-12 construction contracts." The authors evaluated hundreds of campaign reports filed between 2013 and 2016 by groups that supported school district bonds and overrides and found that a majority of the funding came from construction and design firms.

As Arizona voters will cast their ballots by the end of this week to decide the fate of 21 different school district bond proposals and 39 separate budget overrides, we thought it would be worthwhile to look at the campaign finance reports filed by the groups supporting this year’s ballot measures to see if Wyloge and Jung’s findings continue to hold true.

For our sample, we evaluated the reports of campaign committees supporting the seven largest bond proposals and the seven largest overrides. These proposals accounted for 72% of the total bond amount requested by all of Arizona’s school districts and 67% of the total override amount. This sampling resulted in the evaluation of 12 campaign committees since the Deer Valley Unified and the Gilbert Unified School Districts each made the top seven lists for both bonds and overrides.

Like Wyloge and Jung, we found that this year’s ballot measures were also primarily funded by the same small group of vendors that also consistently win the bids to build the projects that the campaigns support. Their 2017 article included data compiled by the Arizona Builders Exchange (AZBEX).

AZBEX indicated that more than half of the projects awarded through the public procurement process from 2013 to 2016 went to a small group of nine vendors. The group of nine included three construction firms (Chasse Building Team, CORE Construction, and McCarthy Building Companies), three architecture and design firms (Orcutt Winslow Architecture, ADM Group, and DLR Group) and three subcontractors (Pueblo Mechanical and Controls, Wholesale Floors, and Progressive Roofing).

Contributions from these nine vendors made up 48% of the contributions supporting the measures of the 12 school districts in our sample.

The top three contributors to these ballot measures were the three construction firms included in AZBEX group of nine vendors that consistently win the bids.

Chasse Building Team contributed more than any other vendor with a total contribution amount of $91,000. Chasse contributed to 11 of the 12 campaigns in our sample with contributions ranging from $5,000 to $9,800 for an average contribution amount of $8,273.

CORE Construction contributed the next highest amount with contributions totaling $85,000. CORE contributed to all 12 of the campaigns in the sample with contributions ranging from $1,000 to $9,500 and average contribution of $7,083.

McCarthy Construction contributed the third highest amount with contributions totaling $75,500. McCarthy contributed to 10 of the 12 campaigns with contributions ranging from $5,000 to $9,900 for an average contribution of $7,550.

While these nine vendors contributed nearly the majority of the funds received by these campaigns they were not the only vendors to support these efforts.

In fact, a full 86% of the campaign contributions received by these districts came from vendors while the remaining 14% came either from other committees or directly from individuals such as school district employees, parents and other members of the community.

Remarkably, several of the campaigns didn’t even bother to fundraise among individuals at all, instead, opting to fund 100% of their campaigns through vendors that have either won contracts with the school or hope to win them in the future. These campaigns included those for the bonds and overrides of Chandler Unified, Tolleson Union, Deer Valley Unified, and Higley Unified.

The campaign for Chandler Unified’s bond proposal raised more than any other campaign in our sample which is not surprising considering the $290 million bond proposal is the largest measure on the ballot. This campaign raised 100% of its $146,900 from vendors. The largest contribution of $17,500 came from Concord General Contracting, followed by a $10,000 contribution from HDA Architects and nearly $10,000 contributions from each of the three construction firms mentioned above: McCarthy ($9,900), Chasse ($9,800), and CORE ($9,500)

The practice of calling on the development community to fund school district campaigns is not unique to Arizona. For example, Will Huntsberry reported in the Voice of San Diego that “80 percent of the construction companies that donated $5,000 or more to pro-bond campaign groups in the last seven years received contracts with the San Diego Unified School District.”

Elena Kadvany, similarly, identified $74,500 of the $130,000 (or 57%) raised by the campaign supporting the Palo Alto School District’s bond measure was raised from construction, building and legal firms that contract with the district.

