COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES HOUSE EDUCATION COMMITTEE
STATE MUSEUM AUDITORIUM HARRISBURG, PENNSYLVANIA
WEDNESDAY, SEPTEMBER 19, 2007 12:06 P.M.
PUBLIC HEARING ON HOUSE BILLS 446, 738, 1407, AND 1655
BEFORE:
HONORABLE JAMES R. ROEBUCK, JR., CHAIRMAN HONORABLE KAREN D. BEYER HONORABLE LAWRENCE H. CURRY HONORABLE MICHAEL FLECK HONORABLE RICHARD T. GRUCELA HONORABLE MICHAEL K. HANNA HONORABLE DAYLIN LEACH HONORABLE MARK LONGIETTI HONORABLE JOHN E. PALLONE HONORABLE SAM ROHRER HONORABLE CURTIS G. SONNEY
2
1 (CONT'D)
2 ALSO PRESENT: 3 HONORABLE PAUL CLYMER 4 HONORABLE GREG VITALI
5 CHRISTOPHER WAKELY, EXECUTIVE DIRECTOR (D) JENNIFER HOOVER, EXECUTIVE DIRECTOR (R) 6
7
8 BRENDA S. HAMILTON, RPR REPORTER - NOTARY PUBLIC 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
3
1 INDEX
2 NAME PAGE
3 THOMAS GLUCK, EXECUTIVE DEPUTY SECRETARY 9
4 DR. JOSEPH LEWIS, SUPERINTENDENT 16
5 DR. RONALD MCCAHAN, SUPERINTENDENT 21
6 JAMES TESTERMAN, PRESIDENT, PSEA 25
7 JAY HIMES, CAE, EXEC. DIRECTOR 30
8 DONNA LES, PSBA, BUSINESS MANAGER 34
9 TIM ALLWEIN, PSBA, ASSIST. EXEC. DIR. 68
10 LAWRENCE FEINBERG, SCHOOL DISTRICT OF 68 HAVERFORD TOWNSHIP AND DELAWARE COUNTY 11 SCHOOL BOARDS LEGISLATIVE COUNCIL
12 ROBERTA MARCUS, PARKLAND SCHOOL DISTRICT, 76 AND PSBA 13 JOHN MCKELLIGOTT, WILLIAM PENN SCHOOL 81 14 DISTRICT
15 TIM ALLWEIN, PSBA, ASSIST. EXEC. DIR. 86
16 JAMES ESTEP, SUPERINTENDENT, PARSS 89
17 MICHAEL OGNOSKY, SUPERINTENDENT, PARSS 94
18 JOHN FREUND, SOLICITOR 99
19 SHARON WILLIAMS, CHIEF ACADEMIC OFFICER 128
20 SOPHIA LEWIS 138
21 JOSE PARRILLA, CHIEF FINANCIAL OFFICER 146
22 JON MARSH, CEO, 21ST CYBER CHARTER SCHOOL 156
23 DENNIS TULLI, CEO, COMMONWEALTH 164 CONNECTIONS ACADEMY 24 SANDRA FOUCH, PA CYBER CHARTER SCHOOL 181 25
4
1 (CONT'D):
2 INDEX
3 NAME PAGE
4 ANDREW OBERG, PA CYBER CHARTER SCHOOL 187
5 NATHAN BENEFIELD, COMMONWEALTH FOUNDATION 191
6 DR. BOB MARANTO, COMMONWEALTH FOUNDATION 196
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
5
1 P R O C E E D I N G S
2
3 CHAIRMAN ROEBUCK: I'd like to call
4 this meeting to order. Good afternoon. I'd
5 like to call the meeting to order. This is
6 the meeting of the House Education Committee
7 focusing upon legislation on cyber charter
8 schools. I certainly am very pleased to see
9 that we have a large audience, and I'd like to
10 begin by asking that the members of the
11 committee and other reps who are with us will
12 introduce themselves.
13 I'm Jim Roebuck. I'm the chairman of
14 the committee from Philadelphia.
15 REPRESENTATIVE ROHRER: I'm State
16 Representative Sam Rohrer from Berks County.
17 REPRESENTATIVE MCILVAINE SMITH: I'm
18 State Representative Barbara McIlvaine Smith
19 from Chester County.
20 REPRESENTATIVE BEYER: I'm
21 Representative Karen Beyer from Lehigh and
22 Northampton County.
23 REPRESENTATIVE O'NEILL:
24 Representative Bernie O'Neill from Bucks
25 County.
6
1 REPRESENTATIVE FLECK: Representative
2 Mike Fleck serving portions of Blair,
3 Huntingdon, and Mifflin Counties.
4 REPRESENTATIVE VITALI: Greg Vitali
5 from Delaware County.
6 REPRESENTATIVE CLYMER: I'm
7 Representative Paul Clymer from Bucks County.
8 CHAIRMAN ROEBUCK: Thank you. We
9 have a long agenda and we want to make sure
10 that we give the opportunity to everyone who
11 wants to testify to testify. We do have a
12 time limit, and there is a clock, and we will
13 enforce that limit.
14 We want to also indicate that the
15 rule applies as well to the committee members
16 on the questions and the answers.
17 But it is our endeavor, our hope that
18 we will be able to move the hearing forward
19 and so everyone who wants to testify will
20 testify.
21 I want to emphasize that this is a
22 legislative hearing and although the subject
23 might be controversial and it might engender
24 some degree of emotion, it is my hope that we
25 will respect each other and listen to all the
7
1 testimony that is given and it is not a pep
2 rally. It is a legislative hearing.
3 Having said that, I want to offer the
4 opportunity for Representative Vitali to make
5 brief introductory remarks in reference to his
6 legislation and then we will go into the
7 committee testimony.
8 REPRESENTATIVE VITALI: Thank you,
9 Chairman Roebuck, for extending to me, a
10 non-member, the opportunity to explain my
11 bill, House Bill 1655.
12 House Bill 1655 is a very simple
13 two-page bill which does essentially two
14 things. One, it clarifies the right of a
15 school district to set up its own cyber
16 charter school and, two, makes it clear that
17 if a school district avails itself of that
18 option then it would be relieved from the
19 obligation and the Commonwealth would also be
20 relieved of the obligation to pay money for a
21 student in that school district who chooses to
22 go to another cyber charter school.
23 This idea -- this idea was from an
24 official in my school district, the Haverford
25 Township School District, who explained to me
8
1 the cost issue with regard to cyber charters
2 and the money that was leaving the school
3 district because of that and thought it might
4 be a good idea to do this in-house in a more
5 efficient way.
6 A couple of points. This is all
7 about doing what's best for children, all
8 children in Pennsylvania, given the fact that
9 we have a fixed amount of money to be spent on
10 education.
11 The second point I want to make is
12 that I'm fully supportive of the concept of
13 cyber charter schools. I think they have
14 their place in the educational toolbox that
15 schools use to educate kids.
16 I don't claim that this is the only
17 answer or perhaps even the best answer. I do
18 feel it has merit and it is an idea that I
19 want to throw out there so the experts of this
20 committee and others can sort of scrutinize
21 it, adjust it, and perhaps it will fail or
22 pass in the marketplace of ideas.
23 Other members have come forward to me
24 with regard to possible amendments. One,
25 making it clear that grouping of school
9
1 districts could do this.
2 Another idea is perhaps exempting
3 special ed kids from this. I think there
4 are -- I just want to throw this idea out
5 there because I think that the key thing is we
6 spend our educational dollars in the most
7 efficient way possible and I think this is a
8 potential goal for it.
9 So with that I will close and thank
10 you again for the opportunity to testify.
11 CHAIRMAN ROEBUCK: Thank you. We've
12 been joined by additional committee members.
13 I would ask the members to introduce
14 themselves.
15 REPRESENTATIVE CURRY: Lawrence
16 Curry, 154th Legislative District, Montgomery
17 and Philadelphia Counties.
18 THE AUDIENCE: Louder. Louder,
19 please.
20 REPRESENTATIVE MILNE: Duane Milne,
21 167th District, Chester County.
22 REPRESENTATIVE GRUCELA: I'm
23 Representative Rich Grucela from Northampton
24 County.
25 REPRESENTATIVE O'NEILL: You don't
10
1 need the mike.
2 THE AUDIENCE: You we can hear. The
3 other guy we can't.
4 REPRESENTATIVE HANNA: I'll follow
5 his lead. Representative Mike Hanna, 76th
6 District, all of Clinton County and part of
7 Centre County.
8 CHAIRMAN ROEBUCK: Thank you. We'll
9 call then up our first group of testifiers,
10 Thomas Gluck, the Executive Deputy Secretary
11 of the Pennsylvania Department of Education;
12 Dr. Ronald McCahan, Superintendent, Tussey
13 Mountain School District; Dr. Joseph Lewis,
14 Superintendent, Bethlehem Area School
15 District.
16 EXEC. DEPUTY SECRETARY GLUCK:
17 Mr. Chairman, thank you. I think we're going
18 to try to work -- speaking of technology --
19 work your technology here the best we can.
20 Good afternoon, Chairman Roebuck,
21 members of the committee, friends, guests.
22 Quite a crowd this morning.
23 My name is Tom Gluck. I am the
24 Executive Deputy Secretary for the Department
25 of Education. On behalf of Governor Rendell,
11
1 Secretary Zahorchak, and the entire
2 department, thank you for the offer to appear
3 today and discuss this important issue with
4 you.
5 I will, Mr. Chairman, do the best I
6 can to set a good model. You do have a long
7 agenda and I'll attempt to summarize, as will
8 my colleagues here this morning.
9 I do have two superintendents who
10 have joined me this morning, Dr. Ron McCahan,
11 who is from the Tussey Mountain School
12 District and Dr. Joseph Lewis from the
13 Bethlehem Area School District, who will talk
14 a little bit about the department's proposal
15 on this and what it might mean for -- for
16 their school districts in particular.
17 You'll recall that in July Secretary
18 Zahorchak did testify before your committee
19 and introduced to you the department and the
20 administration's proposal for cyber charter
21 school funding. I believe that proposal is
22 attached to my testimony that you -- that you
23 have this morning.
24 Simply, it establishes a single
25 statewide cyber charter tuition rate based
12
1 upon the most efficient and effective
2 expenditures by cyber charter schools.
3 With that proposal we believe
4 taxpayers would save millions of dollars -- in
5 fact, had it been in place in the '06/'07
6 school year $25 million -- without impacting
7 the quality of education delivered by
8 Pennsylvania cyber charter schools.
9 I believe it establishes
10 accountability for spending and also addresses
11 the issue that I know you've heard a lot
12 about, about the undesignated, unreserved fund
13 balances and does set a limit on those fund
14 balances as a way to ensure that these
15 revenues are expended in the ways I think we
16 all agree they should be, which is on students
17 and their learning.
18 In that single tuition rate -- just
19 to walk through that proposal quickly -- we
20 propose setting the tuition rate to reflect
21 the actual expenditures of cyber charters --
22 of a cyber charter school that is well
23 performing, in this case having met the AYP
24 targets, adequate yearly progress targets,
25 and are spending their revenues most
13
1 efficiently.
2 Additionally, we do propose to cap
3 the unreserved, undesignated fund balance in
4 the same way that the school code currently
5 caps fund balances for school districts.
6 That legislation suggests, provides
7 for a two-year period of those for cyber
8 charter schools that are over that fund
9 balance limit to, if you will, spend down to
10 the limit either by certain expenditures that
11 are for student achievement and student
12 learning or to refund back to the sending
13 districts for their tuition.
14 Going forward to the extent to which
15 that single tuition rate would generate more
16 revenue than the cyber charter needs and place
17 them above that unreserved fund balance limit,
18 the legislation provides, again, for a
19 prorated rebate, if you will, back to the
20 sending school districts on their tuition
21 rate.
22 Since we're first up, let me just, if
23 I can, provide some of the basics for you,
24 once again, about chart schools and cyber
25 charter schools in Pennsylvania. Certainly a
14
1 public school option for students and their
2 families in Pennsylvania.
3 Charter schools overall serve
4 approximately 60,000 in 117 schools or about
5 three percent of public school children in
6 Pennsylvania.
7 In the '06/'07 school year there were
8 106 brick and mortar charter schools serving
9 approximately 44,000 students. The 11 cyber
10 charter schools, therefore, serving the other
11 16,000.
12 497 school districts have students
13 attending cyber charter schools, though the
14 majority of students in cyber charter schools
15 come from just about 20 percent of the
16 Commonwealth's school districts.
17 At the core of this all is certainly
18 the fact that cyber charter schools have
19 significantly different cost structures than
20 brick and mortar charter schools or brick and
21 mortar school districts, but our payment
22 approach in the school code is that school
23 district -- the school district of residence
24 of a cyber charter school student is required
25 to pay the cyber charter a per student rate
15
1 based on the school district of residence's
2 expenditures.
3 Obviously that leads then to quite a
4 variation in the amount of money going to a
5 charter school. So, for example, a student
6 from the Reading School District attending a
7 cyber charter school Reading would send $5200
8 to that cyber charter school. A student from
9 the New Hope Solebury School District sending
10 a student to that same cyber charter would pay
11 $13,000.
12 And it's also important to note that
13 the school district of residence paid that
14 tuition rate for a cyber charter student
15 whether that student was previously enrolled
16 in the school district or not or, say,
17 previously enrolled in a private school or
18 parochial school.
19 Based on the '05/'06 annual financial
20 reports, the AFR's, if you will, you'll hear
21 that term a lot this morning. They're the
22 most recent ones we have. Pennsylvania cyber
23 charter schools spent $106 million but
24 collected $117 million. That's a difference
25 of more than $800 per cyber charter student.
16
1 At the end of that '05/'06 year cyber
2 charter schools had a cumulative unreserved
3 fund balance of $128 million, or 26 percent of
4 their annual expenditures.
5 Just for perspective, the school code
6 sets the limits for school districts'
7 unreserved fund balance, the maximum
8 percentage for any school district is 12
9 percent.
10 Simply put, it's the administration's
11 view, the department's view, that cyber
12 charter schools should be investing their
13 reserves in students and not building up
14 massive fund balances.
15 That's why we brought this proposal
16 forward, both to tie that tuition rate to
17 actual expenditures so that cyber charter
18 schools can remain fiscally viable based on
19 their expenditure experience and we know in
20 this kind of limited resource we're mindful of
21 the resources and needs of our 501 school
22 districts.
23 So, again, those -- that's our basics
24 on both our proposal and some background on
25 cyber charter schools.
17
1 Thank you, again, for providing the
2 opportunity. I'm looking forward to the
3 discussion. I'd like to take a minute then
4 and let these couple superintendents talk a
5 little bit about the reality of their
6 situations with cyber charter schools.
7 Why don't I start with Dr. Lewis from
8 Bethlehem School District?
9 DR. LEWIS: Thank you, Tom. Chairman
10 Roebuck, Representative Beyer and Grucela from
11 my neck of the woods and others members of the
12 House Education Committee, I thank you for
13 this opportunity.
14 My comments center around equity and
15 fairness in both the areas of funding and
16 accountability.
17 I want to make it very clear that I
18 do not oppose cyber charter schools. I think
19 they're a viable way to educate certain
20 individuals with circumstances that may
21 warrant the use of those institutions.
22 Oftentimes I've been equated with
23 being opposed to them. What I do oppose
24 though is the current funding mechanism which
25 has created a travesty ripe for abuse of
18
1 public monies.
2 And I know that you're looking at
3 that. Representative Beyer contacted me about
4 a year and a half ago to discuss this very
5 issue; and her original bill, 2616, was a
6 valiant attempt to address this.
7 As you heard from Mr. Gluck, millions
8 of dollars in unreserved fund balances exist
9 in the Commonwealth cyber charter schools.
10 And I provided a chart, I'm not going
11 to read that to you, of what those fund
12 balances look like in the majority of cyber
13 schools that exist in Pennsylvania currently.
14 As he noted $28 million resides there.
15 This sum of money represents a very
16 elastic funding design that in 2006/07 saw one
17 district pay under that 5900, I believe, 5200
18 of what was quoted, and a district pays as
19 high as 13,000 for the same service. That to
20 me is just simply illogical.
21 Bethlehem Area School District alone
22 has seen our payment for cyber charters grow
23 from 151,000 in the first year of their
24 existence to just about a half a million, or a
25 growth of 320 percent.
19
1 Now, what's interesting to note is
2 that while we have 70, 75 students opting for
3 this at various times, there's no direct
4 correlation in savings for the sending
5 district. We don't get to shut down a
6 classroom. These youngsters are spread over
7 15,000 students in 25 schools at various grade
8 levels in various classes.
9 So to remove that number of students
10 does not automatically permit us to shut down
11 a room, to save on resources, to reduce a
12 teacher. We do not realize anywhere near that
13 half million dollars that is expended.
14 So that adjustment now has impacted
15 us geometrically over the years.
16 The Pennsylvania Cyber School,
17 formerly the Western Pennsylvania Cyber
18 School, operated by Dr. Trombetta, who is here
19 today, has become so profitable that I believe
20 he's retired as superintendent to run that
21 full time.
22 And in looking at that example of a
23 $39 million operating budget and a $15 million
24 fund balance I think most glaringly
25 illustrates the inequity.
20
1 If he were to play by the rules that
2 public school systems play by, his fund
3 balance would be around $4 million. Certainly
4 respectable and certainly a nice savings
5 account to deal with the issues that he finds
6 in running his school.
7 That's why it's imperative that we
8 standardize the dollar amount or use a
9 percentage amount of instructional costs that
10 cyber schools are actually spending to
11 establish perhaps a fixed payment.
12 In my August 22nd testimony before
13 this same group in Allentown, I gave a very
14 simplistic view of how a cyber school could
15 operate for about two to four thousand a
16 student.
17 Now, I know that was simplistic and
18 was based on a model, but essentially it far
19 falls below the 10 and 12 and 11 and $13,000
20 that some school districts are paying for that
21 education.
22 I've also included in my testimony a
23 basic chart of our payments, number of
24 students, and that shows that geometric
25 progression of impact.
21
1 I would like to conclude my remarks
2 by saying simply that any legislation, any of
3 these bills that have been introduced, must
4 protect public school districts from abuse and
5 must hold cyber charter schools to the same
6 standards that the Commonwealth expects from
7 public schools.
8 Those include standards of
9 accountability, financial auditing, highly
10 qualified teacher maintenance, as well as the
11 laws and regulations pertaining to special
12 education and ESL students. That would be a
13 level playing field and that's what we're
14 asking.
15 I repeat, I do not oppose cyber
16 charter schools. Nor do I oppose the brick
17 and mortar charter schools. I believe that
18 choice is an option. It's a real option and
19 it's out there.
20 My own parents enrolled me in a -- in
21 private schools and public schools throughout
22 my experience. The difference, though, is
23 that in the '60s my parents paid for my
24 private schooling when I was in that
25 placement.
22
1 Public schools have paid a price for
2 the current system and you have an opportunity
3 to correct that inequity now.
4 I thank you for the opportunity to
5 speak with you today.
6 DR. MCCAHAN: Chairman Roebuck and
7 Education Committee members, it is a pleasure
8 that I've been invited to speak as a member of
9 the Pennsylvania Department of Education's
10 panel relevant to today's hearing on cyber
11 charter funding.
12 Specifically, I represent a very
13 small and rural district. Forty percent of
14 our students are located in southwestern
15 Huntingdon County and 60 percent of our
16 students are located in northeastern Bedford
17 County.
18 I represent a district of 1180
19 students in grades K through 12, and we are
20 154 districts that have reported an enrollment
21 of 11 -- 11 to 25 cyber charter students in
22 '06/'07.
23 It is important to note that since
24 the 2003/2004 school year the Tussey Mountain
25 School District's cyber charter school costs
23
1 have risen 185 percent.
2 Please understand -- and I reiterate
3 what has already been said. I'm not opposed
4 to cyber charter schools. In fact, I'm
5 certain those cyber charter schools in the
6 Commonwealth that continue to meet AYP provide
7 an excellent and important educational option
8 for the students and parents they serve.
9 However, recently I have observed
10 certain situations that I believe are
11 inequitable and do not place cyber charter
12 schools and public schools on the same playing
13 field.
14 Furthermore, it is my professional
15 opinion that cyber charter schools and public
16 schools are not held to the same
17 accountability measures.
18 For example, public school districts
19 are limited to setting aside a general fund
20 balance of approximately ten-and-a-half
21 percent of its total budget expenditures.
22 Cyber charter schools, on the other
23 hand, are not held to any particular cap and
24 can set aside unlimited -- unlimited fund
25 balances.
24
1 I recall reading that in 2005 and
2 2006 Pennsylvania's 12 cyber charter schools
3 had a cumulative unreserved fund balance of 28
4 million, or 26 percent of their annual
5 expenditures. I would question where
6 Pennsylvania tax dollars are going as it
7 appears that some cyber charter schools are
8 not investing in students but building up
9 unlimited fund balances.
10 Secondly, there is an incredible
11 variation in school district tuition rates.
12 Hence, the wide variance in tuition rates
13 obviously means that there is a great variance
14 in the tuition paid to a cyber charter school,
15 and that has been articulately said earlier.
16 That is, the same cyber charter
17 school may attract students who bring with
18 them very, very different funding sources.
19 At an informational meeting with the
20 House Education Committee on cyber charter
21 school funding held on July 31st, 2007,
22 Dr. Gerald Zahorchak, Deputy Secretary, Office
23 of Elementary and Secondary Education,
24 proposed establishing a single statewide cyber
25 charter tuition rate.
25
1 After reading Dr. Zahorchak's
2 testimony of July 31st, 2007, I am here to
3 support those recommendations. Specifically,
4 the establishment of a single tuition rate for
5 cyber charter schools would create a fair and
6 equitable tuition system that would ensure
7 that taxpayer dollars are used more
8 responsibly and equitably.
9 Furthermore, the single rate would
10 lessen the likelihood that cyber charter
11 schools would build up excessive fund balances
12 and in cases where the limit might be exceeded
13 the excesses could be returned to individual
14 school districts paying tuition to that
15 particular cyber charter school.
16 In conclusion, capping a cyber
17 charter school's unreserved fund balance and
18 establishing a single tuition rate for cyber
19 charter schools allocates public resources
20 more efficiently and provides a more fair and
21 equitable system for public and cyber charter
22 schools.
23 Thank you for the opportunity to
24 present.
25 CHAIRMAN ROEBUCK: Thank you. We're
26
1 going to bring up the next speaker, and then
2 we will -- when we're finished with our first
3 group, we'll have questions and answers.
4 I'd like to then call James
5 Testerman, president of the Penn
6 State Education -- of the Pennsylvania State
7 Education Association.
8 MR. TESTERMAN: Good afternoon,
9 Chairman Roebuck -- excuse me -- Chairman
10 Stairs and members of the House Education
11 Committee.
12 My name is Jim Testerman, as you just
13 mentioned. I'm a life science teacher
14 currently on leave from the Central York
15 School District to fill my elected term as the
16 president of the Pennsylvania State Education
17 Association.
18 My prepared testimony that you have
19 is a little bit more detailed. To try and
20 expedite the time here for you today, I've
21 prepared some more focused remarks for you.
22 I'll be happy to take questions on the more
23 detailed testimony as well.
24 I'd like to thank you for inviting a
25 representative of public education
27
1 employees to testify before you here today.
2 Cyber charter schools have grown in
3 number and size in a relatively short time as
4 part of the Commonwealth's educational
5 landscape.
