Outsourcing Public Schooling

What do you do with a public school district that spends more than $16,500 per student, runs deficits upwards of $11 million, and where student performance has stalled? Outsource school management, according to officials in one Michigan city.

Highland Park City Schools are among the lowest ranked schools in the state. Highland Park Community High School ranks in the 0 percentile. Meanwhile, the district’s two K-12 schools rank in the 7th and 17th percentiles.

In all, barely one in 10 of the district’s high schoolers are proficient in reading, and none are proficient in math according to state exam results. Just 22 percent of third graders pass state reading exams, and only 10 percent are proficient in math.

This fall students and their families will have better options. The Leona Group charter company will take over management of Highland Park City Schools. It operates 22 Michigan schools, and 19 have a majority passing state assessments. Leona’s Saginaw Preparatory Academy and Academy for Business & Technology elementary have even been named among Michigan’s top schools “Beating the Odds” by the Michigan Department of Education.

Charter schools are public schools, following the same rules district-run public schools do: being open to all students tuition-free, and administering the same assessments. The big difference is that charters do not have all the district bureaucracy and cost. Freed from this constraint, charters have more flexibility to innovate and have more control over staffing and curricula. As the Wall Street Journal reported:

Charter schools—public schools run by outside entities using taxpayer funds—are free from many administrative constraints, including union contracts, and typically spend less than traditional schools per student.…

“This could be the new model for public education,” said Jeanne Allen, president of the Center for Education Reform, a national research and advocacy group that supports school choice. “It stands to be a lab of innovation where people can see that thinking outside the box is not so scary.”…

Highland Park decided to privatize its schools after years of enrollment decline, poor fiscal stewardship and allegations that a board member stole more than $125,000 by submitting false invoices; the charges against the member are pending.…

Phoenix-based Leona will receive $7,110 per pupil in state funding, plus an as-yet-undetermined amount of federal funds for low-income and special education students…

Unions have been sidelined after the district’s entire professional staff was laid off, as allowed by the state emergency law, but teachers can apply for jobs with Leona. Leona has budgeted about $36,000 a year for Highland Park teachers on average, the company said—compared with almost $65,000 a year the teachers received in the 2010-11 school year.

In a typical school it takes over, Leona has hired back about 70 percent of the teachers, the company said. Leona also will lease the Highland Park district’s buildings. Under the five-year contract with Leona, the new city charter board will monitor the company’s progress in improving student performance.

The move by Highland Park city officials to transfer school management from a failed bureaucracy and entrenched special interest groups including teachers unions appears to be part of a growing trend. New Orleans, for example, created the country’s first choice-based, all-charter public school district seven years ago.

This model closely resembles Milton Friedman’s vision of decoupling public financing of schools from government management of schools. The core of this vision is that parents must be free to choose the educational setting they believe is best for their children. Let schools compete for students and their education dollars with innovative, effective educators and curricula. Armed with options, parents will be better stewards of public education funding because if schools fail their children, parents will take them and their education funding elsewhere–no more waiting around for years or decades at a time for schools to turn themselves around.

Of course, the public education establishment in Michigan and elsewhere decries “outsourcing” as the end of public education as we know it. But that’s exactly the point. For too long our public schooling system has compelled parents to outsource their children’s education to it—and just look at the results.