In 2012, David Olinger in the Denver Post reported the Neenan Construction Company contributed $30,000 to a bond effort of the Adams County Mapleton School District before being awarded the $53 million contract to build five schools. Similarly, George K. Baum & Co. contributed $30,763 and was selected to underwrite the bond for a fee that was seven times the rate charged on other bond sales around the same time.

And, lastly, in 2016, the California Policy Center’s Andrew Heritage reported on the practice in school bond campaigns across Orange County and described a concern of some elected officials of the appearance of a “pay-to-play” requirement.

As I reported earlier this month, if approved these bond proposals will authorize $1.6 billion in new school debt and a corresponding amount of new construction. The debt would be repaid by $2.5 billion of new property taxes to be levied over the life of the bonds. The overrides would authorize $297 million of annual spending above the districts’ budget limits which will also be funded through taxes on property.

As this is a mail-in only election, voters must mail their ballots in time for the post office to deliver the ballot to their county offices by next week’s November 5th Election Day.

 

 

Categories
Opinion

Voters to Decide: $1.6B in K-12 Bond Proposals, $297M in Budget Overrides

by Justin Olson

In this odd-numbered year no candidates are up for election. Still, ballots will be counted this November since school districts can ask voters to approve bonds and overrides in any year.

With their ballots that will be hitting mailboxes any day, Arizonans will be asked to approve 21 different school district bond proposals and 39 separate budget override requests. If approved, the bond proposals will authorize $1.6 billion in new school debt and a corresponding $2.5 billion of property tax debt service levies over the life of the bonds. The overrides will lead to an annual property tax levy of $297 million for each of the next five years.

As school finance in Arizona can oftentimes seem a bit complex, we thought we would break down some of the basic facts about these school district ballot measures.

What is a bond?

A vote for a new bond issuance does two things: first, it authorizes the district to enter into new debt, and, second, it allows a new property tax to fund the annual principle and interest payments on the new debt.  With authorization from the voters, a school district can sell bonds to raise funds to purchase physical assets such as school buildings, vehicles, text books, furniture, and computers and other technology. The bonds are sold to investors in the capital markets with a promise to repay the amount borrowed together with annually accrued interest. The district then uses its property taxing authority to raise the revenues for the annual debt service payments.

What is an override?

A budget override authorizes a school district to levy a property tax to fund spending above the amount allowed under a budget limit called the equalization base. Arizona created the equalization base in the 1980s in an attempt to create more equity across the state in school district expenditures and tax rates.

Prior to the 1980 reforms, the state had very little involvement in school district taxing and spending decisions. Due to court rulings that the Arizona Constitution requires the state to attempt to create more uniformity in school district expenses, the state established this budget limit based on the number of students enrolled in each district.

To decrease the reliance on local property taxes, the equalization base is largely funded with state revenues. For example, for fiscal year 2020 the state funded $4.5 billion of the equalization base while the remaining $2.6 billion was funded through school district property taxes.

If school districts spent only the amount authorized by the equalization base then the average amount spent per student would be about the same in each district. But the school finance laws allow for several exceptions to this budget limit. Among those exceptions are the voter-approved budget overrides that are funded through local property taxes.

With these overrides, districts can increase their budgets by up to 15% for their maintenance and operations expenses which include primarily employee salaries and benefits. Districts can also seek an increase of up to another 10% to spend on physical assets through additional assistance overrides.

Will my taxes increase?

All of the bonds and overrides on the ballot are funded by property taxes. So passing any of these measures will lead to a higher property tax bill than would be due if the measures are rejected.

To determine whether a property tax bill will be higher than the previous year’s bill as a result of one of these measures, however, requires additional analysis. Property tax bills can be somewhat complex since there are many potential changes that can impact a bill. With so many moving parts, it can be difficult at times to identify what jurisdiction is responsible for a particular bill’s increase.

Oftentimes a taxing jurisdiction will argue that a proposal will not increase taxes because the tax rate will remain the same after the measure is approved. This means that the rate is set to decrease unless the voters authorize the new bond or override.