6 Currently there are 11 cyber charter
7 schools providing instruction to roughly
8 17,000 at a cost of more than $117 million to
9 the Commonwealth and its school districts.
10 This is significant and the public
11 funding in a recent Auditor General's report
12 concerning charter school financing strongly
13 suggests that charter schools may, in fact, be
14 receiving state and local funds in excess of
15 their actual costs for educating students.
16 Now, PSEA recognizes the contribution
17 that diverse learning opportunities can make
18 to students and their families within the
19 public system of education. And we think
20 that's a good idea.
21 Yet the current system of cyber
22 charter school accountability and funding is
23 flawed and needs commonsense changes that are
24 contained in many of the legislative proposals
25 before this committee.
28
1 Act 88 of 2002 provided an important
2 first step in creating a more viable
3 regulatory structure for cyber schooling and
4 recognizes that the Pennsylvania Department of
5 Education was better suited to provide the
6 needed accountability for cyber schools.
7 Yet there is a need to continue
8 forward to build a public policy structure
9 that balances the ability to innovate
10 appropriate accountability and prudent
11 management of public funds.
12 Moving forward, PSEA applauds the
13 efforts of Representative Beyer and others to
14 remove the responsibility of cyber school
15 funding from school boards and place it with
16 the state.
17 The General Assembly must also
18 determine what is an appropriate funding level
19 of cyber education on a per student basis.
20 Now, there are various ways to alter
21 the funding formulas that you've seen in some
22 of the legislation before you. These include
23 per student funding levels based on a sliding
24 scale of a total student enrollment or funding
25 level calibrated against an average per
29
1 student expense level across all cyber
2 schools.
3 Each of these proposals has merit.
4 Ultimately we encourage PDE to scrutinize
5 charter school spending and determine the
6 actual cost of educating cyber school
7 students.
8 PSEA believes cyber schools may be
9 adequately able to serve a segment of our
10 student population. However, beyond the
11 financial consequences, PSEA calls for a study
12 of the impacts of cyber education.
13 At a minimum, any study should
14 include the following:
15 First, examine the quality and
16 appropriateness of cyber school curricula,
17 including, but not limited to, their alignment
18 to state standards and appropriateness of
19 cyber education for students with specific
20 disabilities or other learning needs.
21 Two, include an assessment of the
22 academic quality of education by Pennsylvania
23 cyber schools.
24 And, three, include a detailed
25 evaluation of the developmental effectiveness
30
1 of their programs for young learners. This is
2 a particular concern for us.
3 Finally, PSEA believes that in the
4 current accountability environment it is
5 imperative for all public schools to ensure
6 that all students are taught by certified
7 teachers. Cyber schools are still permitted
8 to allow up to 25 percent of teachers who are
9 neither certified nor highly qualified in the
10 content in which they teach. We ask you to
11 equitably apply teacher certification and
12 other professional development requirements
13 across the public school system.
14 I thank you for your time and I look
15 forward to answering any questions that you
16 might have.
17 CHAIRMAN ROEBUCK: Thank you very
18 much. We do then have two additional speakers
19 before we get to questions from the
20 committee. Jay Himes, Pennsylvania
21 Association of School Business Officials, and
22 Donna Les, Business Manager, Pleasant Valley
23 School District.
24 MR. HIMES: Good afternoon, Chairman
25 Roebuck. I'm Jay Himes, Executive Director of
31
1 the Pennsylvania Association of School
2 Business Officials. Thank you and the members
3 of the committee for the opportunity to
4 present our views.
5 Our association is a statewide
6 organization of non-instructional
7 administrators below the rank of
8 superintendent. We do a lot of things to
9 support classroom learning. The biggest
10 segment of our membership is indeed the chief
11 financial officer.
12 With me today is Donna Les. She's
13 the business manager and board secretary of
14 Pleasant Valley School District in Monroe
15 County, a former member of our board, and a
16 current member of our legislative committee.
17 In keeping with the time frames, I'm
18 going to summarize my written testimony and
19 say just a few things that perhaps we would
20 add from a school finance perspective.
21 We believe this is a significant
22 school finance issue. The bottom line is the
23 bottom line with regard to this particular
24 issue.
25 By our calculations, about $500
32
1 million goes from public schools to cyber and
2 brick and mortar charter schools.
3 The testimony that I gave to you does
4 show the chart that was alluded to previously
5 in terms of the wide disparity of tuition
6 payments to charters ranging from about $6,000
7 up -- all the way up to $13,000.
8 We don't think it makes sense that
9 when the cost of utilities to a public school
10 goes up that their charter school
11 reimbursement goes up.
12 When the cost for vocational
13 technical programs that a district may be
14 paying to the career and technology center
15 goes up, their charter school payments go up.
16 Whether it be new textbooks or any of the
17 other myriad of expenses. That's the way the
18 system and the formula in the charter school
19 laws provide it. We think the charter school
20 law envisioned cyber payments, for example,
21 and that really was a brick and mortar
22 framework.
23 Just to cite a few statistics. About
24 85-five percent of school districts in the
25 state get less than $5,000 per student from
33
1 their basic education subsidy.
2 So if we took a local district like
3 Derry Township, a fairly affluent district,
4 they get $515 per ADM. This is '06/'07 data.
5 But their -- their charter school payment is
6 $8,500. For a special education student it
7 would be $16,000.
8 A much smaller, rural school,
9 Bermudian Springs, Adam County, they get about
10 $2200. Their charter school payments, 6400.
11 Their special education charter payments
12 10,000.
13 And even when factoring in a 30
14 percent state reimbursement, which we are
15 thankful the legislature did enact, there's
16 still a wide disparity.
17 And we believe no matter how you
18 address that, how you spin it, local taxpayers
19 are subsidizing the difference between state
20 reimbursements and charter school payments.
21 We applaud the committee for
22 listening to school districts across the
23 state. This is not a small school issue/big
24 school issue. It's not a regional issue.
25 It's consistent and statewide. It's a problem
34
1 in every school district in every part of the
2 Commonwealth.
3 I think many have already recognized
4 the flaws in the law. Representative Beyer's
5 bill calls for that single uniform tuition
6 rate. It is a high priority of ours, adopted
7 at our annual conference last March.
8 Secretary Zahorchak as well has
9 called for the single uniform tuition rate.
10 The Auditor General has said this summer that
11 we need to fix the charter school law
12 immediately.
13 The Act 1 Task Force on school cost
14 reduction has said we need the uniform single
15 tuition rate.
16 So we think the issue is long overdue
17 in terms of solution. We urge action. We do
18 support a single tuition rate for cyber
19 charters based on the actual cost and not on
20 unrelated expenditures to school districts.
21 Thank you.
22 MS. LES: Good afternoon and thank
23 you for the opportunity to be here. I'd like
24 to present to you some information concerning
25 the impact of charter and cyber chartered
35
1 education to my school district, which is
2 Pleasant Valley in Monroe County.
3 The enrollment of students in these
4 non-traditional school settings has
5 dramatically increased since their inception.
6 In the chart on Page 1 of my full
7 testimony there's a listing of the impact of
8 these schools to Pleasant Valley School
9 District.
10 Since 2002/2003 our expenditures have
11 grown from $118,000 to an estimated cost for
12 2007/08 of $1.74 million. Student enrollment
13 increased from 32 students to an August 13th
14 enrollment count of 191 students.
15 40 percent of those students have
16 come to the cyber education field from either
17 nonpublic schools or from home schooling
18 programs, programs for which our school
19 district had no financial responsibility in
20 the past.
21 In accordance with the charter school
22 law Pleasant Valley received notification on
23 July 24th of this year of an increase in
24 enrollment in one particular cyber charter
25 school of between 20 to 25 percent.
36
1 This was to assist us in budgetary
2 planning. However, our budget was approved
3 several weeks prior to receiving the
4 notification, thereby almost guaranteeing that
5 we did not increase our line item expenditure
6 sufficiently.
7 As of September 13th the enrollment
8 in this particular cyber charter has increased
9 by 45.6 percent.
10 As you can see in the chart, as
11 I mentioned, our budgetary increase is not
12 sufficient to cover the cost of those enrolled
13 students.
14 Current charter and cyber charter
15 funding statutes cause each school district to
16 expend a different amount for the same number
17 of students in a particular charter school
18 because the per pupil expenditures of school
19 districts vary.
20 In the chart on Page 2 I provided to
21 you the varying rates for the schools in
22 Monroe County.
23 When these varied rates are higher
24 than the per student actual instructional
25 expense of the charter school, it results in a
37
1 net profit for those schools.
2 The state should recognize that cyber
3 charter school costs are not a function of
4 public school costs and because they're so
5 different from brick and mortar schools the
6 same funding principles do not apply.
7 Funding mechanism in both House Bill
8 446 and 738 would appear to be a suitable
9 means to fund cyber charter schools.
10 With the Department of Education
11 taking the responsibility to approve cyber
12 school charters, it would be appropriate that
13 they also become the channel for funding.
14 Establishing levels of funding based
15 upon charter school size mitigate the myriad
16 of funding levels that currently exist. These
17 funding levels would take into account
18 economies of scale or the size of their
19 student population as well as their statutory
20 freedom from many school code requirements.
21 It should also reflect and provide
22 for those cyber charter schools that develop
23 their own curriculum that is tailored to
24 Pennsylvania's academic standards rather than
25 a nationally developed prepackaged program
38
1 that is purchased by the cyber charter
2 school.
3 Another issue of concern that has
4 been previously mentioned is that of fund
5 balance. If traditional public schools are
6 limited in fund balance, why is it that cyber
7 charter schools have unlimited ability to hold
8 local tax dollars?
9 Traditional public schools are
10 limited to between a 8 and 12 percent cap per
11 Section 688 of the school code.
12 Based upon 2005/2006 AFR data, the
13 chart that I have on Page 3 of my full
14 testimony shows that the cyber charter schools
15 have fund balances ranging from three percent
16 to 49 percent of total expenditures.
17 Eight out of twelve cyber schools
18 have fund balances higher than traditional
19 school districts and five of those have fund
20 balances over 30 percent.
21 Additionally, although charter
22 schools are designed to be self-managed public
23 schools, certain aspects of their operation
24 fall back to the resident school district.
25 In particular, is the issue of
39
1 dealing with truancy. While all schools issue
2 attendance letters, pursuit of remedies is
3 handled differently. Brick and mortar schools
4 file truancy documents with the district
5 magistrate in whose jurisdiction the school is
6 located. For cyber charter schools, the
7 resident district is required to handle the
8 filing and to attend scheduled hearings.
9 The cyber charter has no obligation
10 to attend or testify concerning filed truancy
11 and it should be the cyber charter's
12 responsibility to handle all situations
13 concerning their enrolled students.
14 It's very important for everyone to
15 understand that the concept of student
16 education via an online process is a viable
17 form of education. We're not remotely
18 suggesting that it be eliminated.
19 However, it is time that cyber
20 charter school funding be seriously modified
21 to provide dollars in a fiscally prudent
22 manner.
23 The funding stream for these
24 alternative programs continues to increase
25 annually with little or no oversight to
40
1 support the need for the increases.
2 House Bill 446, 738, 1407, and 1655
3 appear to be designed to enhance the integrity
4 of cyber charter schools by providing
5 flexibility, accountability, and guidance in
6 their operation.
7 It is time to answer the question of
8 how much does it cost to educate a cyber
9 charter school student and to afford the
10 Department of Education the opportunity to
11 provide cyber charter schools with the support
12 necessary to enhance the accountability in
13 fiscal responsibility.
14 I'd like to again thank you for the
15 opportunity to present this information and at
16 this point we'll be happy to answer any
17 questions you may have.
18 CHAIRMAN ROEBUCK: Thank you. I'd
19 like to ask that the members of the various
20 panels might come back so that we can ask
21 individual questions. Hopefully we can make
22 use of the mikes separately.
23 Thank you. I just wanted to ask one
24 additional question. I guess it might
25 properly go to Tom Gluck.
41
1 Is there such a thing as a census of
2 school children? One of the things I hear all
3 the time in particular in reference to this
4 issue is that children appear that school
5 districts didn't know existed for which now
6 they are responsible.
7 Is there a -- is there a census of
8 school children that you can access?
9 EXEC. DEPUTY SECRETARY GLUCK: Well,
10 as we mentioned earlier, students who were not
11 previously in public schools were in a private
12 school, parochial school, might have been home
13 schooled, who then enrolled in cyber charter
14 schools, those students may often come as a
15 surprise when a school district receives a
16 bill back from a cyber charter school.
17 So there is some reporting of
18 nonpublic schools back to public schools.
19 But, in general, the -- the names and the list
20 that the districts are going to be most
21 familiar with would be the students that were
22 currently enrolled in their district.
23 What I would say is that when those
24 surprises occur and they come back, a district
25 gets a bill, if you will, with a student's
42
1 name on it from a cyber charter school, there
2 is a process that ultimately the department
3 reconciles at the end of the year about --
4 over challenges for that student.
5 Are they really a resident of that
6 school district? Were they really enrolled?
7 That is a process we go through.
8 But there will be a degree of
9 unpredictability because of the nonpublic
10 school students that might choose to enroll in
11 a cyber and then become a responsibility for
12 payment.
13 DR. LEWIS: The short answer,
14 Chairman, is there is no census of record. So
15 it is possible for a student to exist in a
16 private school for X number of years and then
17 all of a sudden appear because the change is
18 made into a cyber charter school.
19 CHAIRMAN ROEBUCK: It's also then
20 possible for a child not even to be in school
21 and suddenly appear? Am I right?
22 DR. LEWIS: That's a possibility.
23 CHAIRMAN ROEBUCK: Okay. Thank you.
24 I want to then allow members of the
25 committee to ask questions. I'll begin now
43
1 with Representative Beyer.
2 REPRESENTATIVE BEYER: Thank you.
3 Thank you, Mr. Chairman. And since this is
4 our last hearing, if you'll all indulge me, I
5 just want to thank Chairman Roebuck.
6 Especially -- you've been incredibly
7 professional, Mr. Chairman.
8 THE AUDIENCE: We can't hear you.
9 REPRESENTATIVE BEYER: I'm deeply,
10 deeply grateful.
11 THE AUDIENCE: We can't hear you.
12 Speak up. Talk into the mike when you talk.
13 REPRESENTATIVE BEYER: There is
14 like a -- can you hear me now? Okay.
15 So I just publicly thanked Mr. --
16 Chairman Roebuck for his incredible
17 professionalism. I'm deeply grateful.
18 This is the last hearing on this
19 bill. It has been my desire all along with
20 the panel to get a well compromised, well
21 thought-out bill. I think we're really on the
22 verge of that.
23 Just very quickly, Jay and Donna. If
24 you don't mind, I'll just call you by your
25 first names. I liked what you said. So I
44
1 thought your testimony was really on point.
2 We need to, I think, add to this bill
3 budgeting so that -- so that the cyber charter
4 budgets and the school district budgets
5 coincide. Because I think that's
6 extraordinarily important.
7 Jay, Donna, do you have any comments
8 on that? So that after you prepare your
9 budget, after, after your preparation of your
10 budget, you're now not being asked for
11 additional monies.
12 MR. HIMES: Absolutely.
13 REPRESENTATIVE BEYER: Do you agree
14 with that?
15 MR. HIMES: Absolutely.
16 MS. LES: Yes.
17 REPRESENTATIVE BEYER: Could you help
18 me then prepare language that could
19 potentially amend this bill, that is House
20 Bill 446, with that information?
21 I think that would not only be
22 helpful to the public school district but also
23 help with the cyber charter budget as well.
24 MR. HIMES: Sure.
25 REPRESENTATIVE BEYER: And then on
45
1 the census issue, we would really hit a key
2 point here in terms of trying to account for
3 these children that have not been accounted
4 for before.
5 So maybe perhaps, Superintendent
6 Lewis, you could help me in the preparation
7 and, Secretary, if you could help me in the
8 preparation of some form of amendment?
9 And then just my final quick comment
10 to -- is it Gluck or Glick?
11 EXEC. DEPUTY SECRETARY GLUCK: It's
12 Gluck.
13 REPRESENTATIVE BEYER: Glick?
14 EXEC. DEPUTY SECRETARY GLUCK: No,
15 it's Gluck.
16 REPRESENTATIVE BEYER: Gluck. I want
17 you to know that I think the one thing that's
18 been inspiring, especially over the past six
19 months or so, is that this cyber charter bill
20 has gotten and the issue has gotten the
21 attention of the department.
22 I'm deeply grateful for the
23 department putting out what they believe would
24 be recommended legislative changes to improve
25 the system, and I'm really looking forward to
46
1 working with the department to try to get a
2 very well compromised bill out of this
3 committee.
4 We have a little bit of work cut out
5 for us. But I -- I wanted to just tell you
6 personally that I very much appreciate what
7 the department has been doing and what you
8 have put out, and I look forward to working
9 with you.
10 I -- I believe there are some things
11 about my bill additionally that the department
12 does want -- has taken an interest in and it
13 is not specifically addressed so far but wants
14 to. Is that right?
15 EXEC. DEPUTY SECRETARY GLUCK: It
16 is. Thank you for that and, again, thank you
17 back for your ongoing interest and
18 leadership.
19 I think there is a consensus and
20 agreement the time is right to address the
21 issue and thank you for that. We look forward
22 to continuing that work.
23 It's beyond the funding issue. Your
24 bill does address some other areas, and
25 particularly areas of accountability, issues
47
1 of conflict of interest in the government
2 structure are -- are critically important and
3 you raised good ideas and we look forward to
4 working with you and having those drafts
5 included in whatever moves from the committee.
6 REPRESENTATIVE BEYER: Well, thank
7 you. I look forward to working with you.
8 Mr. Chairman, that's all I have for
9 now.
10 CHAIRMAN ROEBUCK: Representative
11 O'Neill.
12 REPRESENTATIVE O'NEILL: Can you
13 hear?
14 THE AUDIENCE: No.
15 REPRESENTATIVE O'NEILL: Can we
16 unplug it?
17 Thank you. I just have, I guess, two
18 or -- two or three basic questions. And I
19 went into this and I promised --
20 THE AUDIENCE: We can't hear. We
21 cannot hear you.
22 REPRESENTATIVE O'NEILL: How many
23 legislators does it take? The answer is?
24 Thank you. Thank you.
25 I went into this with a very open
48
1 mind, which I had promised some parents, and
2 particularly one parent who visited me
3 concerning this legislation. And I've been
4 working through it.
5 First of all, I want to thank the one
6 cyber school who contacted me because I
7 committed to visiting them and they contacted
8 me right away in the Pittsburgh area. But
9 because of my schedule I wasn't able to do
10 that. I hope we'll be able to.
11 I do have some questions. Any one of
12 you can answer this question. Your budgets,
13 school budgets, do you have to submit them to
14 the Department of Education?
15 MS. LES: Yes.
16 REPRESENTATIVE O'NEILL: For the
17 cyber school it's the same?
18 MS. LES: Yes.
19 REPRESENTATIVE O'NEILL: And your
20 budget that you submit is an extremely
21 detailed, full budget, the same document that
22 is published publicly that you vote on it --
23 DR. MCCAHAN: It's the same document.
24 REPRESENTATIVE O'NEILL: -- at your
25 school board meetings?
49
1 DR. LEWIS: Yes. Everything.
2 DR. MCCAHAN: The same document.
3 REPRESENTATIVE O'NEILL: It's as
4 detailed, your superintendent's salary, your
5 teachers' salaries, what the contract is, and
6 that sort of thing?
7 MS. LES: No.
8 REPRESENTATIVE O'NEILL: You submit
9 that or you do that?
10 MS. LES: The budget that our school
11 district submits to the state is the PD 2028
12 form. We -- when we go for our budget
13 hearings in our district, we provide our --
14 our board as well as our public with a lot
15 more detail that get into salaries, benefit
16 costs, various instructional costs, those
17 types of things that are line item detail.
18 But, again, the state receives a 2028
19 form, which is what is required for us to
20 submit.
21 REPRESENTATIVE O'NEILL: It's not a
22 line item budget?
23 MS. LES: That's correct.
24 REPRESENTATIVE O'NEILL: The reason
25 why I ask that, is I'm trying to keep an open
50
1 mind for this whole process and -- thank you
2 -- one of the things is trying to get a full
3 complete budget from the cyber schools.
4 I know, for instance, Representative
5 Beyer has asked many times for it. I don't
6 know if she's received it. Representative
7 Fleck asked for the exact same thing at the
8 hearings in July in Pittsburgh and he got
9 nothing more than a five-page summary.
10 So if you could, since we can't get
11 it from the cyber schools, could you forward
12 it to me or Representative Beyer or
13 Representative Fleck a copy of the budgets
14 that you do receive from the cyber schools?
15 MS. LES: I am --
16 REPRESENTATIVE O'NEILL: That is
17 directed to the Department of Education.
18 MS. LES: I receive no budget.
19 EXEC. DEPUTY SECRETARY GLUCK: Yes.
20 REPRESENTATIVE O'NEILL: Department
21 of Education.
22 EXEC. DEPUTY SECRETARY GLUCK: Yeah.
23 We'd be happy to do that. Show you the form
24 in which we get it and the level of detail
25 that we have.
51
1 REPRESENTATIVE O'NEILL: Right. And
2 just one of the things that is coming down is
3 we're talking dollars and cents most of the
4 time and that's basically what this is about
5 and for some reason we're not getting that
6 information openly from the cyber schools.
7 EXEC. DEPUTY SECRETARY GLUCK: And,
8 of course, we get both their budgets, what
9 they anticipate spending and receiving and
10 then we get their final financial report which
11 is a -- at the end of the day more accurate
12 end product.
13 REPRESENTATIVE O'NEILL: And that
14 actually leads to another question. See, I'm
15 in the wrong seat.
16 To Donna, Donna Les. On one of the
17 charts you showed the actual budget of one of
18 the cyber schools, I guess this is for the
19 kids, your district, that attended --
20 MS. LES: Uh-huh.
21 REPRESENTATIVE O'NEILL: -- the cyber
22 schools. Like in 2005/2006 it's $440,000.
23 That's what was budgeted but actually spent
24 was 84 -- $840,000. That's a $400,000
25 difference.
52
1 Do you know what that money is made
2 up of?
3 MS. LES: Our -- our school budget is
4 set up with a budgetary reserve of $563,000 to
5 be utilized for whatever unexpected expenses
6 we run into, whether it be a very expensive
7 special education placement, additional
8 teaching hirings. In this case those dollars
9 have been channeled to this particular issue.
10 REPRESENTATIVE O'NEILL: So, in other
11 words, the cyber schools are telling you, we
12 budgeted -- tell me if I'm not reading this
13 properly -- we budgeted for $440,000 but you
14 have to send us 840,000. Is that what you're
15 telling us?
16 MS. LES: No.
17 REPRESENTATIVE O'NEILL: Thank you.
18 MS. LES: The Pleasant Valley budget
19 in 2005/'6, our -- we increased it from '04/'5
20 to 440,000.
21 At that time when we did our budget,
22 we had no idea what the enrollment was going
23 to be in any of the charter or cyber charter
24 schools. We had a guess.
25 REPRESENTATIVE O'NEILL: I see.
53
1 MS. LES: Our guess was way low.
2 REPRESENTATIVE O'NEILL: Okay. Thank
3 you.
4 Then, lastly, which I find
5 interesting, is that the one school district
6 that you were talking about in the Lehigh
7 Valley area, they receive $515 per student,
8 but you had to pay the cyber school $8,500 per
9 student. That $515 I know is your basic
10 funding.
11 MR. HIMES: That's Derry Township
12 School District, Dauphin County.
13 REPRESENTATIVE O'NEILL: Oh, Dauphin
14 County?
15 MR. HIMES: Dauphin County.
16 REPRESENTATIVE O'NEILL: Okay. Thank
17 you. So the approximately 80 -- $8,000 more
18 was sent to the cyber school than you're
19 actually getting from the state to educate
20 that student. Correct? So that money is
21 coming from the local taxpayer.
22 THE AUDIENCE: No. No. No. No.
23 No. Not in Derry Township.
24 DR. LEWIS: I think your premise is
25 correct. Okay. Not to that extent. In
54
1 essence, all school districts' subsidies,
2 whether they range from 20 to 50 percent of a
3 student instructional cost, okay, the
4 difference is our instructional, total
5 instructional cost of what is used to fund the
6 cyber charter.
7 So in our case, $7800 is our
8 instructional cost. Now, what do we get from
9 the state? We get about 23 percent. So to
10 use the example, that money has to come from
11 somewhere and generally it's local effort.
12 Now, there are other sources. But
13 the majority of those dollars come from local
14 effort.
15 EXEC. DEPUTY SECRETARY GLUCK: Yeah.
16 REPRESENTATIVE O'NEILL: All right.
17 Thank you.
18 EXEC. DEPUTY SECRETARY GLUCK: I
19 don't think we're in disagreement. In the
20 case of Derry Township, for their own
21 expenditures, they get $500 per student. They
22 have to use local tax dollars for the rest of
23 the expenditures for students attending Derry
24 Township schools.
25 So in general, we've all agreed, we
55
1 could change our mind, but up to now we've
2 agreed to shared responsibilities, state,
3 local to support the education of students.
4 We think that that --
5 REPRESENTATIVE O'NEILL: And that
6 was -- that was the point I was trying to
7 drive at.
8 EXEC. DEPUTY SECRETARY GLUCK: Okay.
9 REPRESENTATIVE O'NEILL: Thank you.
10 And I said this at the hearing in July and I
11 wanted to finish it. I guess one of the
12 disturbing factors to me in the cross sector
13 is I represent the Department of Education, as
14 you're saying, for the New Hope school, for
15 our school district -- which you're saying is
16 13,000, am I right?
17 And -- and I checked on you and you
18 are correct. And I -- and I -- I asked some
19 of the administrators at the cyber schools
20 that testified, if it's costing you 8500,
21 what's happening to that extra money? In your
22 case it would be close to $5,000, $4500. And
23 it's used to educate kids in the other part of
24 the state that are enrolled in their -- in
25 their system because they may be receiving
56
1 less than that $8500.
2 And I guess that's my most disturbing
3 fact, because I know my local taxpayer, if
4 they knew that they were using the money to
5 pay for kids in another school district -- and
6 I'm a huge supporter of education. I spent my
7 entire career, professional career in
8 education, and I don't believe it should be at
9 a local level. It should be on a state level
10 to pay for education more than on a local
11 level.
12 But to have my next-door neighbor,
13 you know, as a senior citizen -- and, believe
14 me, the majority of my citizenry are senior
15 citizens -- to pay for other students in other
16 districts in the state, I think that really
17 needs to be looked at.
18 But thank you very much.
19 CHAIRMAN ROEBUCK: Thank you. Before
20 I go to other reps that might have a question,
21 I want to -- we have been joined by two new
22 reps. I'd ask they'd introduce themselves.
23 REPRESENTATIVE LEACH: I don't know
24 if they can hear me. Representative Daylin
25 Leach, Montgomery County.
57
1 REPRESENTATIVE SONNEY:
2 Representative Curt Sonney, Erie County.
3 CHAIRMAN ROEBUCK: Thank you.
4 REPRESENTATIVE LONGIETTI:
5 Representative Mark Longietti from Mercer
6 County.
7 CHAIRMAN ROEBUCK: Thank you.
8 Representative McIlvaine Smith.
9 REPRESENTATIVE BEYER: You want this
10 one?
11 REPRESENTATIVE MCILVAINE SMITH: Can
12 you hear me? Thank you. Can you hear that?
13 THE AUDIENCE: Yes, now we can.
14 REPRESENTATIVE MCILVAINE SMITH:
15 Thank you. I'm going to take a different
16 tack, please, and I'm asking anyone who wants
17 to respond to this.
18 How do you respond to the allegation
19 that I've heard in Pittsburgh and I've also
20 heard again recently that some charter schools
21 are not being reimbursed in a timely manner or
22 at all for the students attending their
23 programs?
24 EXEC. DEPUTY SECRETARY GLUCK: I
25 think that's true to the extent that the
58
1 expectation is that charter schools bill the
2 resident district and oftentimes there's
3 either disputes or those resident districts
4 don't make payments.
5 When that happens, the charter
6 school, cyber or brick and mortar, notifies
7 the department and we will make that payment
8 on behalf of the district out of -- out of
9 their subsidy. At the end of the year that
10 then gets reconciled to the extent to which
11 either the charter or the school district has
12 concerns.
13 So it is an issue that we have
14 concern about. We end up sort of being, you
15 know, the cash flow manager, if you will, and
16 we've begun having conversations and continue
17 to have conversations with school districts
18 about that situation.
19 Where there's real dispute, we
20 understand. Where it's just out of routine,
21 certainly we have concern about it.
22 REPRESENTATIVE MCILVAINE SMITH:
23 Thank you. Is there anyone else who wants to
24 respond? Thank you.
25 CHAIRMAN ROEBUCK: Other questions?
59
1 Representative Rohrer.
2 REPRESENTATIVE ROHRER: All right.
3 Let's try this one here. Does this work
4 here?
5 THE AUDIENCE: No. No.
6 REPRESENTATIVE ROHRER: Does not work
7 here. All right. We'll try this.
8 This is on. This is on. Here we
9 go. When it's on, it's on. All right. We'll
10 try this. Alrighty.
11 I've been at, I think, all of these
12 hearings so far and I think the testimony that
13 we received from the whole spectrum has
14 consistently followed down pretty much the
15 same kinds of statements and the same pieces
16 of information to a large extent.
17 And if I were to take a look at what
18 we've heard again today, to me it stands out
19 that we ought to have the single tuition
20 rates, whether or not that's possible, whether
21 or not that's achievable.
22 I heard the playing-by-the-rules
23 assertion. That there's not a level playing
24 field when it comes to the public school
25 district as compared to cyber school district
60
1 and -- and the allegations relative to
2 improper or illegitimately high fund
3 balances. There are other things here, too,
4 but those stand out to me.
5 I think they've all been dealt with,
6 but I'd like just to clarify again once more
7 this -- this aspect. There has been
8 assertions made this morning that the -- that
9 the playing field is not level when it comes
10 to the host school district and the cyber
11 schools, and specifically mentioned by one of
12 you was ESL requirements, special ed
13 requirements and so forth, that they do not
14 apply.
15 Now, we've already asked that
16 question and I ask, Deputy Secretary Gluck,
17 would you clarify again for us, do the cyber
18 schools or do they not have the same
19 requirements relative to accepting students
20 who come complying with special ed regulations
21 and complying with ESL regulations?
22 EXEC. DEPUTY SECRETARY GLUCK: Yes.
23 In cyber charter, charter schools are
24 accountable for that --
25 REPRESENTATIVE ROHRER: Okay.
61
1 EXEC. DEPUTY SECRETARY GLUCK: -- in
2 the same way, whether it's under federal
3 special ed funding requirements or in our
4 determination of adequate yearly progress.
5 REPRESENTATIVE ROHRER: Okay. I
6 appreciate that. That's been testified before
7 and to the extent that we have to deal with
8 these issues as a committee, it -- to some
9 extent is -- how can I say it?
10 We shouldn't need to be going over
11 these same things over and over again. We
12 either -- these things are either in place or
13 they're not. So I don't want -- I just want
14 to clarify the assertion on that regard
15 because I thought we covered that once
16 before.
17 DR. LEWIS: Representative, I'm
18 sorry. Could I respond to that?
19 REPRESENTATIVE ROHRER: Yes, sir.
20 Sure. Sure.
21 DR. LEWIS: I want to make it clear
22 where applicable there's compliance. But, you
23 know, we deal with extraordinary disabilities
24 and, you know, I think my colleague to my
25 right called it steerage, which essentially is
62
1 that if I can't accommodate a child in a
2 private sector school, okay, the parent tends
3 not to make that placement.
4 There's no obligation, okay, for the
5 parent to pursue the requirements of an IEP on
6 the part of that school if indeed -- a cyber
7 school, for example, cannot deal with some of
8 the extreme special ed disabilities.
9 Now, ESL, I imagine that there's some
10 application of -- of Spanish that might apply
11 to a Latino youngster who is a beginner in ESL
12 status. I imagine you could -- you could
13 fashion that.
14 But I will tell you, you will find
15 very few using the cyber venue. Now, that
16 speaks to steerage. In other words, the
17 program doesn't -- doesn't deal with it, and I
18 think that's part of the funding issue as
19 well.
20 If you do take a special education
21 child, you can get as high as $16,000 in
22 subsidy. However, the application of those
23 accommodations through an online system pale
24 in comparison to what that actual expenditure
25 provides in the sending school where it may be
63
1 a $65,000 piece of equipment or it may be
2 wheelchair accessibility or it may be other
3 applications, whether that be a 504 child or
4 what-have-you.
5 My point is simply the cyber school
6 doesn't get these youngsters as a rule.
7 Okay? And that's what we're arguing. That
8 the funding piece, however, is calculated on
9 that.
10 I hope that helps.
11 REPRESENTATIVE ROHRER: I think it
12 does. But I'm just coming at it from the
13 standpoint of what the law requires. That's
14 why I asked the Deputy Secretary. The law
15 says that.
16 And what we had in testimony before
17 was that -- was that students who come must be
18 accepted. And if they come and they -- and
19 they require IEP, it has to be administered
20 and followed. So to that extent I don't see a
21 difference. But I just wanted to make that
22 one point.
23 The other thing is fund balance. I'd
24 like a clarification on that. It had been
25 previously testified in one of the previous
64
1 hearings that the -- that the fund balances
2 that are being maintained -- because in the
3 western part of the state this was covered
4 fairly significantly -- that the fund balances
5 are primarily -- I don't have the
6 percentage -- but primarily the result of --
7 of uncollected reimbursements.
8 Now, if -- if -- if that is the case,
9 then -- as was testified, I don't have those
10 numbers in front of me -- then somewhere in
11 that regard that has to be taken into account
12 when determining what is a legitimate balance
13 or what's an illegitimate balance.
14 Because I think the assertion of
15 illegitimate balances gives entirely the
16 concept that there's some kind of subsidy or
17 wrongdoing.
18 But if it -- if it is as we have
19 received testimony, then it's a matter of
20 process that needs to be fixed rather than an
21 allegation that there's some kind of
22 wrongdoing.
23 EXEC. DEPUTY SECRETARY Gluck: But I
24 think we can parse that out a little for you
25 and get some more detail on it. I would -- I
65
1 would say given that the magnitude of
2 percentage in dollars of the fund balances,
3 that the extent to which any of the
4 uncollected tuition might be part of the fund
5 balance issue wouldn't account for that and it
6 certainly wouldn't get the cyber schools down
7 to the same level of fund balance that -- that
8 school districts are required to adhere to.
9 But we'd be happy to dig into the
10 AFR's and the reports that we have to see if
11 we get a closer handle on that.
12 But I think it may be part of it but
13 it wouldn't account for it.
14 REPRESENTATIVE ROHRER: I think that
15 would be helpful if we could work on that.
16 Okay. I would have some additional
17 questions, but I think you want to stay on
18 time.
19 CHAIRMAN ROEBUCK: That's right.
20 REPRESENTATIVE ROHRER: We're going
21 to 4:30, are we not? So okay. I have other
22 questions but I'll hold them for the sake of
23 moving on.
24 THE AUDIENCE: Ask them.
25 CHAIRMAN ROEBUCK: Representative
66
1 Hanna has questions.
2 REPRESENTATIVE HANNA: Thank you,
3 Mr. Chairman. That came through loud and
4 clear, didn't it?
5 First to the department, in your
6 testimony you talked about the tuition rate
7 being based on the underlying cost structure.
8 And you're suggesting that that's the change
9 that you'd like to see made. Okay.
10 I see a similar problem with brick
11 and mortar charter schools, and I'd just like
12 you to address that. I mean even with the
13 brick and mortar charter schools, once again,
14 are we not basing tuition on the host school
15 district rather than on their actual
16 underlying cost structure?
17 And let me also add, after you
18 address that, I'd like PASBO to address it,
19 and also, if I'm not mistaken in the testimony
20 from PASBO, there is a chart that reflects
21 that some of the extraordinary fund balances
22 are, in fact, the brick and mortar schools,
23 not just at cyber charter schools.
24 So shouldn't we be looking at this
25 legislation to address both cyber charter
67
1 schools and brick and mortar charter schools?
2 And I'd like to address that question
3 to both the administration and PASBO.
4 Thank you, Mr. Chairman.
5 EXEC. DEPUTY SECRETARY GLUCK: I
6 think the part of the question I can answer is
7 that you're right, that the payment to a brick
8 and mortar charter school and a cyber charter
9 school again are based on the school district
10 of residence expenditures.
11 So in both cases not associated with
12 the expenditures of either the brick and
13 mortar or the cyber charter school.
14 I think on its face we can see that
15 the -- that the cost structure difference
16 between a brick and mortar school district is
17 going to be significantly different than a
18 cyber charter school, and I think we've
19 documented that and I think that seems clear.
20 If nothing else, maybe it's a plant, physical
21 plant to go to that.
22 I think the -- the gap, to the extent
23 to which there is one, between a brick and
24 mortar charter school and a school district
25 would be narrow. But the fundamental question
68
1 of it's based on school district of residence
2 expenditure, that's a statement of fact.
3 Whether you're ready to take that on
4 in brick and mortar or cyber, certainly that's
5 your call. We think it's a serious issue in
6 the case of cyber charter. One that needs
7 immediate attention and so we applaud the
8 committee's focus on that at this point.
9 MR. HIMES: You are correct,
10 representative. The chart does show brick and
11 mortar and cybers. The issue of fund balance
12 is one that all school districts are bound by
13 the school code. We see no reason not to
14 apply them uniformly.
15 The difference obviously is, as
16 Deputy Secretary Gluck said, the cost
17 structure is different between cyber education
18 and a brick and mortar and different kind of
19 costs, et cetera.
20 The brick and mortar may be more
21 closely affiliated with its local public
22 school and not having a sort of the statewide
23 basis.
24 But the issue of fund balance is one
25 that all school districts abide to and we
69
1 wouldn't know why it wouldn't apply uniformly.
2 CHAIRMAN ROEBUCK: Thank you very
3 much. We're going to move to our next panel
4 of testifiers. Thank you.
5 We're going to move to our next panel
6 of testifiers. Tim Allwein, Assistant
7 Executive Director of Governmental and Member
8 Relations, Pennsylvania School Boards
9 Association; Lawrence Feinberg, Board of
10 Directors, School District of Haverford
11 Township; Roberta Marcus, Board of Directors,
12 Parkland School District; and John
13 McKelligott, President, William Penn School
14 District Board of Directors.
15 MR. ALLWEIN: Thank you, Chairman
16 Roebuck. If I may, Mr. Chairman, I'm just
17 going to let Larry, Roberta, and John make
18 their comments and then I'll go last. So
19 Larry.
20 MR. FEINBERG: Thank you. Chairman
21 Roebuck and members of the committee, thank
22 you very much for the making the effort to
23 schedule these additional hearings and for the
24 opportunity to present testimony to you
25 regarding cyber charter funding, oversight,
70
1 and accountability.
2 In particular, I'd like to thank
3 Representatives Curry, Leach, McIlvaine Smith,
4 and Milne for their responsiveness to their
5 southeastern Pennsylvania school districts'
6 concerns with these issues, and I'd like to
7 also thank Representatives Beyer, Vitali, and
8 DeLuca for sponsoring legislation that has
9 helped to focus the dialogue on funding,
10 oversight, and accountability.
11 I'm here today wearing a few
12 different hats. I'm a second term school
13 board member from Haverford Township. I also
14 chair the Delaware County's legislative
15 council with representatives from each of the
16 15 districts in Delaware County. I'm the PSBA
17 legislative county coordinator for Delaware
18 County.
19 And, finally, I co-chair the
20 southeastern -- excuse me -- the Southeastern
21 Pennsylvania School Districts Education
22 Coalition, which is a grass roots advocacy
23 group of school board members from 14
24 districts in Montgomery, Delaware, Chester and
25 Lehigh.
71
1 Let me be perfectly clear on one
2 important point so there's no
3 misinterpretation. There's no question that
4 cyber charters have a place in the educational
5 spectrum and that they work well for many
6 students.
7 This discussion is not about putting
8 cyber charter schools out of business. But it
9 is about the disconnect between their
10 authorization, funding and oversight. It is
11 about accountability for taxpayers' monies,
12 and it is about another rapidly growing
13 unfunded state mandate in the context of Act 1
14 budget caps.
15 Whether intentional or not, the
16 Commonwealth has made a significant policy
17 change with the cyber charter school law. PDE
18 estimates that nearly 40 percent of new cyber
19 students were previously enrolled in a
20 nonpublic school or a home education program.
21 If that 40 percent figure is
22 accurate, then during the 2004/'05 school year
23 alone, 493 districts were mandated to provide
24 just under $30 million in new tax dollars for
25 those students. That's net of -- well, that's
72
1 about 27 percent of that actually gets
2 reimbursed.
3 At the Delaware County level,
4 countywide, over four years, we started with
5 about a million dollars in cyber tuitions.
6 The next year it was a million nine, two
7 million five. Last year it was just under $4
8 million that were spent by 14 out of the 15
9 districts. Chuck -- Chester Upland was not
10 reporting.
11 William Penn School District
12 significantly spent over a million dollars
13 last year on cyber tuition. In my district
14 according to the PDE form 363, we're required
15 to pay $8800 in tuition for a regular
16 education student and just under $23,000 for a
17 special education student.
18 Earlier we heard a figure of 16, but
19 this year we have to pay $22,968 for each
20 special ed student.
21 The Chester County I, I understand,
22 has an account where the 21st Century cyber
23 school has been accommodating excess tuition
24 over actual costs but Section 1743-A (a) (1)
25 of the school code prohibits the school from
73
1 reducing their tuition charges or providing a
2 refund for the difference between our tuition
3 payments and what it actually costs to educate
4 a student.
5 To elaborate, more on the special ed
6 charges, I will tell you that last year, not
7 counting gifted students, Haverford had 1731
8 special ed students.
9 If we were to use our cyber charter
10 tuition charge of $22,968, the total per
11 student tuition would be just under $40
12 million and that compares with our total
13 special education budget for this year of
14 $13.6 million.
15 So there's something wrong with the
16 special ed calculations there.
17 In terms of oversight and
18 accountability, more troubling to -- to me and
19 to my board and to the board members that I've
20 spoken with are reports that Pennsylvania
21 Cyber School, where the majority of our cyber
22 students are enrolled, was able to take a $10
23 million cash payment out of their accumulated
24 fund balance to prepay a 20-year lease for
25 office space in a performing arts center that
74
1 was being built in the town of Midland, which
2 essentially funded construction of that
3 facility.
4 While a performing arts facility
5 might be a great thing for the residents of
6 Midland, is it appropriate for property
7 taxpayers across the state to be funding it
8 through their districts' cyber charter school
9 payments?
10 If that $10 million had come from a
11 single school district, there would be hell to
12 pay. But if you spread it over 370 school --
13 school districts with no oversight, nobody
14 knows about it.
15 I can tell you there's been no press
16 in southeastern Pennsylvania. Taxpayers
17 aren't aware of this. Most school board
18 members aren't aware of it. There's no
19 outreach and, consequently, no accountability
20 for our taxpayers' dollars.
21 It's 334 miles from Haverford
22 Township to Midland. I don't think that many
23 of our residents are going to get to use the
24 performing arts facility.
25 The message that school boards are
75
1 getting from the cyber schools is short and
2 sweet. Just give us the money and don't worry
3 yourselves about what we do with it.
4 As an elected official, whose
5 responsibilities include raising revenue via
6 my neighbors' property taxes, the folks that I
7 see in the supermarket, that's just not
8 acceptable.
9 Cyber charter schools are public
10 schools. They accept public money and,
11 therefore, they're subject to public scrutiny,
12 public criticism, public accountability,
13 unfunded and underfunded government mandates,
14 and late payments by government entities.
15 Welcome to the world of public education.
16 It's what we live with all the time.
17 In closing PSBA and its district asks
18 the following:
19 We ask that you not hold school
20 directors accountable for expenditures that
21 they have no control over.
22 We urge you to support legislation
23 that would put into place oversight and
24 accountability measures that would preclude
25 any more $10 million facilities from being
76
1 built inappropriately and that would ensure
2 that there's appropriate stewardship for the
3 monies.
4 We request that you support fair and
5 reasonable regular education and special
6 education tuition rates for a cyber education
7 that result in students meeting state
8 standards.
9 We ask that you support legislation
10 that would ensure that if a district or
11 intermediate unit offers its student the
12 option of an online curriculum, the students
13 of that district who enroll in any other cyber
14 school would do so at the expense of the
15 parents, not of the district.
16 And we urge you to have the
17 Commonwealth assume all funding for cyber
18 charters.
19 The Commonwealth authorizes them.
20 Ostensibly the Commonwealth is overseeing
21 them. That -- the oversight has got to match
22 the money.
23 Thank you again for your time and
24 attention, and please do not hesitate to
25 contact me if I might provide any additional
77
1 information.
2 MS. MARCUS: Good afternoon. Wait?
3 Good afternoon, Chairman Roebuck and members
4 of the House Education Committee. I would
5 also like to express my sincere thanks for
6 allowing me to speak briefly today on cyber
7 charter schools.
8 I am Roberta Marcus, a school
9 director with the Parkland School District in
10 Lehigh County, where I served for the past 12
11 years. I'm also, for the record, the 2007
12 second-vice president of the Pennsylvania
13 School Boards Association.
14 I am here today in my capacity as a
15 school director for Parkland, one of the many
16 districts that have approved resolutions in
17 support of House Bill 446.
18 Between the years 2001/'2 school year
19 and 2006/'7 school year, these Lehigh County
20 school districts have had costs the cyber
21 charter school students of the following
22 amount.
23 In Parkland School District we sent
24 $911,786 with reimbursement dollars from the
25 Commonwealth totaling approximately $232,635.
78
1 Allentown School District has $1.8 million
2 with a reimbursement of $289,000. East Penn,
3 $1.4 million with a reimbursement of
4 $243,000. Northern Lehigh $177,000 with a
5 reimbursement of $42,000.
6 Some of these Commonwealth
7 reimbursement amounts are significantly less
8 than the legislative 30 percent
9 reimbursement.
10 Also, please note that the
11 reimbursement to school districts lags a year
12 behind our budgetary process. You can see the
13 complete resolutions I have on my Attachment
14 A.
15 For the 2007/2008 school year,
16 Parkland School District budgeted $325,000 in
17 cyber school payments. This is a 16.2 percent
18 cost increase over the 2006/'7 school year.
19 However, we do not expect our budgeted amount
20 to be that final number.
21 Due to the fact that students have
22 the opportunity to transfer to cyber charter
23 schools at any point during the school year my
24 fellow board members and I have never been
25 able to approve a budget where the allocated
79
1 monies for cyber school payments did not have
2 to be increased months later.