Additionally, in the current environment where homeowner’s assessed values are increasing, a tax rate that remains the same will lead to a higher property tax bill since the rate is applied to the higher assessed value. Voters that are concerned about a bill going up relative to the previous year will need to compare the proposed tax rate applied to the voter’s most recent assessed value to determine what will be the actual bill impact of the proposed rate.

Why is this on the ballot again?

Overrides can only be approved for up to seven years with a phase down of the override amount required in the last two years. For that reason, most districts that have voter-approved overrides in place will ask voters to adopt a new override before the existing one begins to phase down.

Additionally, if voters reject a bond or override there is nothing that prevents the district from sending the measure back to the voters in the following year. In Maricopa County there are a few examples of bond and override questions that are on the ballot this year after the voters rejected similar measures in the 2018 election.

These examples include the Buckeye Elementary School District where voters last year rejected a $65 million bond proposal with 57% voting no and 43% voting in support. This year the district seeks approval of a $54 million similar proposal. Additionally, the Nadaburg Unified School District voters narrowly rejected a $2.3 million bond proposal last year, and the district now seeks a slightly higher $2.4 million similar authorization. Lastly, voters in the Mesa Unified School District will be voting this month on the same 15% budget override that they narrowly defeated last November.

How can I be sure the additional tax revenues will benefit my child?

Individual districts have a lot of autonomy in how to budget their resources. This results in significant differences in the percentage of educational dollars that reach the classroom from district to district as is seen annually in the Arizona Auditor General’s report on instructional spending.

The percentage spent on instructional support is as high as 78.1% in the Blue Elementary School District and as low as 34.6% in the Red Mesa Unified School District. There is even a wide range among large districts where one would expect less variability. With 61.6% spent on instruction, the Chandler Unified School District leads among the state’s largest districts and is solidly ahead of Tucson Unified where 51.1% reaches the classroom.

School districts’ governing boards adopt budgets annually. It is during this budget process and during the election of school board members that voters can have the most influence on ensuring that the districts’ resources are prioritized on instructional spending.

When is the election?

Like every year, Election Day is the first Tuesday after the first Monday in November. But, as this is a mail-in only election, voters will need to cast their ballots in plenty of time for the post office to deliver the ballot to the county by November 5th.

Categories
Opinion

Cardine’s Misleading Red Flags Neglect Accounting Standard Norms

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by Justin Olson

In his policy report titled Red Flags issued earlier this year, Curtis Cardine argues that the charter school industry in Arizona is overleveraged. The 60 page report hinges on Mr. Cardine’s calculation of long-term, lease-adjusted debt of charter schools, but his calculation includes a critical flaw. Without this error in his determination of the schools’ debt levels, the support for the report’s thesis completely falls apart.

On page five of the report, the author states that Arizona charter schools’ aggregate debt level exceeds the combined value of their assets making the industry “underwater.” But the first footnote on the same page of the report betrays the author’s miscalculation. Mr. Cardine defines the charter schools’ debt levels to include “long-term debt payments and all of the amounts of contractually-committed lease agreements” (emphasis added). This definition dramatically overstates debt levels by considering the interest payments included in long-term lease agreements as part of the schools’ outstanding debt.

Long-term leases are a standard financing mechanism used in all industries including charter schools. Like mortgages, many long-term leases are contractual agreements that last 20-years or more. These financing instruments include a market rate of interest returned to the lessor as well as amortization of the principal value of the amount owed.

Whether or not the interest component of the lease payment is identified in the contract does not change the economics of this financing instrument. All lessors expect a market rate of return on their investment. For this reason, the generally accepted accounting principles (GAAP) that all accounting professionals in the United States must follow require financial statements to segregate payments on long-term leases into an interest expense component and a reduction of the principal owed on the lease liability (see exhibit 3 below).

Similarly, these same rules require the total lease liability to reflect the present value of the lease payments which is much less than the sum of all the lease payments that Mr. Cardine included in his calculation. The present value of all future lease payments equals the total of the lease payments minus the value of the interest component to account for the time value of money.