3 I ask you how can any school member
4 go to their taxpayers and tell them that the
5 district needs to spend extra dollars to cover
6 possible cyber school payments when we don't
7 know how much that particular line item will
8 cost each year and can't support that request
9 with accurate enrollment numbers?
10 We do not overbudget as some have
11 suggested through this line item.
12 I think you would agree that
13 Pennsylvania taxpayers do not want their
14 school boards doing business in that manner.
15 As Mr. Feinberg said earlier, and I
16 agree with, cyber charter schools have a place
17 in the education of Commonwealth children, but
18 a disconnect exists between cyber charter
19 schools and the taxpayers that must fund
20 them.
21 I submit to you that the school board
22 members are that missing link. As
23 executive -- I'm sorry.
24 As elected representatives who are
25 ultimately responsible for the taxpayer
80
1 dollars that come to us, we must be prepared
2 to answer questions about how our investments
3 are meeting the goals of our district and the
4 educational needs of all students and that
5 includes the investments we make on behalf of
6 our taxpayers to cyber charter schools.
7 We cannot do that under the current
8 law because cyber charter schools are not
9 required to report on the progress of a
10 district's children to the school board who
11 invests taxpayer funds in them.
12 Being accountable is a primary
13 responsibility of a school board director and
14 particularly being accountable to the
15 taxpayers means that cyber charter schools
16 must have the same financial accountability
17 that the General Assembly deems is important
18 for school districts.
19 This includes, among others that have
20 already been mentioned today, restrictions on
21 unreserved fund balances, independent
22 auditing.
23 Recognition that cyber charter
24 schools should not receive full per-student
25 funding for kindergarten if districts'
81
1 taxpayers have not committed to implementing
2 full-day kindergarten.
3 A requirement that the funds provided
4 by districts' taxpayers should only be used
5 for cyber charter school educational purposes
6 and not for services or schools that are
7 outside of the scope of the cyber charter
8 school's instruction.
9 And annual reports from cyber charter
10 schools on how district resident students are
11 performing.
12 The department's proposal for funding
13 cyber charter schools is a logical approach to
14 reform the cyber school funding system if the
15 General Assembly determines that it is unable
16 to fully fund the mandate that it placed on
17 districts ten years ago. Know that any
18 proposal would be incomplete if cyber charter
19 funding reform is not completed in conjunction
20 with members -- with measures to address the
21 deficiencies with cyber school charters'
22 accountability to taxpayers.
23 PSBA, and my fellow school board
24 directors and members, look forward to working
25 with this committee, the Department of
82
1 Education, and the Administration to approve
2 legislation that would further facilitate a
3 more accountable public education system.
4 Thank you again for this opportunity.
5 MR. MCKELLIGOTT: Chairman Roebuck,
6 members of the House Education Committee, my
7 name is John McKelligott. I'm the president
8 of the Board of Directors of the William Penn
9 School District in eastern Delaware County.
10 I'm here as a school board director in William
11 Penn.
12 I appreciate the opportunity to
13 appear before you today and speak to this --
14 this issue. It's a significant issue
15 financially for our district and I am thankful
16 for the opportunity to be able to advocate on
17 behalf of our taxpayers and our citizens and
18 our children.
19 It's an important issue for us. We
20 spend in excess of a million fifty-four
21 thousand dollars annually on cyber charter
22 school tuitions. So that's a line item that
23 catches anyone's attention at budget time.
24 We are a suburban school district
25 bordering Philadelphia, but like every place
83
1 else in the world we have experienced changes
2 in the -- in recent years and we have an aging
3 population and we have new people moving in.
4 We educate approximately 5500
5 students. We have a significant minority
6 population. Our minority population is
7 approximately 84 percent of our student body.
8 We have become -- we have increasing
9 challenges from poverty in our district. We
10 now have 65 percent of our students receiving
11 free and reduced lunch services.
12 We have a substantial special
13 education requirement question. We always run
14 20 percent or more of our population in -- as
15 special needs students, and we have
16 significant ESL and ELL needs.
17 We are also a district -- we have to
18 admit -- that has been challenged
19 academically. We have made significant
20 strides in recent years by auditing ourselves
21 for our curriculum and we are improving
22 academically.
23 Nevertheless, we are doing that in
24 the context that we are a financially pressed
25 school district. Not only high needs but a
84
1 small tax base.
2 The way Delaware County is set up,
3 the boroughs that comprise our district,
4 basically our residential areas and the
5 commercial and industrial areas are excluded
6 from our district. That's a historical fact.
7 But it doesn't do anything to help
8 the homeowners in our district. We have
9 numerous small, modest residences. We have an
10 aging population and a significant proportion
11 of our citizens are senior citizens living on
12 fixed incomes.
13 As measured -- as measured by
14 equalized mills, our district is sixth this
15 year in the Commonwealth in terms of tax
16 effort.
17 This is an unfortunate statistic for
18 our district. In my 12 years on the board of
19 school directors, we have always been in the
20 top ten out of 501 districts. We have
21 fluctuated between fourth and eighth, but we
22 run our operations in a very financially
23 pressed, high needs and minimal resource
24 environment.
25 And that's why with taxes at these
85
1 levels, which blight our communities, when we
2 look at a budget item of $1.1 million, it is
3 significant to us and our taxpayers. This has
4 been increasing since 2004 when our budget
5 item was $235,000. That is since 2004 a 448
6 percent increase that we have experienced in
7 this. So it's significant to us.
8 Now, in conducting our operations
9 financially, with this level of tax effort and
10 minimal resource, we do not run significant
11 balances.
12 In a good year we run a one-half of
13 one percent fund balance. Recently we had a
14 $62,000 fund balance on a budget in excess of
15 $60 million.
16 That is not to complain about our
17 operations, but it is to say that in a
18 district like this, we are the poster child
19 for property tax reform, but when our
20 taxpayers look at the fund balances that are
21 reflected -- which are generated by the
22 existing financing for cyber charter schools,
23 our taxpayers are saying things like windfall
24 and they're beginning to get a little excited
25 and you can understand.
86
1 Taxes at the level that our taxpayers
2 are paying, property taxes, they're so high
3 that they constitute a blight on the economies
4 of our districts.
5 We have to look to a fiscal
6 watchdog. And what we are asking for, we're
7 not trying to put cyber charter schools or
8 charter schools out of business. We want to
9 compete and we're prepared to compete, but we
10 need some relief from the tax burden
11 represented by the fund balances at that
12 level.
13 You look at these -- you look at
14 these fund balances at the area of 30 to 40
15 percent, or even 16 or 17 percent, that's not
16 fair competition to us, and our petition to
17 the General Assembly is for redress of this
18 grievance.
19 We need some relief at that level.
20 We need a more fair set of rules for financing
21 the cyber charter schools.
22 Thank you for receiving our input
23 today.
24 MR. ALLWEIN: Very, very quickly I
25 promise. I don't want to say a lot about
87
1 accountability. I think that everybody that
2 has spoken so far has talked about that.
3 Suffice it to say, when we talk about
4 accountability in cyber schools, we talk about
5 accountability to the public.
6 It's required by Section 715-A of the
7 charter school law which requires charter
8 schools to be accountable to parents, the
9 public, and the Commonwealth.
10 And I hope as we hear from the cyber
11 school folks later in the hearing that -- that
12 they will address how they're meeting that
13 responsibility.
14 The other thing I wanted to talk
15 about quickly -- and, again, I'm sure you'll
16 hear it later this afternoon -- is one of
17 cyber school advocates favorite quotes is
18 their schools have to meet the same
19 requirements as the school district.
20 I think at PSBA we have a personal
21 issue with that, and I'll get to that in a
22 minute, but at the very least that is simply
23 not true.
24 Section 1732-A of the school code
25 contains a partial list of the school code's
88
1 provisions and says these are the only ones
2 that charter schools have to follow. They are
3 exempt from the rest.
4 And if I could just give one or two
5 examples of some of the things that charter
6 schools are exempt from, Section 106, which
7 requires publications of notices in newspapers
8 of general circulation; Section 408 requiring
9 accounts and records of proceedings to be open
10 for inspection by a taxpayer. Charter
11 schools, brick and mortar and cyber schools,
12 are exempt from these things.
13 Two of the more notable examples can
14 be found in Section 1724-A, which says that
15 only 75 percent of professional staff members
16 of a charter school have to be certified and
17 that employees of a charter school may, but
18 don't have to, organize under Act 195.
19 It's personal to PSBA because we were
20 the ones that were responsible for getting
21 those things into law. Particularly those
22 last two things.
23 Because we thought that if we allowed
24 charter schools to have some exemptions, some
25 freedom from some of the things that regular
89
1 -- that school districts have been complaining
2 about for a long time, that perhaps there was
3 something to be learned from that.
4 And so, you know, if you look at the
5 charter school law, it talks about the charter
6 schools being maybe -- it doesn't say the
7 exact words laboratories, but, in effect,
8 that's what we were trying to do, is, look, if
9 we can exempt them from some things hopefully
10 in a couple years they can come back and say,
11 look, these are -- this is how this affected
12 this or that affected us and it was either
13 good or bad. Hopefully the good things could
14 be applied to school districts.
15 Unfortunately, as far as I know,
16 those questions have gone unanswered. I am
17 personally not aware of any kind of report
18 that mentions what the effect those
19 requirements or lack of requirements had on
20 charter schools.
21 And as far as PSBA is concerned,
22 that's been one of the more bigger
23 disappointments of the charter school law.
24 But even more egregious to us is the
25 fact you have people in newspapers and in the
90
1 media around the state saying that charter
2 schools, and particularly cyber charter
3 schools, are subject to the same rules.
4 Clearly, and as I illustrated, they
5 are not. And what's really bad is that many
6 of the people that are making these statements
7 are former public school administrators who I
8 think should know better and have a better
9 understanding of the law.
10 So I hope you can get the -- the
11 answers to the questions of how freedom from
12 some of these mandates has helped or hindered
13 charter schools and how they are publicly
14 accountable as the school code requires.
15 Thank you.
16 CHAIRMAN ROEBUCK: Thank you. I'm
17 going to pull up the next panel of speakers
18 and they are James Estep, Superintendent,
19 Mount Union Area School District; Michael
20 Ognosky, Superintendent, Montrose Area School
21 District; and also then John Freund, school
22 district solicitor.
23 MR. ESTEP: Good afternoon. Thank
24 you on behalf of the Mount Union Area Schools
25 and PARSS for this opportunity to discuss
91
1 cyber charter legislation's impact on my
2 school district.
3 To give you a quick snapshot of the
4 Mount Union District and community, we have
5 approximately 9700 people living in our area.
6 About 1533 are students in our K-12 system.
7 About 27 percent of our citizenry are
8 considered census poor. Of the 501 districts
9 in the Commonwealth, we usually rank about
10 480th in local wealth, meaning that the only
11 districts that are poorer than us are mainly
12 those in urban settings and a handful of other
13 rural schools.
14 A mill of tax in Mount Union
15 generates about $73,000 in revenue for the
16 district. Under Act 1 our inflationary index
17 allow us to collect just under a mill, or
18 $71,000.
19 Neither Mount Union, nor PARSS, as
20 those who proceeded me stated, seek to do away
21 with charter schools or cyber charter
22 schools.
23 We employ cyber education in our
24 school system in order to expand curriculum
25 options and scheduling options for our
92
1 students as another means of providing quality
2 learning experiences outside the traditional
3 spectrum of delivery.
4 We have two primary concerns with
5 cyber charter legislation in our community.
6 The first of which is the appearance of a lack
7 of accountability for how funds that are
8 provided by our local taxpayers are being used
9 by cyber charter schools to educate their
10 students.
11 My community isn't convinced that its
12 tax dollars are being spent with both
13 integrity and efficiency and feels that it has
14 the right to assurance that these funds are
15 spent wisely.
16 In '06/'07 alone our district paid
17 out approximately $380,000 to cyber charter
18 schools to educate around 44 students. That's
19 about $8600 per child.
20 To illustrate the impact on Mount
21 Union, this is the equivalent of needing over
22 five mills of tax revenue to educate a group
23 of children representing 2.8 percent of the
24 total district population.
25 In places where cyber charter
93
1 students needed special education services,
2 their individual tuition rates were as high as
3 $16,000.
4 Now, before I made the leap into the
5 wonderful world of public school
6 administration, I was an English teacher, and
7 specifically I had a passion for western
8 literature, British literature, so I taught
9 Robin Hood.
10 The way things are structured now, it
11 seems like it may be a warped version of Robin
12 Hood where instead of robbing from the rich to
13 give to the poor, we're robbing from the poor
14 to give to the few.
15 Herein then lies our second concern
16 with the legislation. Cyber charter schools
17 are siphoning financial resources away from my
18 district.
19 As they do so, educational
20 opportunities for our remaining children, and
21 even basic facility improvement plans, are
22 dashed. They are the casualties of a noble
23 minded, but in our opinion, ill-constructed
24 concept of legislation.
25 $380,000 per year in Mount Union
94
1 would allow us not only to address academic
2 program improvements but also an ailing
3 physical infrastructure in a 54-year-old high
4 school building.
5 What we seek, at the very least, is
6 an opportunity to compete on the level playing
7 field and we believe under a fair and
8 equitable funding system, utilizing existing
9 staff, hardware/software, and our membership
10 in blendedschools.net, that we can provide
11 accountable and equal to better cyber
12 education at a lesser dollar outlay.
13 Under the current legislation,
14 however, there's no mechanism that allow us to
15 do so.
16 You'll notice in my original packet
17 that I submitted to you that our school board
18 did indeed adopt a resolution put forth in
19 House Bill 446 by Karen Beyer and we
20 appreciate your efforts there.
21 Last, I would want to say I thank you
22 for the consideration. I want you to know
23 that we're very willing to work with our local
24 legislators to find a solution that benefits
25 our students and taxpayers alike -- alike.
95
1 And my final, I guess, thought is
2 this: My first year as a superintendent I had
3 a wonderful board president who was a retired
4 naval ship commander.
5 And the first piece of advice he gave
6 me that's really stuck with me, is, Jim, you
7 realize that about 95 percent of the decisions
8 we make can be changed without causing
9 terrible detriment to anyone.
10 Keep that in mind when you go through
11 the superintendency.
12 I think that's sage wisdom, and I
13 think and -- thank you guys for the efforts
14 you're trying to make to possibly make some
15 changes and rethink how things are
16 legislated.
17 Thank you very much.
18 MR. OGNOSKY: Good afternoon. Let me
19 begin by thanking the committee for providing
20 me with this opportunity to talk about the
21 cyber school legislation and how it's impacted
22 the Montrose Area School District.
23 I'm the superintendent of that
24 district, as well as a member of the Board of
25 Directors of the Pennsylvania Association of
96
1 Rural and Small Schools.
2 I've been the superintendent in
3 Montrose for the past seven years and as a
4 member of the PARSS board for the past four
5 years I have learned from the experiences in
6 my school district regarding cyber education
7 that it really doesn't vary from the other
8 rural school districts that I'm associated
9 with.
10 First, let me emphasize that Montrose
11 Area School District and PARSS are not seeking
12 to eliminate cyber charter schools and online
13 education.
14 We strongly endorse cyber education
15 in our district and see it as a very important
16 way to ensure that rural students receive a
17 quality education and have an opportunity for
18 educational experiences that they would not
19 have received otherwise.
20 We sponsor our own online academy
21 that offers the opportunity for full-time,
22 part-time, and tutorial educational services.
23 Indeed, we have students who have taken
24 advantage of all three.
25 We utilize our own staff, our own
97
1 instructors in delivering that, and we require
2 that all those instructors be highly
3 qualified.
4 We have found that given the right
5 circumstances cyber education is truly the
6 most useful alternative to students and their
7 parents.
8 I've provided you a summary of the
9 last six years of our district deductions and
10 reimbursements for charter schools in years
11 2001/2002 through this current year and what's
12 been deducted in 2007/2008.
13 You can see that over those past six
14 years, our small school district has deducted
15 from our basic funding approximately $900,000
16 in that six-year period. Conversely, we've
17 received in reimbursement from the state
18 approximately $250,000, which is about 27
19 percent of that cost.
20 Our district is a small district. We
21 have 1950 students and three buildings. And
22 we are 250 square miles. Transportation in
23 our district is over ten percent of our
24 budget. We spend almost $2 million a year of
25 our $21 million budget on transportation.
98
1 Our current millage is 43 mills. A
2 mill in our district gets us about $190,000 of
3 operating revenue.
4 We had 21 cyber school students last
5 year and those 21 cyber school students cost
6 our district almost a quarter of a million
7 dollars. Over a mill.
8 To put that into perspective, one of
9 our buildings has 390 students. One of our
10 elementary schools.
11 The budget to run that building,
12 after you take out transportation of the
13 students to and from that building, after you
14 take out feeding those students both a
15 breakfast and a lunch, after you take out the
16 teachers' salaries and their benefits, is less
17 on books and supplies for those 390 students
18 than we spent on our cyber school students
19 last year.
20 I've been in education for 34 years
21 as a teacher, a building principal, and now as
22 a superintendent.
23 I'm here today because of my father.
24 My father said to me, Mike, when you think
25 something isn't right, speak up.
99
1 And with that background in education
2 and looking at what I feel education stands
3 for, I think there's two things that we really
4 need to -- need to address in any kind of
5 legislation.
6 First, public education in
7 Pennsylvania isn't a business. It's not run
8 for profit. You've reflected that in your own
9 legislation, rightfully so, by limiting the
10 fund balances of public school districts.
11 All that I ask is that you do the
12 same thing in regard to cyber schools.
13 Secondly, and something that we
14 really haven't talked about much today, that
15 needs to happen, either in legislation or by
16 procedure, the cyber education is here to
17 stay. Cyber schools are here to stay. And
18 right now public schools and cyber schools do
19 a terrible job of communicating.
20 I've heard about the financial, the
21 lack of communication in regard to bills, but
22 as a -- as a practitioner in the field,
23 there's a -- there's a bigger issue for me.
24 Public education is about students,
25 and we have had over the past six years in any
100
1 given year anywhere from seven to 25 students
2 enrolled in cyber schools.
3 What that means is that you have a
4 large fluctuation and a large change in that
5 students bounce back and forth from a public
6 school into a cyber school, out of a cyber
7 school back into a public school.
8 And what happens is with every one of
9 those moves you need an exchange of records.
10 You need to place students in the proper place
11 so that they can receive the appropriate
12 education.
13 And right now there is a -- there is
14 a block in that communication. It is not
15 working and students are suffering in this
16 Commonwealth because of it. And I haven't
17 heard that addressed, and I ask that somewhere
18 that be addressed, either in procedures by the
19 department or in legislation.
20 Thank you.
21 MR. FREUND: Good afternoon,
22 Mr. Chairman and members of the committee. My
23 name is John Freund and I'm a member of the
24 law firm of King, Spry, Herman, Freund, and
25 Faul, with offices in Bethlehem, Allentown,
101
1 and Stroudsburg.
2 I have been practicing school law for
3 about 30 years now. I am chair of the
4 educational practice section -- section of the
5 firm.
6 By background, I am also involved
7 with many organizations that accredit schools
8 and many of those schools accredited are
9 distance-learning schools which in the public
10 context, of course, we know as cyber schools.
11 And finally I'm a former school board
12 president and was a former school board member
13 until Mrs. Beyer through a devastatingly
14 effective campaign unseated me.
15 Despite that -- despite that, I was
16 very happy when she called to ask me to come
17 and give some insight on some of the issues
18 that I've encountered with regard to both
19 cyber and brick and mortar schools and also
20 give support to her -- to her excellent bill.
21 Let me just say that the whole
22 charter idea is a still relatively new
23 experiment. The brick and mortar charter law,
24 which if I can call it that, was adopted only
25 in 1997.
102
1 It was adopted as kind of a
2 sink-or-swim sort of measure. There wasn't a
3 whole of testing and experimentation that went
4 on to see what worked.
5 It was adopted and charter schools
6 began to pop up.
7 I think by way of perspective, it's
8 useful for everyone to keep in mind that in
9 the 1997 legislation there was not even a
10 mention of cyber schools. The technology, of
11 course, proceeds much more rapidly than our
12 democratic processes do.
13 Back in 1979 I was hired, I and my
14 firm was hired by various school districts to
15 defend against the prospect of brick and
16 mortar charter schools, and now I'm happy to
17 say that we count many charter schools among
18 our own school clients.
19 And although there has been a rough
20 push to reform as such, and some of the other
21 witnesses today have -- have touched on that,
22 there nevertheless remain numerous legal
23 issues that impact charter education, the
24 brick and mortar schools of course primarily
25 because we have the most experience with
103
1 those, but let me say that the issues that we
2 address in public education, and with the
3 charter schools in particular, are even more
4 challenging in the area of the cybersphere.
5 My office, as well as I personally,
6 have either advised school clients, public
7 school clients or represented public school
8 clients or cyber clients in just some of the
9 following areas, all of which continue to some
10 degree confound practitioners and the courts
11 who have had little opportunity to -- to look
12 at what the law means.
13 Some of those areas are cost
14 accountability.
15 Sunshine operation, that is,
16 operating the cyber schools according to the
17 dictates of the Sunshine Law.
18 Governance, many of the charter
19 schools that we are exposed to have little
20 experience in what it means to govern a small
21 corporation, much less a public school.
22 Special education, something that was
23 mentioned earlier here. My office has been
24 involved in various matters concerning the
25 charter schools' special education and I would
104
1 endorse the views of Dr. Lewis up here when he
2 was asked to comment on that and I would say
3 that although the law on its face would seem
4 to provide the obligation placed on -- on
5 charter schools, in actuality these schools
6 are challenged in terms of their students, in
7 terms of understanding these probably
8 unnecessarily complex laws in special
9 education. It's a real trial for charter
10 schools and often falls back to the public
11 school districts and under the no child left
12 behind scenario adds the potential of
13 unnecessary and expensive liability.
14 Truancy, a current continuing and
15 vexing issue not only in the public schools
16 but particularly difficult to even figure out
17 what truancy means in the context of cyber
18 education.
19 Discipline, enrollment, dual
20 enrollment, residency, compliance with NCLB,
21 PIAA requirements, various employment issues.
22 All of these things we have had
23 personal experience with in the context of
24 charter schools and cyber charter schools.
25 With all that said, just to set a
105
1 little background, my comments on the present
2 legislation will be, I hope, swift and to the
3 point.
4 I know that pricing and costs is what
5 concerns you most today. In that regard I
6 think the Beyer bill certainly presents the
7 most efficacious solution that's been
8 presented that I see.
9 The nature of the cybersphere, the
10 marginalization of residency in our current
11 society, transients, many school districts I
12 deal with are urban school districts, and you
13 can count the number of months that a student
14 may remain in that school district.
15 These two factors and many others
16 make full state funding of cyber education the
17 only reasonable solution.
18 We heard earlier mention today of Act
19 1. With the advent of the 19 -- or the 2002
20 cyber school law and the shift from the
21 chartering by the local districts to the
22 licensure by the state, the prospect of paying
23 unknown and unnoticed cyber school expenses
24 reaches almost the proportion of ambush in the
25 context of some school districts.
106
1 Cost-based pricing, which we've heard
2 a lot about today, and is part and parcel of
3 Bill 446, as I understand it, it is in my view
4 the only thing that would earn a passing grade
5 in Econ 101. Pricing has to be based -- thank
6 you -- pricing has to be based upon cost and
7 not the cost of education in a public
8 district.
9 With that said, my primary suggestion
10 with regard to the Beyer bill, which I
11 understand 446 provides essentially that the
12 secretary could determine costs based on
13 actual auditing cost of operations or by
14 regulation establish a uniform annual payment
15 based on statewide average, my recommendation,
16 based as a long-time practitioner in this
17 area, is that any formula for payment of --
18 for determining payment amount ought to be
19 determined through the public regulatory
20 process.
21 The reason I say that is that there
22 are many areas in education in which what we
23 call nonregulatory guidance is floating
24 around, and when we lawyers are approached
25 with that, frankly, we don't know what it is.
107
1 Our clients come to us and we have an
2 oath to defend our clients and represent them
3 aggressively. We have to tell them at times
4 it's not legal. You don't have to follow it.
5 We don't know what it is. Sometimes it's
6 unfair.
7 So I would encourage you in
8 considering this funding legislation to not --
9 not to adopt standard formulas but to allow
10 that process to be dealt with by the public
11 regulation system in which careful attention
12 could be paid to the most efficacious
13 formula.
14 In that regard, finally, I just ask
15 the committee on this very important issue to
16 be prompt. The issue demands an immediate
17 solution. Be clear, be fair, but simple. The
18 best advice I can give anyone to keep their
19 legal costs down and -- and be persistent --
20 and be persistent because these -- these cyber
21 laws represent really, you know, experiments.
22 They are really works in progress. They need
23 constant maintenance and constant attention.
24 Thank you.
25 CHAIRMAN ROEBUCK: Thank you very
108
1 much. I want to ask the other presenters if
2 they would join, rejoin the tables. We're
3 going to ask questions, and I do have a
4 question from Representative Leach.
5 REPRESENTATIVE LEACH: Thank you,
6 Mr. Chairman.
7 First, I would say to Ms. Marcus that
8 I'm a graduate of Parkland High School and
9 I'll leave it to you to determine the
10 appropriate level of pride taking that fact.
11 As I -- as I sort of wrestle with
12 this a--and forgive the basic nature of this
13 analysis -- but it seems to me there's two
14 fundamental problems.
15 One is the assertion that the costs
16 are burdensome and nonreflective of the actual
17 costs of the education.
18 And, two, that it's hard to budget
19 for this because there's no way of predicting
20 precisely the number of children who are going
21 to be taking advantage of this and that
22 changes over the course of the year.
23 So let me -- let me -- let me take
24 this second one first very quickly as I see --
25 as I make sure I understand what -- what we're
109
1 calling for in terms of a solution.
2 Is it your suggestion that we have a
3 deadline for when kids can declare that
4 they're going to be or parents living in the
5 district can declare they're going to be
6 taking advantage of a cyber charter school?
7 And this is open to anyone who wants to answer
8 it.
9 Is that what would -- is that what
10 would solve that problem in your view or is
11 there another solution to that?
12 MS. MARCUS: Actually we -- we are
13 very proud of you. We're Parkland pride. Our
14 double P stands for being that. And thank you
15 for that comment.
16 I can't speak to it directly in terms
17 of how a superintendent or other school
18 districts might feel. We are, as a public
19 school, as you know, as a public entity,
20 receive enrollment on a daily basis over the
21 180-day school year calendar. So we're open
22 for business every day of the year.
23 But when you don't have a sense of
24 what your costs are going to be either
25 internally or externally, you need to put
110
1 money into a budgetary reserve, which we do.
2 We have a $120 million budget, and we've only
3 put about one percent of that in a budgetary
4 reserve.
5 So we're using about $1.3 million to
6 meet all our costs and that would include
7 someone who decides to enroll as a cyber
8 charter student.
9 I think the two-prong answer to that
10 would be, yes, there needs to be some
11 oversight in terms of how that would be
12 afforded to school districts, but I think it
13 would be taken care of by the second-prong
14 approach which is if you could determine what
15 the tuition rate would be so that it's not a
16 fluctuating number from school district to
17 school district or student to student and that
18 the state would fund it in an appropriate
19 manner and a timely manner so it doesn't
20 become an undue encumbrance on that budgetary
21 reserve.
22 REPRESENTATIVE LEACH: Anyone else?
23 Okay.
24 And I thank you for your kind words.
25 I think I still hold the school record for
111
1 detention halls in a four-year period.
2 So the other thing, the other
3 question is in terms of -- this may be an
4 unfair question, but in terms of -- if we took
5 an average, the aggregate cost of cyber
6 charter schools in Pennsylvania and we figured
7 out it cost X number of millions of dollars
8 statewide per year now under the current
9 system, do we have a sense of what a fair
10 level of funding is, whether it was taken over
11 by the state or whether there was a new
12 formula, and would there be a dramatic
13 increase or decrease in cost, if anyone knows,
14 and the aggregate cost of cyber charter
15 education in the state?
16 In other words, are we paying too
17 much now? Are we paying the right amount, too
18 little? And would that change under a change
19 in the formula?
20 MR. FEINBERG: Let me take a shot at
21 this and then perhaps pass the microphone. I
22 believe in the 2004/2005 school year it was
23 about $74 million statewide.
24 And in terms of what the actual costs
25 are, it's my understanding that subsequent to
112
1 Secretary Zahorchak's appearance at the last
2 hearing that there have been auditors from the
3 state visiting 21st Century Cyber Charter
4 School for the specific purpose of determining
5 what it cost them in a school that has made
6 AYP in three consecutive years.
7 Perhaps later on in the hearing
8 you'll be able to hear what the status of that
9 is. I have not heard whether they've
10 concluded that investigation yet.
11 But the answer is we should know what
12 it cost them in that -- you know, in that
13 specific instance.
14 REPRESENTATIVE LEACH: Anybody else?
15 MR. ALLWEIN: I may be mistaken here,
16 and perhaps some of the folks coming after us
17 can answer this question, but I do believe
18 that the costing-out study that is due, the
19 report that is due in November, is going to
20 take a look at cyber school costs as well.
21 So that study may also shed some
22 light on what the actual cost should be just
23 as it will for -- for school districts.
24 REPRESENTATIVE LEACH: Thank you,
25 Mr. Chairman. I don't know who to hand this
113
1 to.
2 REPRESENTATIVE MCILVAINE SMITH:
3 Thank you. This question is for John
4 McKelligott.
5 I just wanted to ask specifically
6 about your Delaware County School District
7 cyber charter school tuition. You said it
8 went from $235,000 to up over a million.
9 Now, could you tell me how many
10 students each of those years represents that
11 went to separate charter schools?
12 MR. MCKELLIGOTT: Representative
13 Smith, I can give you that information. I'll
14 have to submit it later. I don't have it with
15 me today.
16 REPRESENTATIVE MCILVAINE SMITH:
17 That's fine. Thank you.
18 REPRESENTATIVE BEYER: I'm going
19 before you. I want Mike, let me just -- from
20 Montrose.
21 By the way, both of your school
22 districts, I think, very early on passed
23 resolutions in support of my legislation and I
24 am grateful for it.
25 And I wanted to know if you would
114
1 talk to me at some point about this idea of
2 record exchange, because I get that there's a
3 problem here.
4 Roberta, I wanted to talk to you
5 briefly about -- you brought up I thought was
6 a very important point. You know, let me skip
7 it and I'll think of it in a second.
8 Attorney Freund, I just wanted to ask
9 you and Mr. Allwein from PSBA, I don't know if
10 you're aware of this, the Governor's proposal,
11 or, that is, the Administration's proposal
12 something that we are currently negotiating
13 with them, or I am, and that is I wanted the
14 entire shift of funding for cyber charter
15 schools to go to the Department of Education.
16 Figuring that once a statewide tuition rate
17 was set, minus the 30 percent that they're
18 reimbursing school districts, let's say that's
19 just an average, they would be keeping that
20 money, and then whatever that number is
21 additionally, and, frankly, I understand where
22 the Department of Education is coming from
23 because they don't see a line item this large,
24 the ability to put a line item this large in
25 their budget.
115
1 So that means that more than likely
2 in a compromised bill we will still see school
3 districts paying for the student.
4 The question is, if we can get to a
5 statewide tuition rate, what that reduction in
6 costs might be.
7 Now, Tim, you know this, and Attorney
8 Freund, I'm sure you're aware of this. Can
9 you talk specifically or comment specifically
10 to me on this feature, because it looks as
11 though the entire shift of funding through the
12 Department of Ed is going to be an
13 impossibility. Kind of a non-starter.
14 MR. FREUND: I'll let Tim go first.
15 MR. ALLWEIN: Thank you. And I think
16 you're right. I think for a -- for a number
17 of reasons that it doesn't look like -- to no
18 one's surprise I might add -- that the
19 Administration has not warmed too much to the
20 idea of footing the entire bill for cyber
21 schools.
22 I don't think -- I -- I perceive my
23 members' goals on this as to make it fair, and
24 a number of people have talked to that.
25 And I think the key is, is to somehow
116
1 get a better correspondence, a better
2 relationship between the dollars that are
3 given to a cyber school, whether it's by the
4 state or by the school district, or in
5 combination, and what the cyber school costs
6 are.
7 Numerous commentators today have said
8 that there's no relationship between those two
9 numbers right now and everything is based on
10 what happens at this -- at the child's school
11 district of residence, not necessarily how
12 much the cyber school is paying to serve that
13 child.
14 So I think that's the key. The key
15 is to establish some kind of relationship,
16 some kind of -- of -- I don't want to use the
17 word cap, but there's got to be some kind of
18 relationship between the amount of funding and
19 what the cyber schools are paying. That's
20 the -- that's the key in our view.
21 MR. FREUND: Yeah. Representative
22 Beyer, I can't comment with any more insight
23 than Tim could with regard to the politics.
24 But let me just use your question as
25 an opportunity to reinforce my thought that
117
1 whatever ultimate funding formula is derived,
2 be derived on the basis of -- I'd prefer
3 regulation, but either that or statute, but
4 not simply on nonregulatory guidance by the
5 department.
6 One of the reasons why I am somewhat
7 skeptical of simply having a statutorily set
8 average single cost -- and, again, I'm not an
9 expert at this, but I did some academic work
10 when I was in college and -- and graduate
11 school in regulated industries, which have
12 essentially zero marginal costs, you know,
13 profiles. And if you think about it that's
14 very much like a cyber school.
15 What's the marginal cost of adding an
16 additional cyber student except in the context
17 of providing a laptop? Marginal cost may
18 equal only the cost of a laptop.
19 In that context -- well, it doesn't
20 cost that much to add one more person online.
21 You have the system. That's the idea that I'm
22 talking about. I'm talking about marginal
23 cost. Not all costs.
24 And the reason I make this point is
25 that average cost may be not be the best
118
1 solution here and the regulatory hearing
2 process will give the opportunity for experts
3 in pricing to have their input so that the
4 department could make the most efficacious
5 formula for everyone involved.
6 REPRESENTATIVE BEYER: Thank you very
7 much. Roberta, I did thank you.
8 But in your comments it occurred to
9 me this idea of -- actually both of you. This
10 idea that the local school districts are
11 paying for these students with absolutely no
12 monitoring, no ability to know how they're
13 doing.
14 So do you -- do either of you have a
15 recommendation on whether or not there should
16 be an annual and/or every six months' or every
17 three months' report back to the school
18 district about the status of that student and
19 how they're performing academically from the
20 cyber charter?
21 MS. MARCUS: I think that would be
22 better said by a superintendent, if you don't
23 mind.
24 REPRESENTATIVE BEYER: Thank you.
25 MR. ESTEP: I think I can speak for
119
1 Mike. I think most superintendents, I'm sure
2 we'd love that, but I'm not sure that's
3 feasible under FERPA.
4 REPRESENTATIVE BEYER: Thank you.
5 Thank you, Mr. Chairman.
6 REPRESENTATIVE FLECK: Thank you.
7 For me it comes down to, once again, as I said
8 at the hearing in Pittsburgh, accountability.
9 Having served on the school board for
10 five years, which are very accountable,
11 whether it's at a gas station the next day
12 after a school board meeting or what-have-you
13 and deciding whether or not we could stop in
14 our own towns to buy gas, depending on how the
15 media smiled.
16 With that said, I -- I believe
17 strongly in public education. However, it may
18 not be the best choice for everyone and I
19 understand that.
20 And I'll address my question to
21 Mr. Feinberg. You had addressed
22 accountability. What -- could you expand on
23 some of your ideas in regard to that?
24 MR. FEINBERG: Sure. I guess a
25 couple of things. First off, if you look at
120
1 the fund balance situation, I can tell you
2 that, you know, our district has always been
3 within the guidelines in terms of the amount
4 of money that's in our fund balance.
5 But pretty much year in and year out
6 there will be a couple of folks who will come
7 to our public -- our public meetings which are
8 televised and which are attended by at least a
9 couple of local newspaper reporters and
10 they'll raise their hands and say, why do you
11 have X million dollars of our money sitting in
12 a fund balance and you're still proposing to
13 raise our taxes.
14 We're asked that question when we
15 have fund balances that are in line with the
16 state regulations.
17 And if you contrast that with the
18 present situation for charter schools, there's
19 nobody to ask that question. There's no
20 public forum and there's no public
21 discussion.
22 In terms of spending a large sum of
23 money, hypothetically, if my district, my
24 school board wanted to discuss spending $10
25 million on -- on some kind of a project,
121
1 again, there would be a public discussion by
2 the board. There would be coverage from the
3 newspapers. It's a televised meeting. There
4 would be input from our solicitor.
5 If we -- if we decided that it was in
6 the best interests of the district to proceed
7 with the project, the proposed project, if it
8 were a building project, we'd then have to go
9 to public hearings with the township zoning
10 board, the township planning committee.
11 All of those things would happen in
12 the public arena with plenty of press coverage
13 and plenty of public comment, and it would all
14 take place in the crucible, if you will, of
15 local politics, which I think you're all too
16 familiar with local elections, local elected
17 officials, when you are going through that
18 process, any time you're going to spend large
19 amounts of money people are going to ask a lot
20 of questions.
21 And what's happened here is, you
22 know, if we -- we find out that $10 million of
23 property tax money was spent on, you know,
24 what may be a wonderful facility. I looked on
25 the web site. It looks great. Love to visit
122
1 some time.
2 But, you know, should -- should
3 taxpayers from all over the rest of the state
4 have to foot that kind of bill having no input
5 in the process?
6 We talked about public
7 accountability -- being accountable to the
8 public and that whole piece is missing when we
9 take a -- a school entity and spread it
10 statewide.
11 REPRESENTATIVE FLECK: Okay.
12 CHAIRMAN ROEBUCK: We have one more
13 question.
14 REPRESENTATIVE MILNE: Thank you,
15 Mr. Chairman.
16 I'd just like to return to one of the
17 themes we've heard quite a bit about so far
18 and that's the special education obligation of
19 schools in general. And perhaps we could get
20 a little bit of an amplification about the
21 impact that you all feel happens in your
22 school districts because of accommodating
23 special education needs.
24 And also just raise the context that
25 this is a matter that the state has to deal
123
1 with on a large scale because both traditional
2 brick and mortar schools and cyber charter
3 schools do feel the constraints of trying to
4 deal with special education funding.
5 I'm just wondering how it fits into
6 your perception -- perception of how much of a
7 burden it is on the budgets to deal with
8 special education students and what maybe
9 perhaps the role of the state can be to try to
10 ease some of that burden.
11 MR. ESTEP: Are you speaking purely
12 in reference to cyber charter or charter or
13 are you just speaking about special education
14 cost in the general?
15 REPRESENTATIVE MILNE: I for the
16 moment am speaking specifically to cyber
17 charter schools as it relates to what you have
18 to do from your perspective as managers of
19 your public school districts.
20 MR. ESTEP: The examples I provided
21 in my talking points, you know, the $16,000
22 rate for special needs students in the charter
23 school, when compared to what we're outlaying
24 as a district for -- on average, I -- I
25 believe we're somewhere around -- I don't have
124
1 the figure with me -- but somewhere around
2 $10,000 for a special education student.
3 I'm not sure if I'm following.
4 REPRESENTATIVE MILNE: How much would
5 it help the situation if the state were to
6 assume the special education costs of the
7 cyber school students and take that out of
8 traditional brick and mortar schools?
9 MR. ESTEP: Any assumption of
10 responsibility for financing is going to be
11 more than welcome. It's going to be a
12 positive to the school systems that are paying
13 out at the rates we're currently paying out.
14 At least speaking for Mount Union.
15 MR. OGNOSKY: I would -- I would
16 absolutely agree with that.
17 MR. MCKELLIGOTT: Representative, I
18 would suggest that that would not be a
19 significant impact, at least as far as the
20 experience in the William Penn School District
21 is concerned.
22 We find in general that our special
23 education students largely stay with us. They
24 are not greatly invested in the cyber
25 schooling and it would not materially affect
125
1 the impact that our taxpayers feel from this.
2 MR. ESTEP: I can add one more
3 thing. This is just a general trend that I've
4 seen.
5 Very often, our special needs
6 students who vacate Mount Union to go to a
7 particular cyber charter, this will concur
8 with the gentleman to my left, often are our
9 what's referred to as ES students, and the
10 cost to educate our ES students is obviously
11 less than it might cost us to educate, for
12 instance, life skills.
13 So from that standpoint, I -- I
14 concur with him. Although like I said, any
15 kind of assistance would be appreciated.
16 MR. FREUND: If I could just make a
17 comment from the point of view of potential
18 liability. It's hard to quantify what that
19 means until you get hit with a judgment.
20 But from the point of view of
21 potential liability for the school districts,
22 what I've seen in my practice, and I mentioned
23 this in my testimony, is that essentially the
24 cyber school -- charter schools in general and
25 cyber schools in particular are really
126
1 understaffed with -- with special expertise to
2 identify and accommodate these kids and what
3 happens is that they bounce -- they bounce
4 back -- they bounce back to the schools who
5 then pick up additional and really unnecessary
6 special ed liability for competent or future
7 program. That's what we've experienced.
8 MR. FEINBERG: I'd just like to speak
9 to leveling the playing field. As the regular
10 school districts have not had, you know,
11 excess cost funding for special education on a
12 per student basis at least since 1992.
13 So, you know, we're in a situation in
14 my district, for instance, where we need to
15 use 16 percent as a -- you know, as a -- to
16 calculate this cost because that's what the
17 state figures the average is. But we have
18 almost twice that special ed population.
19 So, you know, we'd like to get the --
20 the per student excess cost dollars, too.
21 MS. MARCUS: Just to bring some
22 closure, the one issue that I would want to
23 address regarding that area would be in terms
24 of the IEP that falls on the steps of the
25 public school system to support that student
127
1 as a special ed student, although the local
2 school district or the sending school
3 district, the way the child would otherwise be
4 enrolled, does not have any control on
5 determining whether or not that student should
6 require an IEP.
7 REPRESENTATIVE MILNE: Thank you very
8 much.
9 CHAIRMAN ROEBUCK: Thank you.
10 Let me do a couple of things here.
11 First, we've been joined by another
12 representative. I'd ask he introduce himself,
13 and he does want to ask a quick question.
14 REPRESENTATIVE PALLONE:
15 Representative John Pallone. Thank you.
16 Thank you, Mr. Chairman, and I'll waive my
17 questions. She sort of addressed it with the
18 IEP. I had a question about that.
19 My name is John Pallone. I represent
20 seven school districts in northern
21 Westmoreland County and southern Armstrong
22 County. Thank you.
23 CHAIRMAN ROEBUCK: Thank you. The
24 second thing I wanted to note is I don't know
25 if our reporter needs a time to break or we --
128
1 she needs a time to break. So why don't we
2 have a three-minute break, three minutes.
3 And we'll also note that I am going
4 to pass the chairing of the meeting to
5 Representative McIlvaine Smith. She will be
6 chairing in my stead hereafter.
7 (A short recess was taken.)
8 REPRESENTATIVE MCILVAINE SMITH: I'll
9 call everybody back to their seats, please.
10 We're ready to proceed with the hearing
11 today.
12 Can I have the panel? If I could
13 have everyone take their seats, I'd like to
14 start the hearing again, please. Yeah. Yes.
15 Could I have the panel up?
16 Could I have the next panel, Sharon
17 Williams from the Agora Cyber Charter School,
18 please. This is not a pep rally, remember?
19 Sophia Lewis, cyber school family; Jose
20 Parrilla, chief financial officer from PA
21 Virtual Charter School; Jon Marsh, CEO of 21st
22 Cyber Charter School; and Dennis Tulli, CEO of
23 Commonwealth Connections Academy. If you'll
24 come up, we will get started once again.
25 Thank you.
129
1 Could we have quiet, please.
2 MS. WILLIAMS: Good afternoon. As
3 you just stated, I'm Sharon Williams. I'm the
4 head of the Agora Cyber Charter School.
5 I'm honored to be here, and I'm -- I
6 am a little disappointed that our panel is
7 kind of going down. Specifically those that
8 are -- that are proposing these bills, but I'm
9 going to move forward and try to answer as
10 many things as possible.
11 As I said, I'm honored to be here
12 today. I'm honored to be a part of the
13 Pennsylvania public school system, and today
14 I'm honored to represent --
15 UNIDENTIFIED WOMAN: Sorry.
16 MS. WILLIAMS: That can't be an
17 omen.
18 -- cyber school teachers, parents,
19 and specifically, and most importantly, our
20 students. That's why we're all here. And I
21 do thank Mr. Ognosky who stated that fact as
22 well.
23 I think there are many things that we
24 all share. We share many challenges and I'd
25 like to outline just a few things.
130
1 I too am a proud public school
2 product. I -- I grew up in Hatford Township
3 and you guys can be the judge on how I turned
4 out.
5 But I think that the things we're
6 doing in Pennsylvania are good, and they
7 continue to be very good, and I think that
8 this state should be very proud of that.
9 As an educator, we are here to serve
10 one mission, I believe, and, again, we share
11 this together. We all want to see our
12 students thrive. We want to see them soar.
13 We want them to go to the heights greater than
14 any heights possible.
15 We want them to be prepared to do
16 whatever it is they want with no limit to
17 their potential. That's why we're all here.
18 As a young educator, my first school
19 across a stage very similar to this, it said
20 all children can learn. Believe it or not, as
21 an educator moving close to my 20th year, I
22 still believe that. It's an ideal, but I
23 still believe it. And I think this state
24 helps that because we have so many choices.
25 All the research shows that children
131
1 learn ever so differently. If you have
2 children yourselves, none of our children are
3 the same. I wonder where my two came from
4 sometimes.
5 So, again, I want to applaud
6 Pennsylvania for recognizing that our children
7 and their parents need options.
8 I want to thank our lawmakers for
9 pushing forward with Act 22 where the intent
10 is to serve students, improve and increase
11 their learning, using different and innovative
12 teaching methods, providing professional
13 opportunities for our state's outstanding
14 teachers, and expand the educational
15 opportunities within our public school
16 system.
17 Charters were never designed to mimic
18 the local brick and mortars, and I think
19 that's a point that we all need to understand
20 and embrace.
21 This great legislation also requires
22 accountability. Something that we take very
23 seriously at our cyber charters, and I'm sure
24 my cyber colleagues take it seriously as
25 well.
132
1 We are held accountable for meeting
2 measurable goals and we are to report on those
3 goals annually.
4 Cyber charters continue to exist for
5 one reason and one reason only. There is a
6 demand. Students are excelling because if
7 they were not families have the choice to
8 leave and they do.
9 Please know that parents that come to
10 cybers come to us sometimes out of sheer
11 desperation. Sometimes there's no other
12 choice and thank goodness these parents refuse
13 to leave their children behind.