GAAP provides two different methods for determining this interest component. The first method finds the lessor’s implicit interest rate. This is simply done by determining the amount that the total of the lease payments will exceed the fair value of the leased asset. This excess is the lessor’s implicit interest from which the implied interest rate can be calculated. Alternatively, GAAP allows for the use of the interest rate that the lessee could obtain for a similarly sized loan.

For a thorough explanation of lease accounting see The CPA Journal article Accounting for Leases Under the New Standard. The article includes the example depicted in the nearby chart labeled exhibit 3.

Exhibit 3 shows the accounting of a 15-year financing lease of an asset that is worth $1 million. The annual lease payment is $131,473 resulting in a total of $1.97 million of contractually committed lease payments over the 15-year term of the lease.

The asset has a 15-year useful life which makes the fair value of the lease equal to the $1 million market value of the asset. This means the lease payments will exceed the fair value of the leased asset by $972,095 over the 15-year life of the lease. This corresponds to a 10% annual interest rate being charged on the amount of the lease liability that remains outstanding in each of the annual accounting periods of the lease.

Exhibit 3 demonstrates that the accounting rules recognize this lease as a $1 million lease liability debt. The first year’s $131,473 lease payment will include $100,000 of interest (10% times the $1 million of outstanding liability) and a $31,473 reduction in the outstanding debt.

Under Mr. Cardine’s definition, in contrast, this debt would have been nearly 100% overstated as a $1.97 million debt on an asset that is worth only $1 million. Mr. Cardine’s method for determining charter school debt levels is clearly not consistent with accounting standards.

Mr. Cardine’s calculation of charter school debt levels and his corresponding conclusion that the industry is underwater is equivalent to comparing the total principal and interest payments that a home purchaser will make over the life of a mortgage and concluding that the homeowner is upside down in the property immediately upon closing escrow.

Anyone that has purchased a home will be familiar with the Truth-in-Lending Disclosure Statement such as the sample disclosure below. In the sample below, the borrower is purchasing a $500,000 home and financing $400,000 of the purchase (the figure reported as the amount financed on the form is the amount of the loan minus the amount of certain closing costs and prepaid items paid by the buyer). The buyer of this home will make a sizable down payment equal to 20% of the value of the property.

Notwithstanding this significant down payment, the total of all the principal and interest payments that the buyer will make over the life of the loan ($773,021) will significantly exceed the current value of the home. Following Mr. Cardine’s logic, this very prudent, low-risk borrower is “underwater” and “financially vulnerable” because the principal and interest payments he is obligated to pay exceed the current value of the home.

Similarly, school districts borrow to construct school facilities and to finance other capital improvements. Mr. Cardine’s treatment of charter school lease payments would be congruent to considering all the scheduled interest payments that a district will pay over the life of a bond as part of the school district’s debt level.

For example, below is the proposed debt service schedule included in the voter guide for a bond proposal that a school district asked voters to support. As seen under the heading “proposed additional bonds,” the school district sought to issue $20 million of new debt. Over the life of the bonds, the district would pay $11.9 million of interest. In total, the district would pay $31.9 million in debt service payments in order to purchase $20 million worth of capital improvements.

Like the home buyer, the fact that the contractually obligated principal and interest payments of this bond proposal are 159% of the value of the financed capital improvements does not make this school district “underwater” or “financially vulnerable.” The interest paid is the cost of borrowing. While some might argue against incurring debt because of the added interest costs, yet-to-be-accrued interest costs are never appropriately considered part of an entity’s debt level in determining the strength of the organization’s balance sheet.

The fact that Mr. Cardine included the yet-to-be-accrued interest of charter school finance instruments in his analysis seems to imply one of two conclusions: He was either negligent in his disregard of accounting standards, or, driven by an ideological opposition to charter schools, he deliberately sought to mislead. Either explanation for this error calls into question his credibility and the usefulness of the report that he produced.

Categories
Opinion

Charter School Audits and the Rights of the Accused