14 I have listed for you in my
15 testimony, which I know was really, really
16 long, so I did summarize, some of the types of
17 students that we serve, but our students are a
18 microcosm of every district and we, like many
19 districts, have a lot to celebrate across
20 cybers.
21 Our 11 cyber charter schools met 90
22 percent of the AYP academic performance target
23 in 2006 and 2007, and I want to personally
24 congratulate our 21st Century Cyber Charter
25 School and our two largest cybers, PA Cyber
133
1 and PAVCS for meeting all targets.
2 And I hope that everyone understands
3 what this really means. We receive all kinds
4 of students, and I don't think anyone has
5 asked that question during this testimony.
6 Why are they leaving districts? Who are these
7 children?
8 They're behind us and I'm sure every
9 single one of them has a reason for us, but
10 let me give you a snippet of some of the
11 children we received.
12 Some are gifted and talented or
13 advanced.
14 Some have learning disabilities. And
15 I want to take a moment to stop, because we
16 have addressed special education slightly.
17 We must serve them. We do not have a
18 choice. These students sometimes require
19 related services, OT and PT, and we must serve
20 them. It does cost us money.
21 We have students who reside in unsafe
22 districts. They reside in districts where the
23 classrooms are overcrowded or in rural
24 districts where just frankly they do not have
25 the courses that our children are seeking or
134
1 need.
2 We have students with severe
3 illnesses. We have average students who have
4 just never reached their potential because
5 they're just that average and they're sitting
6 in large classrooms. We have students with
7 extreme talents, athletes, musicians, actors.
8 And we have students with unique
9 learning styles where boundaries are removed
10 by schooling in a cyber charter school.
11 At Agora, you will note at the chart
12 at the end of my testimony, but let me
13 highlight for you, 65 percent come straight
14 from public schools, including charter
15 schools.
16 50.6 percent of our population is
17 economically disadvantaged. 39 percent of our
18 students come from districts that just simply
19 did not make AYP.
20 We have a challenge in front of us
21 when our students hit our doors.
22 I take the time to illustrate this
23 description for you because it's important to
24 remember why we are all here. I know we all
25 have the same challenges. I share probably
135
1 the same ones as our friends that testified
2 before us, but we are all charged to serve our
3 students, and I don't want anyone to lose that
4 because we all take that very seriously.
5 So finally let's talk about the
6 money, and I'm going to give you a high level
7 and I'm sure that my colleagues are going to
8 go to the specifics because that's what they
9 deal with day in and day out.
10 I'm going to agree that cybers are
11 not that expensive. We receive approximately,
12 as you know, 75 percent of the per-pupil
13 funding of a student's district of residence.
14 We already operate with less than
15 traditional schools. I do want to say that in
16 2007 and 2008 school districts will receive,
17 as was stated, they receive it a year later,
18 the 30 percent of the prior year's
19 expenditures back as an additional
20 reimbursement. But they are not charged to
21 educate that student.
22 In fact, three districts will receive
23 32.45 percent resulting in an additional $11.8
24 million for the School District of
25 Philadelphia.
136
1 And I'm going to say that's okay with
2 me. But please don't make us do it for less
3 than we are already receiving.
4 In fact, the research shows from
5 Augenblick, Palacih and Associates that the
6 operating costs of online programs are about
7 the same as the cost of operating brick and
8 mortar schools. This is the same research
9 firm that is doing the costing-out study for
10 the Department of Education.
11 Frankly, we're charged with being
12 more efficient and we are. We are fiscally
13 responsible. At Agora we direct -- directly
14 dedicate -- I'm sorry -- 82.1 percent of our
15 money to the students and instruction.
16 You can see the chart included in my
17 testimony and the details in the information
18 that I provided. But since we have less, we
19 decided to focus where it is most -- is most
20 important and that is on our students.
21 Of course, I've listed for you where
22 does the money go? It goes to certified,
23 highly qualified teachers with background
24 checks.
25 It goes to a challenging curriculum
137
1 that is mapped to the Pennsylvania content
2 standards. We provide students with all the
3 books and supplies. And I've been to some of
4 the legislators' offices dragging a suitcase,
5 just one. The zipper has now broken because
6 of all the stuff that I tried to pack inside.
7 But we have to send sand. We have to
8 send paint. We have to send classical novels
9 and books so our students can have the same
10 opportunities that every student across the
11 state has. We also must provide a computer,
12 printer and Internet reimbursement.
13 But I think, most importantly, I just
14 want to highlight that it is a quality
15 education that we are seeking.
16 MS. TERECH: Three minutes.
17 MS. WILLIAMS: Let's talk quickly. I
18 can adjust to this. I have flexibility.
19 According to Pennsylvania law, I'd
20 like to just close with financing and cost. I
21 would like to quickly summarize two points
22 about fund balances and the recommendation by
23 the Secretary to have a single tuition rate.
24 According to Pennsylvania law, public
25 cyber schools are to be paid monthly by school
138
1 districts. I'm not going to beat a dead horse
2 but we're not paid on time. Therefore, we
3 need that money.
4 As of our opening day, September 4th,
5 Agora Cyber Charter School is still waiting
6 for $2.4 million. I did not have a fund
7 balance this year.
8 I recognize I'm a new school, and I
9 know that for the future I will have to build
10 and maintain a reserve to guarantee that I
11 would be able to pay my teachers and staff
12 but, most importantly, not interrupt a quality
13 education for all of our students.
14 Finally, on the recommendation of the
15 single tuition rate, I respectfully disagree
16 as it would again cut our funding and impact
17 the quality program that we are building.
18 If you can see the trend and what I'm
19 trying to say is we do believe in quality and
20 we believe in accountability as well.
21 In closing, I think you should be
22 proud of Pennsylvania's educational system.
23 You should be proud of the innovative ways
24 that we are educating our students. We
25 embrace choices and I have to tell you for
139
1 many of our students it just isn't a choice,
2 it's their solution, and I think we need to
3 remember that.
4 I'd like to also say that I have -- I
5 have opened up Agora to all of you. I'm sure
6 that any parent, student, teacher behind me
7 would also do the same.
8 Come and see what we do. I believe
9 that we do have a lot to figure out and we all
10 need to be a part of the solution.
11 Thank you.
12 REPRESENTATIVE MCILVAINE SMITH:
13 Please, this a hearing. Please refrain from
14 applause. Thank you.
15 MS. SOPHIA LEWIS: Good afternoon,
16 Honorable James Roebuck and committee. I
17 would like to thank the Honorable James R.
18 Roebuck, Jr., and esteemed members of the
19 Pennsylvania House of Representative Education
20 Committee for this opportunity to share with
21 you how enrolling in the Pennsylvania Virtual
22 Charter School had a profound and lasting
23 effect on my children.
24 My name is Sophia Lewis and I come
25 before you as a respected community member,
140
1 taxpayer, and, most of all, as a single mother
2 concerned about the education options
3 available to my children.
4 And I'm going to keep in mind with
5 Representative Smith that this is not a rally,
6 but behind me I brought with me my two
7 children, David and Kyra, and my mother
8 Amelia.
9 Kyra is a sixth grader and David is a
10 tenth grader who are with me today, and also
11 along I brought my godmother, Maria Goldston,
12 who both assist me with some of their
13 lessons.
14 I want to share with the members of
15 the education committee the many reasons why I
16 have chosen this alternative educational
17 choice.
18 The first reason was because I value
19 reputable education. My parents, they
20 provided me and my sibling with the best of
21 education when I was a child and that same
22 emphasis -- emphasis ignited into my
23 bloodstream with my children.
24 I attended the Philadelphia public
25 schools, but there are huge differences
141
1 between my experience and my children's
2 educational opportunities.
3 I did not have to -- to succumb to
4 the constant issues with traditional -- which
5 traditional schooling places upon students
6 today such as having to maintain focus in
7 class while their surrounding peers were
8 behaving irrationally or being policed through
9 a metal detector upon entering school
10 grounds.
11 These kinds of conditions don't
12 belong in the educational environment. This
13 kind of security is exhibited in correctional
14 institutions, not in our children's school
15 buildings.
16 My second reason for -- for choosing
17 a home-based public education was due to
18 change in my own financial circumstances. My
19 children attended private Christian schooling
20 before enrolling into cyber schooling.
21 I sacrificed a lot in order to
22 maintain costly tuition for my children to
23 gain quality education. So much was given up
24 and many laboring hours went towards
25 maintaining the expensive monthly payments,
142
1 but then I experienced failing health due to
2 my diagnosis of fibromyalgia.
3 Living on disability income made the
4 tuition fees at the Christian schools
5 unmanageable and, as a result, I looked to the
6 public school system for my son's junior high
7 education.
8 Moving to a public school proved to
9 be one of the worst decisions I ever made. My
10 son encountered many unacceptable dilemmas.
11 David is a shy young man, and he was taunted
12 and threatened daily by other students.
13 The other kids in school quickly
14 recognized he was smart and that he enjoyed
15 school so they were determined to make his
16 school days intolerable. They would try to
17 intimidate him or make constant disturbances
18 during class time.
19 I soon began to realize some unusual
20 behavior in David, and I knew for certain that
21 I had to find an alternative -- an
22 alternative, even though I could no longer
23 afford private education.
24 Despite the physical pain caused by
25 my illness, I began to heavily research the
143
1 requirements of home schooling because I felt
2 my disabilities would only become worse if I
3 couldn't find a solution to this matter.
4 I decided to home school David, but
5 that proved too difficult as I quickly found I
6 needed support with David's education.
7 Then something much greater than I
8 ever imagined happened. At a meeting of a
9 home school group the subject turned to cyber
10 schooling.
11 It sounded like the answer I needed.
12 Doors of opportunities had been flung wide
13 open.
14 In my failed attempt at home
15 schooling, I was solely responsible for
16 keeping up with the -- keeping up with the
17 requirements of David's education and
18 maintaining portfolios of work to hand into my
19 local school district.
20 The delight of having real teachers
21 and an entire staff brought those once
22 terrifying educational decisions to a halt.
23 Cyber schooling made a positive change for my
24 family.
25 I am pleased to announce that cyber
144
1 schooling changed my family's life. My
2 children's future was heading in the right
3 direction. A burden was removed mentally.
4 It now seems so obvious. I wanted a
5 better quality of education so I turned to an
6 innovative educational approach.
7 The Pennsylvania Virtual Charter
8 School has a profound program with educational
9 tools supplied through the K12 Incorporation
10 curriculum.
11 The students may not ride the bus,
12 walk into a building and write on the
13 traditional blackboard, but they use
14 technology to find their lessons, talk to
15 teachers, and work out problems on the online
16 classroom white board.
17 The results have exceeded my
18 expectations. PAVCS puts premium education
19 first and they have a genuine support team
20 which eagerly awaits to assist my kind of
21 concerns that I may encounter.
22 I talk to David and Kyra's teachers
23 every week and take on an active role in their
24 education. I've even recruited my mother to
25 help with some of the work load.
145
1 In the three years my children have
2 been enrolled, they have become more
3 knowledgeable in technology and each of them
4 have soared tremendously in the area of
5 confidence.
6 PAVCS has positively impacted the
7 lives of my learning students. The school's
8 innovative approach of teaching the
9 children -- children encourages them to
10 challenge their academic capabilities.
11 David is like a new person. Where in
12 the past he was shy and reserved and kept to
13 himself, he -- he now rises to every occasion
14 to take leadership and looks you in the eye
15 when he speaks.
16 The educational field trips are just
17 one of the many ways he has flourished due to
18 the conformity of the surrounding students
19 with equally strong character who value real
20 friendship.
21 Kyra takes delight in all of her
22 subjects. She loves confronting curriculum
23 which pushes her to ascend above the norm.
24 She too has gained great friends and -- great
25 friends close and at distance.
146
1 She has an e-pal from another state
2 that she remains very good friends with. They
3 constantly address the school's subjects and
4 encourage one another whenever a lack of
5 confidence attempts to settle in either one of
6 them.
7 The concept of the school being an
8 innovative educational tool is certainly
9 appreciated and valued in the Lewis
10 household. We highly recommend PAVCS. In
11 fact, without this fabulous school and its
12 dedicated staff we would not have been able to
13 accomplish the goals we have reached or plan
14 to attain.
15 Kyra says she wants to become a
16 doctor and David, he has his sights set on
17 being a lawyer.
18 PAVCS is extremely significant in my
19 children's lives simply because they put
20 people first and they strive to accommodate
21 each student towards reaching their
22 potential.
23 We would be lost without the kind --
24 without this kind of alternative choice of
25 education.
147
1 Thank you.
2 REPRESENTATIVE MCILVAINE SMITH:
3 Thank you. And could the other presenters
4 please try to summarize the remarks because we
5 do have them written in front of us. So just
6 hit the high points. That would be most
7 appreciated. Thank you.
8 MR. PARRILLA: My name is Jose
9 Parrilla. I'm the chief financial officer of
10 the Pennsylvania Virtual Charter School.
11 I'd like to thank Chairman Roebuck
12 and the honorable committee members for
13 allowing me the opportunity to appear before
14 you today.
15 I will try the best that I can to
16 summarize the points that I've made. You have
17 my testimony, my testimony in front of you.
18 My testimony basically boils down to
19 two issues, accountability and funding, which
20 is obviously what we're talking about here.
21 And I'll begin by saying that Act 88,
22 Section 1742-A stipulates that the Department
23 of Education shall annually assess whether
24 each cyber charter school is meeting the goals
25 of its charter.
148
1 It seems to me that the Department of
2 Education has its mandate with regard to
3 accountability for cyber charter schools.
4 To that end, the department has
5 instituted the Pennsylvania System of Cyber
6 Charter Review, also known by its acronym
7 PASCCR, and that's attached to my exhibit --
8 to my testimony as Exhibit A.
9 There are 25 pages here of
10 accountability that cyber charter schools have
11 to contend with.
12 With regard to accountability by the
13 school board, some of the previous people on
14 the testimony were wondering about
15 accountability by the cyber charter school
16 boards, and I'll cite Title 24, Pennsylvania
17 Statute 17-1716-A. That is the powers of the
18 board of the trustees for a cyber charter
19 school.
20 And I'll just go on to Paragraph C of
21 that that says, and I quote: The board of
22 trustees shall comply with the act of July
23 3rd, 1986, known as the Sunshine Act.
24 So we are required, just like public
25 school -- public districts to conduct public
149
1 meetings, to post those meetings, and to
2 ensure that we have the public's view in
3 mind.
4 With regard to financial
5 accountability for -- from the cyber charter
6 schools, we comply with most PDE financial
7 reporting requirements. Attached to this
8 testimony again is Exhibit B, and that's a
9 list of the reports that we have to provide
10 the Department of Education.
11 The budget, as one of the previous
12 testimonials said that they have to provide a
13 budget, it's PDE 2028. We have the same
14 requirement.
15 We have to comply with child
16 accounting database requirements and this is
17 PDE 4059, which is the instructional time
18 summary; PDE 4062, which is the annual
19 attendance and membership reports, PDE 4002,
20 which is a summary report of aggregate days
21 membership, and we also have to provide NCLB
22 attendance and membership reporting. Some of
23 the same things that school districts have to
24 do.
25 We are required by PA school code to
150
1 have an annual audit every year. And that
2 audit is submitted to the Federal Bureau of
3 Census and State Bureau of Audits.
4 We have to comply with single audits
5 of Federal Assistance Programs for we have for
6 federal programs, and this audit is submitted
7 as part of the annual report that is due to
8 PDE on August 1st.
9 We also have the annual financial
10 report, which is PDE 2057, and that is due on
11 October 1st.
12 And then, of course, we have to
13 provide school districts with a form entitled
14 charter school enrollment notification form,
15 which is the form that alerts the school
16 district that students in their residence,
17 their district have now enrolled with the
18 cyber school.
19 Now I'll move on to something that
20 has been mentioned here before and that is the
21 payment to cyber schools.
22 Cyber schools have a hard way to go
23 as it relates to collecting revenues from
24 school districts.
25 And -- and because we don't get paid
151
1 on a timely basis by a lot of school
2 districts, as required by Act 22, Section
3 1725-A, Paragraph (5), when a cyber school
4 requests the department withhold a school
5 district's subsidies, due to nonpayment, the
6 department ensures it has a charter school
7 enrollment notification form on file for every
8 student on a cyber school invoice, meaning
9 that a school district -- or a cyber school --
10 I'm sorry -- that requests subsidies be
11 withheld from a school district by PDE will
12 not get paid for a student unless that student
13 is properly registered with the department and
14 only if the department has a charter school
15 enrollment notification form will any payment
16 be made.
17 I'd be remiss if I did not explain
18 how PDE ensures that cyber charter schools
19 comply with its many reporting requirements.
20 One of the tools it uses is refusing
21 to pay subsidy payments, subsidy payment
22 redirects to cyber charter schools.
23 So if they don't get compliance from
24 us, they simply won't pay us and then we're
25 really in trouble because a lot of school
152
1 districts don't pay us either. So we try as
2 best as we can to meet every mandate that is
3 given to us by the Department of Education.
4 I will later explain how PDE got in
5 the business of redirecting school district
6 subsidies to cyber charter schools. But a
7 second enforcement tool is Title 24,
8 Pennsylvania Statute 25-2552.1.
9 This statute allows the department to
10 sanction cyber charters $300 per day for not
11 submitting a timely budget, an annual
12 financial report, or pupil membership/child
13 accounting report.
14 Exhibit D, attached as testimony,
15 explains the sanctions of Title 24,
16 Pennsylvania Statute 25-2552.1.
17 Now, Act 22 as amended, or -- as
18 amended, sets forth process and protocol for
19 education funding for charter schools and
20 cyber charters.
21 The law says that for nonspecial
22 education students -- and that statute
23 explains exactly how funding for cyber schools
24 works. It's in my testimony. I am not going
25 to read it, but I'll summarize by saying that
153
1 Act 22 and Act 88 provide a funding formula
2 that proscribes that a charter school, cyber
3 or otherwise, get an amount less than the full
4 budgeted expenditure for nonspecial education
5 students.
6 Some of the panelists earlier would
7 have you think that it is the entire budgeted
8 amount that they have to use in order to
9 calculate the tuition payment for a cyber
10 student, and that is not true.
11 They are allowed some deductions from
12 their expenditures before they calculate that
13 tuition that goes ultimately to or follows
14 ultimately that student to the cyber charter
15 school.
16 Act 88 and Act 22 also provides for a
17 reimbursement of up to 30 percent to school
18 districts for resident students who choose to
19 enroll in a charter school.
20 Although the law provides for funding
21 to go to cyber charter schools, most school
22 districts argue that cyber schools should not
23 be paid based on the school district's cost to
24 educate their students.
25 Exhibit E, provided with this
154
1 testimony, demonstrates the budgeted cost for
2 a selected number of school districts.
3 And I'd like, if I could take a
4 moment, to direct you to Exhibit E. What I
5 did is I looked at the school districts for
6 members of this panel who testified here
7 today, and there are eight of them listed, and
8 it shows -- it shows the budgeted expenditures
9 for every one of these school districts, how
10 much is deducted from those expenditures, and
11 then it gives you a selected expenditure total
12 which is the amount that is then used to
13 calculate the tuition for cyber students.
14 And in every case in the eight of
15 these samples, the school district gets to
16 withhold between 23 percent and 34 percent of
17 their budgeted expenditures for costs like
18 special education, financing transportation,
19 and other deductions.
20 So another way to put this is that
21 cyber charter schools get 70 to 80 percent of
22 the expenditures from a school district.
23 And, by the way, if you look at my --
24 my -- my worksheet here, to the very right, it
25 gives a -- a status of whether these school
155
1 districts pay us or not.
2 Of the eight school districts that
3 are listed here, five do not pay us. In other
4 words, we have to request information for
5 payment from PDE in order to be paid. In
6 order to remain viable, five out of eight
7 payments have to come from PDE.
8 So as it relates to requesting
9 subsidy redirects from PDE, the cyber school
10 bears the burden of proving that student is
11 enrolled in the cyber school. This is done by
12 providing both the school district and PDE a
13 copy of the student's charter school
14 enrollment notification form.
15 Without the form the cyber school
16 does not get paid.
17 In addition to the charter school
18 enrollment notification form, the cyber school
19 must also provide a signed IEP cover page for
20 special education students. Without that we
21 won't get paid either.
22 And then, lastly, PDE refuses to pay
23 for any enrolled cyber school student who is
24 enrolled less than six calendar days, even
25 though that student was enrolled, assigned a
156
1 teacher, and all other materials ordered.
2 In other words, we incur the costs
3 and this is a choice monitor. The students
4 assigned, they're going to go somewhere else.
5 We are -- we still have to bear the costs.
6 Just like the school districts do. They have
7 to manage their costs. We have the same need
8 to manage our costs.
9 So in closing, I think I have
10 demonstrated that cyber schools are just as
11 accountable as school districts and
12 bricks-and-mortar charter schools.
13 Also demonstrated was the fact that
14 cyber school students get less funding than
15 their public school district counterparts
16 already.
17 I predict that any -- if any of the
18 bills in circulation targeting a reduction in
19 funding for charter schools get passed, cyber
20 schools will be hard pressed to provide free
21 and appropriate education to their students
22 and ultimately cause some cyber charter
23 schools to close.
24 Thank you.
25 REPRESENTATIVE MCILVAINE SMITH: Jon
157
1 Marsh is next.
2 MR. MARSH: I'm from Minnesota, so I
3 don't think speed will be a problem. We talk
4 kind of fast there.
5 My name is Jon Marsh. I am the CEO
6 of 21st Century Cyber Charter School. I've
7 been part of the charter school movement since
8 1993 and been part of the opening of charter
9 schools, over 2,000 (sic) charter schools.
10 I'm in a difficult situation when I
11 come to these hearings because I'm asked to
12 testify on both sides.
13 Let me explain. My school, 21st
14 Century Cyber School, was formed in 2001 as a
15 partnership between four intermediate unit
16 districts, Chester, Montgomery, Delaware, and
17 Bucks Counties, and the 63 superintendents
18 over those area.
19 On my board are four executive
20 directors of intermediate units and eight
21 superintendents, along with one parent.
22 My school is also a charter school,
23 so you can likely understand my situation
24 here.
25 Let's talk about my school. We're a
158
1 small cyber charter school. We have 516
2 students 6th through 12th grade. We are
3 located in Downingtown, Pennsylvania, in
4 Chester County, and also located in the
5 Chester County intermediate unit.
6 100 percent of my teachers are
7 Pennsylvania certified. By the way, the
8 Auditor General's Office is at my school
9 still. They're checking all this stuff out.
10 My staff has gone through the child
11 abuse clearance, the criminal background
12 checks, the FBI fingerprinting, and all staff
13 are members of PSERS.
14 By the way, I believe all the cyber
15 schools are done that way. So I don't think
16 that's anything special. But it's out there.
17 Four years ago, 21st Century Cyber
18 Charter School made AYP -- missed AYP because
19 one student did not show up to his testing
20 site in the western part of the Commonwealth,
21 missing the 95 percent participation number.
22 Since then we have made AYP every
23 year. By the way, 33.7 percent of my students
24 reside in school districts that cannot make
25 that same statement.
159
1 Let me say again. Over a third of
2 the kids came from school districts that
3 aren't able to say that they had the same
4 results.
5 As the school used by Dr. Zahorchak
6 to calculate the $6881 figure quoted in his
7 presentation -- by the way, the media reported
8 $5850. His written testimony is the 6881
9 number and that is our figure.
10 So that -- let me explain where that
11 figure came from. That was for the school
12 year 2005/2006. We wrote two charters that
13 year. One was the original cyber charter --
14 charter that had been written. The second one
15 was the PDE's new format.
16 And you'd think a wise man would hire
17 staff and some resources to take on such a
18 project. But that's not the case. It's just
19 the opposite.
20 In fact, administrative and clerical
21 positions went unfilled that year because I,
22 and my team, were focused on writing the
23 charter. Doesn't seem like a big deal, but,
24 remember, I'm a very small charter school and
25 every FTE counts.
160
1 The following year we spent $7,779
2 per student. Now, do I think that number is
3 enough to operate by for myself and for
4 everybody else? I don't know.
5 That year we didn't push innovation
6 as much as I would have liked to, and I think
7 my staff and a lot of people on my team worked
8 way too many hours to be good for the health.
9 I also don't own a building. I rent
10 one. I have a great landlord. But if I was a
11 large cyber school, I would look at building
12 ownership. I can't speak to that. I can't --
13 can't comment on that.
14 I did the calculations using the
15 $5,000 number that was originally in House
16 Bill 446, which I realize has been changed
17 now, but that number would have saved William
18 Penn School District $9,500 and some change.
19 It would have cost, or I would have
20 received, $1.39 million less, 25 percent
21 less. I cannot operate for that figure.
22 There's no way I can do it.
23 So, now, let's talk about the
24 information that was distributed this summer.
25 As you can see, 21st Century Cyber Charter
161
1 School had a fund balance 997 -- almost a
2 million dollars. The actual number was
3 895,000, according to the PDE website.
4 We added 400,000 last year or about
5 470,000-plus last year. But we also purchased
6 furniture, hardware, developed curriculum, out
7 of the very same funds.
8 Yes. We have more than 12 percent,
9 but we used those dollars every day. We
10 currently have a fund balance of 800,000.
11 Actually 742,168. Thank you. I knew you
12 wanted to have that number.
13 But the difference is charter schools
14 can't go to the taxpayers to raise the funds
15 for things they need. I can't stay in
16 business and continue to provide -- provide an
17 appropriate education for our students without
18 those funds.
19 While we've been able to increase the
20 fund balance each year, we've also been
21 investing the money back into our students'
22 education.
23 We also use the fund balance to pay
24 the bills. Last year we billed over 200
25 school districts nearly $4 million. I'm
162
1 rounding off now.
2 Of the 200 -- of the 200 school
3 districts, 60 percent pay us. They pay us
4 directly, and I believe we get -- we're the
5 highest of all of the cyber schools.
6 As of yesterday we were still waiting
7 for $311,000 of that 4 million from last
8 year. So we use these -- we use these dollars
9 all the time.
10 This is my fourth year in running the
11 cyber school, and my third in a row that there
12 has been a House Bill out there that intends
13 on reducing the fund below our cost.
14 In 2005 it was House Bill 1278, which
15 was the one building the funding around
16 blended schools.
17 Last year it was House Bill 2616,
18 which lowered the figure to the 3,000 to
19 $5,000 number.
20 And this year it's -- we are talking
21 about today.
22 Without a fund balance, I'm unable to
23 pay my teachers and staff and they will be
24 more likely to look elsewhere for job
25 security. Large turnover is very hard on
163
1 student success. I want to make AYP again,
2 and I've got to do it and keep those teachers
3 around. That's where -- that's where the
4 funding comes from so...
5 Our cyber school provided other
6 services to the regular districts that I feel
7 are part of this discussion. I personally met
8 with over 50 superintendents regarding them
9 building online programs in their schools.
10 In fact, a few of them that were on
11 the panels today. So I met with their school
12 districts.
13 I sit on technology planning
14 committees and strategic planning teams in
15 order to share what we've learned about the
16 online learning, for the betterment of public
17 education.
18 We also don't bill the school
19 districts for the IEP's that are updated. In
20 other words, IEP's that's outdated and we
21 don't -- we don't bill them while we still
22 provide those services. Now, that might not
23 seem like a whole lot, but it adds up. Last
24 year $90,000. The year after that -- well,
25 two years ago. Last year then it was 95,000.
164
1 That's 26 school districts that -- that didn't
2 get billed for those services, although we
3 still provided them.
4 We also monitor truancy very close.
5 We involve the local school districts early in
6 the process. We get them involved because
7 that's the way we get the kids back into
8 school.
9 But last year we lost 38 kids on
10 ten-day removals. In other words, they didn't
11 do their stuff that they were supposed to be
12 doing under the ten-day period under the PA
13 code. We removed them and sent them back.
14 That's eight percent of my population.
15 So we enforce it heavily because if
16 they're not in our school we don't want to
17 bill to the local school districts.
18 Again, remember from what was on my
19 board. They provide a lot of direction on
20 this.
21 I applaud your efforts in House Bill
22 738 to make it easier for us to retrieve the
23 property. I really thank you. That is a big
24 one to us. We spend about a hundred thousand
25 a year trying to collect that -- that
165
1 equipment back.
2 There are some things in there that
3 are a little bit different that I guess I
4 don't agree with, and I guess one example is
5 cyber charter schools versus charter cyber
6 schools. Changing the name structure, it's
7 just going to cost me money in changing the
8 signs and I don't think there's any benefit to
9 that, but, hey, that's just my opinion.
10 Like last year -- hey, that's why I'm
11 up here. I got the mike, right? And look at
12 that. I haven't gone over my time yet.
13 Like last year, I invite you to come
14 to my school and visit and see what we do.
15 Earlier this week one of my board members, one
16 of the I executive directors, Chris
17 McGinley is the name, had some dates and I
18 guess we're trying to coordinate and see when
19 we can get out there in Downingtown.
20 So thank you for this time.
21 MR. TULLI: Good afternoon. Dennis
22 Tulli, former superintendent of the Lebanon
23 School District, and currently CEO of
24 Commonwealth Connections Academy.
25 I will also summarize my testimony.
166
1 I came -- I come here today as a lifelong
2 public school educator to share my
3 perspectives and I thank you for the
4 opportunity.
5 During my years as superintendent I
6 shared the misconceptions of my fellow
7 administrators about public cyber schools,
8 some of which you've heard today.
9 How could a school without a building
10 really be a school? How could it possibly
11 cost as much as a brick-and-mortar plan? How
12 could teachers who don't face their students
13 in desks every day really teach? And how can
14 we know if the education that these students
15 are receiving is any good?
16 And let me say that I must commend my
17 colleagues who testified earlier this
18 afternoon. I've seen a huge transformation
19 over the past seven years. Many of them are
20 not asking those questions anymore because
21 they realize it's possible. So they have
22 learned something.
23 However, they have a long way to go.
24 I hear comments like the cost of our education
25 is a laptop. That indicates to me that you
167
1 need to visit our schools and find out what
2 we're doing.
3 I could also see the demand was
4 booming with students, and so I was asked -- I
5 was asked to participate with Connections
6 Academy to earn charter and bring their school
7 to Pennsylvania.
8 I served as a board president for a
9 few years and recently was named as CEO for
10 our school. The truths I have learned about
11 cyber schools to replace the myths I once
12 believed could fill a book, but they boil down
13 to one crucial reality. Pennsylvania's cyber
14 schools are public schools like any other
15 public school in this state and our state goes
16 off the rails policy-wise when we treat cyber
17 schools as something less than full
18 Pennsylvania public schools.
19 Let me give you a couple examples.
20 For example, accountability, and you've heard
21 it. We are as accountable in -- in every way
22 that Pennsylvania bricks-and-mortar schools
23 are.
24 However, we have more accountability
25 than that. We have PASCCR and we are
168
1 accountable to our parents because we're
2 talking to them all the time.
3 When I was superintendent of schools
4 in the Lebanon School District, I didn't get
5 to know many parents and neither did my
6 principals and my teachers, unfortunately,
7 because we had 4,000 children and 200 staff
8 members and they were in and out.
9 And we do get to know our families.
10 and that is the height of accountability. We
11 know who we are answering to.
12 Quality. Like every school
13 administrator in every district across
14 Pennsylvania, my goal every day is to provide
15 a quality education.
16 Last year 90 percent of our parents
17 graded us A or B. 73 percent said our school
18 was more challenging than the school that
19 their child came from.
20 We make -- in terms of test scores we
21 made AYP last year in every group but one
22 small subgroup. Because our K to 11 is
23 considered all one unit for purpose of PSSA's,
24 we were considered not meeting AYP.
25 If that same statistic was with me at
169
1 the Lebanon School District seven years ago,
2 only one of my schools would have not made
3 AYP. But the entire district, my elementary
4 schools, the high school would have been
5 considered meeting AYP.
6 What's most impressive to me from the
7 testimony I heard earlier today, and it's the
8 wonderful mother from Philadelphia, we had a
9 satellite school in Philadelphia. Our
10 Philadelphia children in that school all made
11 AYP. I wonder how the Philadelphia city
12 schools did last year?
13 As far as funding is concerned, my
14 colleague, Earl Grier, spoke to funding in --
15 in Beaver County earlier this year, and I'm
16 not going to get into details of funding. The
17 people here have done a better job than I have
18 in that area and I wouldn't add anything
19 anyhow.
20 But, however, I do want to talk to
21 you that there are many national experts that
22 are looking at this, and they are -- they're
23 determining that our cost level is the same as
24 bricks-and-mortar public schools.
25 And let me tell you as a former
170
1 superintendent, who looked at many, many
2 budgets in urban school districts, that our
3 costs are -- they're not exactly the same in
4 that we don't have buses and we don't feed
5 children but, you know what, when it came time
6 to test children in the Lebanon School
7 District, it actually saved us a little bit of
8 money because we didn't have to hire
9 substitutes and our staff handled it.
10 When we test children in Commonwealth
11 Connections Academy, last year we spent
12 $70,000 in testing. This year we budgeted
13 $100,000 in testing at Commonwealth
14 Connections Academy. Because we go all over
15 the state and test every child.
16 And I would submit to you that's the
17 cost that is not there in the
18 bricks-and-mortar schools.
19 And, finally, having to do with
20 our -- our focus on learning, that is our
21 focus. We don't spend a lot of time on
22 discipline. We don't spend a lot of time on
23 some of the tangential things that
24 bricks-and-mortar schools have to deal with.
25 And I realize that's their burden and
171
1 I empathize with it. I had to deal with it.
2 But I want to tell you that we can
3 focus on what's important, and that's the
4 learning of the children in our schools.
5 And -- and because of that I think we've made
6 great strides.
7 Thank you for your time and attention
8 today. And we'd be happy to answer any
9 questions.
10 REPRESENTATIVE MCILVAINE SMITH:
11 Thank you. We have a question from
12 Representative Beyer.
13 REPRESENTATIVE BEYER: Good
14 afternoon. Can you hear me okay?
15 MR. TULLI: Sure.
16 REPRESENTATIVE BEYER: Good
17 afternoon. Thanks for being here.
18 Dennis, just very quickly to respond,
19 we know -- I know that all of you are very
20 proud of your schools. You also need to
21 remember there are 1.8 million children in the
22 public school systems throughout the state
23 that are very proud of their schools.
24 And it really shouldn't be about us
25 versus them. I'm fully aware of the problem
172
1 in the Philadelphia School District. I can't
2 imagine -- and, Dennis, maybe you have all the
3 answers to education, but I can't imagine you
4 attempting to educate 180,000 children. It's
5 a tough job, and you and I both know that.
6 And having said that, you have to go
7 out and have the PSSA administered from -- in
8 a hard copy, right? All these children?
9 You know, there may be an opportunity
10 here that we could have the PSSA administered
11 online for your students which may eliminate
12 that kind of burden.
13 So perhaps that's something that we
14 should address and talk about that might fit
15 the curriculum of the schools.
16 Having said that, it doesn't help.
17 Doesn't help. Trust me.
18 Jose.
19 MR. PARRILLA: Yes.
20 REPRESENTATIVE BEYER: Jose, Jon and
21 Dennis, can you please give me your average
22 yearly cost per student? I need the number.
23 MR. MARSH: It's in my report.
24 MR. TULLI: Go ahead. You start.
25 REPRESENTATIVE BEYER: These are
173
1 all -- these are all -- since you're all
2 involved in these financial decisions, I need
3 your average yearly cost per student and I
4 assume that each one of you came with that
5 information. I just need your average cost
6 per student per year
7 MR. MARSH: Actually --
8 REPRESENTATIVE BEYER: And we're able
9 to get that. As you know, from every public
10 school district, we're able to get that.
11 I need that from you today.
12 MR. MARSH: All right. It's in my
13 testimonies. Those numbers I gave you.
14 REPRESENTATIVE BEYER: Could you just
15 say it publicly for me?
16 MR. MARSH: Yes. I need to get my
17 testimony for myself.
18 REPRESENTATIVE BEYER: Is it seven
19 thousand --
20 MR. MARSH: Actually, for the
21 2005/2006 school year, it was actually -- the
22 numbers quoted by Dr. Zahorchak would be six
23 thousand -- this six thousand -- ditta,
24 ditta (sounds) -- sorry --
25 MR. PARRILLA: 881.
174
1 MR. MARSH: 881. 6,881.
2 REPRESENTATIVE BEYER: Thank you.
3 MR. MARSH: For the following year it
4 was 7,779. That would be the '06/'07.
5 REPRESENTATIVE BEYER: Okay.
6 Thanks. Jose?
7 MR. PARRILLA: Yes. For us -- and
8 this is based on this past school year, which
9 we haven't closed out yet. We're still going
10 through our audit. But for an average, for
11 every student, it costs $7800, roughly $7800
12 to educate, and for special instruction
13 students roughly 15,884. And that's breaking
14 it down the same way the school district would
15 do it.
16 REPRESENTATIVE BEYER: Yeah. I know
17 that and I appreciate you saying that because
18 the number for special ed would be a very good
19 point. We're just talking about the
20 nonspecial eds.
21 MR. PARRILLA: Yes.
22 REPRESENTATIVE BEYER: Okay. Jon --
23 or Dennis, I mean. Yeah.
24 Who am I missing?
25 MR. TULLI: I'll have to get that
175
1 exact number. But approximately -- the
2 approximate number was $7,500.
3 REPRESENTATIVE BEYER: Great. Are
4 you aware -- just on a final comment -- that
5 Florida, the state of Florida, has assigned
6 for a cyber charter education for every
7 full-time student -- we're not talking special
8 ed -- every full-time student, the Florida
9 tuition rate, statewide tuition is $6,682.
10 Are you aware of that? It sits
11 around similar to you.
12 MR. MARSH: It's a little -- well,
13 it's somewhat similar to us, except for
14 Florida actually was state funded for the
15 first five years.
16 So I spent -- I spent a week down at
17 the Florida campus to try to figure out how
18 they're doing it and, yeah, their number is --
19 their number is lower but also they had five
20 years of start-up from the state, fully
21 funded. So it is a little different.
22 REPRESENTATIVE BEYER: Okay. And
23 that may be -- that may be helpful. If maybe
24 you'll sit down with me in the -- in the next
25 few days, we'll talk about it, hopefully next
176
1 week, and talk about those start-up costs, the
2 first five years' start-up costs because that
3 might be something we can reformulate. And
4 talk about that.
5 MR. MARSH: Right.
6 REPRESENTATIVE BEYER: Because I
7 think it's a one time $250,000 grant. Is that
8 about right for start-up costs?
9 MR. MARSH: No. No. In Florida?
10 REPRESENTATIVE BEYER: No.
11 MR. MARSH: Here?
12 MR. TULLI: Here.
13 MR. MARSH: Oh.
14 REPRESENTATIVE BEYER: Here in
15 Pennsylvania. It's really a minimal amount
16 that you get to start up. Is that correct?
17 MR. TULLI: Yes.
18 MR. MARSH: Right. Nothing. I mean
19 we didn't.
20 REPRESENTATIVE BEYER: Okay. Just
21 throwing this out there, not that I feel this
22 way at all, Indiana, you're aware that the
23 state of Indiana banned any public funding for
24 cyber charter schools? Are you aware of
25 that?
177
1 They did that this year. So there
2 is -- there is some states that are
3 responding, like Pennsylvania, I think, to the
4 kind of technology leap and the value of your
5 schools but there are other states that are
6 banning them altogether.
7 But pretty much the consensus
8 nationwide is to achieve a statewide tuition
9 rate.
10 MR. MARSH: Right. Also Michigan has
11 also, in the same year, last year, made the
12 requirement of all students graduating from
13 Michigan to take an online class.
14 So they did the opposite. It's a
15 requirement for every student.
16 REPRESENTATIVE BEYER: I think -- I
17 think that's actually a good idea. I think
18 it -- I think that's where the competition is,
19 first of all, because your curriculum makes it
20 a lot better.
21 Anyway, thank you all very much for
22 being here. Thank you.
23 REPRESENTATIVE MCILVAINE SMITH:
24 Representative Rohrer.
25 REPRESENTATIVE ROHRER: All right.
178
1 Let's try this and see if it works.
2 All right. I'd like to thank you for
3 your testimony here. I know that, as I
4 mentioned at the beginning, a lot of issues
5 that revolved around these single tuition
6 rates and the accountability issue, fund
7 balances, and all of that.
8 And I think I -- I appreciate the
9 straightforwardness of what you've laid out,
10 that data, to us today.
11 I am kind of surprised to see in the
12 grouping the closeness of what you're spending
13 per student. You know, getting -- getting --
14 getting an average per spending for 501 school
15 districts is completely elusive and not
16 possible.
17 And -- and as I look at this, and we
18 had testimony from the panel before, and a lot
19 of what I heard I didn't agree with, and I'll
20 sum it up as this, in this venue, but anyway
21 what we really are talking about, more than
22 anything, is -- is finance reform, the way we
23 fund public education.
24 The discussion that we had earlier
25 from the gentleman from Delaware County, and
179
1 some of the others that are very poor public
2 school districts, have great difficulties and
3 they have had difficulties for a long, long
4 time. And -- and -- and they can't meet the
5 needs of their students.
6 And that's a problem that's faced
7 this legislature for a long time. That's what
8 we call equity.
9 And -- but we can't deal with that
10 issue either until we change the way we fund.
11 And so for -- and so we're looking at a bigger
12 issue. I think as we look at the different
13 perspectives that we've shared here today, a
14 lot of it, as I commented earlier, is comments
15 by folks who have not visited your locations.
16 THE AUDIENCE: You're right. Right.
17 Yes.
18 REPRESENTATIVE ROHRER: And that's
19 critically important, and I think as a
20 committee we have the obligation here, we're
21 talking about public education here, the
22 different venues of providing public
23 education, but public education nonetheless.
24 We talk about the level playing fields.
25 Frankly, you should not be burdened
180
1 with the same obstacles that the 501 school
2 districts are burdened with.
3 On the other hand, you don't have the
4 ability to tax.
5 MR. MARSH: Right.
6 REPRESENTATIVE ROHRER: You don't
7 have the ability to do a lot of other things
8 that they do. So to that extent nobody wants
9 you to have that either.
10 So we've got to come at it from the
11 perspective that we have obligations that
12 first -- first and foremost have got to meet
13 the needs of our children and -- and the
14 parents, thank you for -- ma'am, for your
15 testimony today, because at the end of the
16 day, public education is supposed to be for
17 the benefit primarily of our parents and then
18 as experienced by our children.
19 So that being the case, I look at it
20 and I say, what we have in this number of
21 years into this experiment for charter
22 schools, then cyber charter schools, is fairly
23 predictable and these things that we're going
24 through now are fairly predictable.
25 It's how we deal with them, with the
181
1 aspect that we continue to cultivate, rather
2 than shut down and diminish, becomes, I think,
3 the challenge before this committee.
4 And I appreciate what you have
5 presented and, you know, we're going to have
6 to deal with that as a -- as a committee but
7 you -- as we've gone across the state, the
8 testimony has been very, in my opinion, very
9 well presented, articulate, and impassioned.
10 And that's what were going to need for good
11 education.
12 So I just want to put that out there
13 and thank you for your presentations. Thank
14 you.
15 MR. MARSH: Thank you.
16 MS. LEWIS: Thank you.
17 MS. WILLIAMS: Thank you.
18 REPRESENTATIVE MCILVAINE SMITH:
19 Thank you. And thank you all, presenters, and
20 we're going to move on. We're a half hour
21 behind and we need Sandra Fouch, Andrew Oberg,
22 Nathan Benefield, and Dr. Bob Maranto.
23 As soon as the reporter is ready.
24 And, Sandra, we'll start with you.
25 DR. FOUCH: Good afternoon. Thank
182
1 you for inviting me here today. I am fairly
2 new to the cyber school arena, about one year
3 of experience.
4 But I do come to the cyber school
5 with 15 years of traditional public school
6 teaching, taught middle school language art in
7 a couple of low-performing schools that we
8 worked very diligently to make progress, and I
9 will say, deviating from my written testimony,
10 that there were so many students that we had
11 in our schools that I was unable to meet their
12 needs.
13 The textbooks we were given, the time
14 constraints, having 35 students in a
15 classroom, big, big detriments. And there
16 were some students that had cyber school been
17 an option that would have been the place.
18 This past Monday evening I attended
19 one of PA Cyber's back to school fairs, which
20 we hold nine across the state.
21 This gave us an opportunity to meet
22 with families and students. They came, and I
23 spoke to them about student achievements.
24 That is our goal. That is what we all want.
25 We want the students to achieve to their
183
1 highest potential.
2 And in doing that, I was able to talk
3 to them about curricular choices, time doing
4 asynchronously or synchronously. They were
5 able to choose grade levels where they needed,
6 excel how they wanted, work at their own
7 pace. We have tutoring options. We have
8 Saturday tutoring.
9 And I only wish that I had, during
10 those 15 years of teaching, half of those
11 options to have offered my students. And I
12 think that would have made a world of
13 difference.
14 Going back to some of what I wanted
15 to talk about in my written testimony is, as I
16 spent those 15 years teaching, I saw -- I
17 kind -- I kind of became disheartened so I
18 went back to school because I wanted to
19 advance my degree and move into a field where
20 I could affect change and educational
21 intervention -- innovation.
22 So I earned my doctorate degree and
23 began looking for where I could go to make
24 that sort of impact, and PA Cyber was the
25 place that I found. And I believe that now I
184
1 am part of the change and innovation and would
2 love to see that continue.
3 The first two hearings, I attended
4 the one in Pittsburgh, and we talked a lot
5 about accountability or lack thereof with
6 cyber charter schools.
7 And I want to say that PA Cyber, we
8 are all about accountability. Because
9 accountability is where our students achieve,
10 and everything that we do is based on wanting
11 our students to maximize their education.
12 My employment there is just one
13 indication of this commitment. They actually
14 hired a person to look at data, and that's
15 what I do. I look at our test scores. I look
16 at our students' achievement results and we
17 use this information to derive curricular
18 change.
19 That is a huge investment, and one
20 that not others -- I'm not aware of a lot of
21 other schools being able to do.
22 We have over 8,000 students this year
23 at PA Cyber. We have a lot of these students
24 that are new, and they -- we now have six
25 months, the clock is ticking, to get them
185
1 ready to be tested in April to find their
2 strengths and weaknesses and then to have this
3 evidenced on their state testing. A daunting
4 task.
5 Also some of the challenges --
6 challenges that are inherent to cyber
7 schools -- and a couple of those were
8 mentioned that we do. We travel across the
9 state to administer PSSA tests.
10 Last year PA Cyber, we spent
11 $160,000, a little more than that I think, to
12 do our testing, and we logged over 36,0000 --
13 36,000 miles of travel to test our students.
14 We used the 30 testing sites. The
15 site that I actually worked at was an ice
16 skating rink. And we tested our students, and
17 we test our students in two days.
18 Most brick and mortar schools that I
19 would -- that I worked with, we used --
20 utilized the full week. We test our students
21 in two days, in an unfamiliar environment,
22 with people that they don't know sitting next
23 to them, being proctored by people they
24 haven't met before, having driven an hour to
25 get there, and we still achieve.
186
1 As a matter of fact, at PA Cyber much
2 was talked about the fact that we did not meet
3 AYP for two consecutive years. We were on
4 School Improvement I. That was because in the
5 2005 school year, five special needs students
6 did not take the test. So we failed to meet
7 the 95 percent participation rate.
8 Then again in 2006, five special
9 needs students failed to take the test. So we
10 were on School Improvement I because we failed
11 to meet that criteria two years in a row.
12 So with that as our challenge, we met
13 it head-on. We worked diligently. And I'm
14 very proud to say that in 2007 we tested 99
15 percent of our special needs students and 98
16 percent of our total population.
17 We have also never failed to meet
18 academic performance targets. We have met
19 them every year since AYP reporting has
20 started.
21 In math and reading PA Cyber students
22 have met what the state considers to be
23 adequate yearly progress.
24 At PA Cyber they were not satisfied.
25 We have students that are not meeting those
187
1 targets. We know that, and we are focusing on
2 those students this year. And we want --
3 adequate is not good enough. We want to make
4 sure that every student achieves their
5 potential.
6 So at PA Cyber we want AYP to stand
7 for achieving your potential instead of just
8 adequate. It's not good enough.
9 So we did meet 21 out of 21
10 performance targets. These are the same
11 performance targets that brick and mortar
12 schools are required to meet.
13 Our graduation rate, as evidenced in
14 the charts that you have attached to my
15 testimony, has consistently increased to last
16 year where 89.35 percent of our students
17 graduated.
18 You can see our test participation
19 analysis on the graph, close to 100 percent.
20 And then on the second page, shows the number
21 of our students that are proficient or
22 advanced in reading and math, and then in our
23 African-American subgroup, which we are
24 challenged with because our numbers increase
25 year after year, but you can see that that has
188
1 also been on the increase as well.
2 I have included my contact
3 information on my testimony, so, please, if
4 you have any questions or if there's any other
5 information that I can provide, I would be
6 happy to do so.
7 Thank you.
8 REPRESENTATIVE MCILVAINE SMITH:
9 Thank you.
10 MR. OBERG: Thank you, Sandra.
11 First, let me personally thank those members
12 that are here today for the opportunity to
13 educate one another.
14 I will also diverge from my
15 testimony. You have that before you. It
16 actually speaks to the ways in which
17 accountability and choice in Pennsylvania has
18 driven educational ingenuity, innovation, in
19 what we're able to provide to our kids to meet
20 those levels required in NCLB, AYP, and PSSA
21 testing.
22 What I'd like to speak to you about
23 now, and how I'd like to speak to you, is not
24 only from the educator perspective but as a
25 father.
189
1 Unfortunately Representative O'Neill
2 is not here right now. He said something
3 earlier in his testimony that I'd like to -- I
4 wrote this down. In his testimony, he said,
5 this is about dollars and cents. That's what
6 this is about.
7 This is not about dollars and cents.
8 That's not what this is about.
9 In 2000 I became a father for the
10 first time. That's what this is about. It's
11 about the kids.
12 In my testimony, now I wish to be a
13 voice to the kids. I wish to give voice to
14 every child. So -- and I apologize.
15 (Showing picture) I'm a big softie.
16 This is -- I'm holding it. I promise. I
17 apologize.
18 This is my son Max, and Max is a
19 seven-year-old boy. He looks typical. I
20 think he -- he looks like a lot of precocious
21 seven-year-old boys, but to me he's not
22 typical. He -- he is the future.
23 You know, we talked about emotion
24 before, and I wish I could keep it in check,
25 but I think this is an emotion that you see
190
1 when you have kids.
2 Up until 2000 I was -- I was a
3 teacher. I was a high school teacher. I
4 cared about my kids; but when he was born
5 (snap of fingers), I had a new purpose. I had
6 new purpose and I understood.
7 And what you have done when you
8 enacted cyber charter legislation was you
9 provided an opportunity.
10 See, he's a poster child for cyber
11 education. But here's the thing. He's a
12 seven-year-old in second grade in McKee
13 Elementary at West Allegheny School District,
14 but he's a poster child because the potential
15 that is there for him, the opportunity, the
16 choice that is here for him now, right now he
17 loves his school.
18 But one day he may say to me, daddy,
19 I need more. I want to accelerate in my
20 curricular options. I want to do things that
21 I -- that right now today I could not think of
22 for him.
23 He's the next president of the United
24 States. He's the next teacher in
25 Pennsylvania. The options that we provide to
191
1 all children -- we're not just talking of
2 20,000 children today that are in cyber
3 education. We're talking about every child.
4 And think about this. Through your
5 legislation, you've created a world class --
6 not just in the United States, a world class
7 ideal, an educational opportunity that right
8 now with House Bill 446, 738 and 1655 you
9 would devastate. You would destroy.
10 I have heard folks coming today
11 saying, we are for cyber education. And what
12 did they talk about? Dollars and cents.
13 This is not about dollars and cents.
14 You've created something that is world class.
15 The envy of other countries.
16 You -- please, do not think about
17 taking us back to the last century. Because
18 that's where I think you came from. This is
19 not.
20 REPRESENTATIVE MCILVAINE SMITH:
21 Thank you. And I'm sorry.
22 MR. OBERG: That's okay. And I
23 apologize. I just broke up on you and lost a
24 lot of time.
25 Can I finish with this? Can I finish
192
1 with this last point?
2 REPRESENTATIVE MCILVAINE SMITH: Yes,
3 please.
4 MR. OBERG: The last point is this.
5 For Max and for the rest of the children that
6 do not have that opportunity, that voice,
7 please continue to give our families that
8 choice.
9 Thank you.
10 MR. BENEFIELD: Good afternoon. My
11 name is Nathan Benefield. I'm the director of
12 policy research for the Commonwealth
13 Foundation. I'm joined by Bob Maranto, who is
14 a fellow with our council, professor of
15 political science at Villanova University.
16 I want to thank the committee for
17 allowing us to share some of our thoughts on
18 the legislation and some of our research on
19 the school spending.
20 The legislation being discussed today
21 is in response to a lot of charges against
22 cyber schools, that they're not accountable,
23 that they don't provide quality education, and
24 that they take too much money from school
25 districts.
193
1 But none of the legislation before us
2 would improve accountability nor would it
3 improve quality of education. All of these
4 bills simply seek to reduce funding to
5 students that go to cyber schools.
6 Ostensibly, these bills are about
7 saving taxpayers money, but cyber education
8 costs less than one percent of the total
9 spending on public education in Pennsylvania.
10 And this while educating about two percent of
11 the students.
12 If students left cyber schools for
13 public schools, they wouldn't save taxpayers
14 money. The taxpayers would actually spend
15 more because cyber schools cost significantly
16 less than traditional public schools.
17 The student leaving a district school
18 for cyber schools take -- gets about 73
19 percent of the average spending for public
20 schools.
21 Many of the critics of the cyber
22 schools say that they should, in fact, get
23 less because they don't operate classrooms,
24 they don't have the facilities' needs.
25 But the current funding formula
194
1 already excludes what school districts spend
2 on construction, what they spend on
3 transportation, what they spent on debt, and
4 certain other costs.
5 School districts keep this funding.
6 The cyber schools receive no funding for
7 facilities.
8 If the goal of this committee is to
9 reduce the burden on taxpayers and to make
10 educational spending more accountable, you
11 need to look at spending of school districts,
12 the 99 percent that we're not looking at
13 today.
14 The Commonwealth Foundation recently
15 released -- released a report titled Edifice
16 Complex, which does just that. Your offices
17 have all received a copy. But if you need
18 another one, you can request one of me
19 tomorrow. This was on our website.
20 One of our more troubling findings
21 was the amount of money being poured into new
22 construction. Construction and debt costs
23 about 12 times the amount of total spending
24 for cyber schools, and our analysis found that
25 over the past 10 years instructional spending
195
1 in public schools increased about 50 percent
2 but spending on construction and debt
3 increased over 100 percent.
4 We also examined cyber schools, and
5 we found that cyber schools served many of the
6 hardest-to-educate students. Cyber school
7 students are disproportionately low income,
8 come disproportionately from school districts
9 that have low academic performance, and often
10 have special needs.
11 Like all charter schools, cyber
12 schools must renew their charter every three
13 to five years and they can lose their charter
14 if they fail to measure up.
15 Cyber schools also face the highest
16 accountability standard -- parental choice.
17 If a parent feels their child isn't getting a
18 quality education, they not only have the
19 choice between their local school district and
20 cyber school but between all 11 cyber schools
21 in the state.
22 I find a certain degree of hypocrisy
23 in proposing limits on cyber school funding
24 while advocating for and passing increases to
25 school districts even when they fail
196
1 spending -- even when they fail to perform.
2 I noted that among the largest,
3 someone mentioned this previously, but the
4 largest two cyber schools passed AYP this
5 year.
6 But among the largest school
7 districts in the state, Philadelphia,
8 Pittsburgh, Allentown, Harrisburg, they all
9 failed to make AYP.
10 I'm not going to try to get into the
11 questions of why they passed or why they
12 failed AYP, but I will ask the question why
13 are they the largest?
14 The school districts are the largest
15 because we assign students to go to these
16 schools. We tell them this is your school
17 district.
18 For cyber schools it's because
19 parents choose those schools.
20 So I think instead of trying to cut
21 off choices for parents by cutting cyber
22 funding, we -- we believe lawmakers should
23 apply the lessons of charter schools to all
24 public schools.
25 And this means that the family should
197
1 be able to choose the public schools in their
2 district and between districts they send their
3 children to, and schools should compete to
4 attract students.
5 State and local funding should follow
6 the child. Schools should only receive
7 funding when families choose to send their
8 children to them.
9 And all public schools should have
10 charters that have to be renewed
11 periodically. When schools fail to perform to
12 standards, they should have their charters
13 revoked.
14 Thank you for your time. I'm going
15 to turn it over to Professor Maranto to talk
16 more about some of our research on school
17 spending and on cyber schools.
18 DR. MARANTO: Thanks so much, Nate.
19 Thanks, Representative Beyer. It's
20 really delightful to be here.
21 Nate, kick me when I've got two
22 minutes left. Okay? You know.
23 I'm an associate professor at
24 Villanova University and, with others, I've
25 published and edited eight books and 40,
198
1 50-some other scholarly publications so boring
2 that nobody ever reads them.
3 In recent years I've spent a lot of
4 time in public schools. I've done field work
5 or consulting in about 40 of them around the
6 country. And I did it mostly on education and
7 form research.
8 I also taught for 20 years. I take
9 education very seriously. I'm meeting with 58
10 student sessions this fall and only canceling
11 two. This is one of them, because I think
12 this is that important. It's important
13 because the futures of a lot of kids, a lot of
14 kids I know depend on it.
15 Nate has done a really good job here,
16 Just because you've done a fine job, I'm going
17 to hit five key points.
18 The first one is just keep the focus
19 on the kids. Too many people in this debate,
20 good people, too often get caught in matters
21 of grownup budgets, grownup turf battles,
22 grownup egos, everything like that.
23 Remember, the kids come first.
24 I like a lot of our traditional
25 public schools. I send my -- we send our son
199
1 to one. We're absolutely delighted there.
2 But I can also tell you that
3 education is very hard work. And I can take
4 you to schools, some in my own district, that
5 frankly are not doing a very good job.
6 When they're not, parents need
7 options. One cyber mom I spoke to told me --
8 there's actually a few of them told me stories
9 like this.
10 My daughter was picked on for being
11 smart. The pressures were really bad. In the
12 school teachers and administrators say they
13 crack down on bullying, but when the popular
14 kids are bullying they just think it is funny.
15 We would go in for teachers meetings. It was
16 like, we had no idea. And they wouldn't do
17 anything.
18 Their daughter was very depressed.
19 They pulled her out after three years, put her
20 into cyber school. Mom told me she's a
21 changed girl now. She's happier. She's
22 talking about going to college. She's writing
23 stories. She's reading again.
24 Before then the emotional strain of
25 going to school was so great that she really
200
1 couldn't do anything else.
2 There's a lot of stories like that.
3 And so I say before changing a law that's
4 working for a lot of kids, you need to talk to
5 the parents who are making that choice.
6 One of the school district
7 superintendents who spoke earlier said that
8 he's here, his school loses an average of 25
9 kids to cyber charters, and I wanted to say
10 you need to talk to those parents and ask them
11 why.
12 When you look at the data, certain
13 school districts seem to lose a lot of kids to
14 cyber charters.
15 And having done a lot of field work
16 in Arizona, I can tell you some things about
17 those districts off the record, not on the
18 record.
19 Second, even when public schools are
20 doing a great job, and a lot of them do. I
21 love the school my son attends. They're not
22 doing a great job a lot of times for all the
23 kids.
24 I'm on the local special ed
25 committee. Special ed in particular is really
201
1 hard. Cyber schools seem to serve -- and I
2 don't intend to get into this really with
3 numbers -- but they seem to serve a
4 disproportionate percentage of special ed and
5 special needs kids.
6 I interviewed eight cyber operators.
7 They all claim that their schools serve
8 between 20 and 100 percent more special ed
9 kids than the state mean.
10 As one teacher told me, the cyber
11 charter officially has 42 percent more special
12 ed students than the state mean but he said,
13 quote, it's probably a lot higher than that.
14 A lot of the kids who would be diagnosed and
15 drugged at my old school don't seem to need it
16 here.
17 Diagnosis and drugged is a term I
18 use -- I hear a lot, special ed, in a
19 language. It's not always the best things for
20 the kids though.
21 I would make the case that serving
22 more special kids online, when their parents
23 choose it -- parents are, I think, a key part
24 of accountability here -- has the potential to
25 both help the kids and save traditional
202
1 schools money. I think it's something that
2 needs to be explored more.
3 Cybers help traditional public
4 schools in another way. To meet their
5 academic goals under NCLB, traditional public
6 schools often urge their academically weak
7 student to try cyber schooling as a second,
8 and sometimes last, chance.
9 This relieves traditional public
10 schools of the burden of serving students who
11 frankly they just don't seem to be serving
12 very well.
13 In fact, the U.S. Department of
14 Education issued a report in 2004, my friend
15 Bryan Hassel wrote it, suggesting that it's
16 something traditional school districts should
17 look at in meeting their NCLB goals and that
18 would, I think, also serve children's needs.
19 Despite serving a lot of kids who are
20 very tough to educate, Pennsylvania's 11
21 cybers either made or narrowly missed AYP,
22 adequate yearly progress.
23 My very good research assistant,
24 Jason Urbryan (phonetics), just crunched these
25 numbers Monday. He finds they meet 142 of 161
203
1 goals, 88 percent, of the testing and
2 graduation goals and they were narrowly
3 missing most of the others.
4 I think given their student
5 population, it's really very good.
6 NCLB will be reauthorized, I think,
7 in a value-added model and I think then
8 they'll be doing even better. But that's
9 another story for another day.
10 Third, the actual statistics show
11 that cyber charters do not drain much in the
12 way of resources from traditional public
13 schools.
14 Statistically, the average
15 Pennsylvania public school district has about
16 4,204 students. It's lost only 31.7 students
17 to cyber charters. It's about eight-tenths of
18 one percent. Only six of the Commonwealth's
19 501 school districts have lost 2.5 percent or
20 more of the enrollment -- of their enrollment
21 to cyber charters.
22 Despite the growth of cyber
23 schooling, from fall 2002 to fall 2005, the
24 average school district gained 44.1 students.
25 That is a gain of more kids in a total
204
1 enrollment than is sent to cyber schools.
2 Cyber schooling does not stop the
3 growth in public education. Most Pennsylvania
4 school districts are still growing and because
5 of that cyber schooling, I would make the
6 case, actually helps districts financially,
7 most districts, helps them financially by
8 delaying or avoiding costly school
9 construction and renovation projects.
10 In any event, the normal growth and
11 decline in enrollments from demographic forces
12 like births, normal population growth,
13 immigration, dwarfs the growth from cyber
14 charters.
15 More than a hundred school districts,
16 Pennsylvania school districts, added more than
17 106 students from fall of '03 to fall of '05.
18 More than a 100 lost 58 or more students in
19 the same period. Each change dwarfs the
20 growth in cyber charter -- cyber schooling in
21 both size and speed.
22 I think if school districts have the
23 administrative capacity, the administrative
24 competence to adjust to normal demographic
25 changes, like birth and immigration, they can
205
1 adjust to much smaller changes made by
2 parental choices and those parental choices
3 are designed to serve their kids.
4 I think it is more about ego than it
5 really is about managing the finances, quite
6 frankly.
7 I might add that I'm concerned that
8 some of our Commonwealth's public schools
9 don't do as well as they could at managing
10 costs.
11 I found that there's some amazing
12 correlation, negative .85, between percentage
13 of budget spent on construction and spent on
14 instruction. It's a huge correlation. It's
15 one I've rarely seen as a social scientist. I
16 guess -- compare gay activists and Christian
17 coalition in voting, that's about what it's
18 like.
19 The -- too many schools are frankly
20 spending too much in Taj Mahal buildings when
21 they should be putting the money into teachers'
22 salaries, something that really will improve
23 education.
24 Fourth, I would make the case cyber
25 charters do not need more regulation. For
206
1 those that think cyber charters are
2 unregulated -- here, Nate. Can you take this
3 up to the top?
4 I have a picture there of me taken
5 Monday at Achievement House. I asked them to
6 line all the reports they have to file in a
7 year.
8 Next to me on the floor and on the
9 shelf above me are all the reports that they
10 had to file in the last 18 months, except for
11 the online reports that are not shown.
12 And I'm kind of old fashioned about
13 this stuff. I'm only about five foot six. I
14 think that education would be better if on
15 the -- the total amount of required reports
16 weighed less than the average teacher.
17 These schools are not unregulated.
18 These schools are not unaccountable. They're
19 accountable to both state regulations and to
20 parent enrollment demands. They're doubly
21 accountable.
22 Finally, cyber schooling -- schooling
23 is a big part of the future of public
24 education. Cyber schools are pioneering
25 education practices that traditional schools
207
1 are going to adopt in the future.
2 Cyber operators tell me that
3 traditional school principals and
4 superintendents often visit their schools to
5 get ideas. They also don't want that publicly
6 known. But they do it.
7 But there's a lot of neat things that
8 cyber schools are doing, like going beyond the
9 45-minute class schedule and the 8:30 to 3:30
10 school day to better serve the kids.
11 And also not being bound by local
12 labor markets. They can hire to best teachers
13 from all over the state, including some
14 teachers that, quite frankly, can't go the
15 normal school day because of their own child
16 care demands or their own health.
17 As education sector and progressive
18 policy analyst Bill Tucker puts it, just as
19 Apple's iTunes is changing the music industry,
20 over time cyber learning is going to change
21 how we do public education. And I don't think
22 we should get in the way of that.
23 So I would end by just saying, please
24 do not change this law because I'm afraid if
25 you do it, it might hurt the kids.
208
1 Thank you.
2 REPRESENTATIVE MCILVAINE SMITH:
3 Thank you.
4 Representative Beyer has a comment.
5 REPRESENTATIVE BEYER: Do I have a
6 comment? You have been at every cyber school
7 hearing I think we've held.
8 MR. OBERG: Yes.
9 REPRESENTATIVE BEYER: And I'll be
10 honest here. On Tuesday I heard we were
11 talking to the administrator. You're a big
12 guy. I have found you somewhat intimidating
13 but with all due respect I found your
14 sentiment touching. And I'm a mother, too. I
15 have three children. I have a stepdaughter.
16 I have two grandchildren. And I get it.
17 But I just wanted to tell you that I
18 really appreciated your comments, and I was
19 glad to see that side of you, frankly.
20 But I want to speak to the last
21 speaker. I can't help it. You're a
22 sociologist. I can't help it and I'm sitting
23 here and you actually said -- I couldn't
24 believe you would correlate it with any kind
25 of legitimacy. A school district would, in
209
1 fact, save money on construction costs if more
2 children were in cyber charter schools.
3 Because?
4 I mean I can't believe you would say
5 that with your straight face, serious, to this
6 committee --
7 DR. MARANTO: Sure.
8 REPRESENTATIVE BEYER: -- considering
9 we have school buildings across the state that
10 were built in the turn of the century. And I
11 can tell you, I represent Allentown School
12 District.
13 They have just embarked on finally a
14 $250 million bond issue because they have
15 children in schools that are filled with
16 asbestos, they're filled with lead paint, that
17 haven't been renovated for nearly 70 years.
18 Allentown School District has a
19 considerable cyber school population. But
20 that doesn't mean that the building doesn't --
21 still doesn't get renovated.
22 So for you -- for you to do that --
23 and I appreciate your testimony, and I'm going
24 to relook at it, and I'm thinking that maybe
25 you didn't mean to say that. Because there's
210
1 really no correlation to what you're saying
2 and -- and this bill.
3 This bill isn't about that. It's not
4 even about AYP. Because I don't touch the
5 academic side of cyber charter schools. And I
6 don't touch the academic side of the charter
7 schools, and I don't touch the academic side
8 for public schools, because I know we're all
9 confronted with it. I'm not a big, huge
10 supporter of leave no child behind.
11 I mean I get the merits of it, but
12 it's certainly problematic.
13 But I just wanted you to know as I
14 sat here, and I'm willing to take seriously
15 your testimony and I will take another look at
16 it. I just don't see the correlation and
17 that's not at all helpful.
18 Because when you say it's cheaper --
19 and you've said it in your testimony today,
20 it's cheaper to educate a child in a cyber
21 charter school, that's exactly antithetical to
22 what the cyber charter schools are telling us.
23 And, incidentally, they're saying
24 their costs are the same. They're just
25 different. But they're the same. And your
211
1 testimony says something different than that.
2 I just wanted you to know that I've
3 challenged a bit of your testimony.
4 DR. MARANTO: And you absolutely
5 should challenge. But the only thing you got
6 wrong was -- and I'm not a sociologist. I'm a
7 political scientist. Anything else?
8 REPRESENTATIVE BEYER: You said
9 sociologist.
10 DR. MARANTO: I didn't mean to.
11 The -- here's what I'm actually saying. I'm
12 saying that for growing districts that are
13 building new schools, cyber charters are
14 extremely helpful.
15 For declining districts it could be
16 all over the map.
17 What I would say, though, is this.
18 The percentage of kids going to cyber charters
19 statewide so far, it's pretty tiny. It's --
20 it's a blip. It's dwarfed by normal
21 demographic changes.
22 I would say a second thing. I will
23 admit, I do have a kind of bugaboo with school
24 construction and here's why I have the bugaboo
25 about it.
212
1 There have been a lot of studies of
2 the relationship between student
3 learning and -- rather between spending and
4 student learning.
5 Frankly, most of them haven't found
6 anything. The relationship seems to be very
7 weak. In fact, people like Eric Hanushek and
8 Jay Greene have concluded there's almost no
9 relationship. I actually think they're
10 wrong.
11 I think the better research is done
12 by a guy right here in Harrisburg, the dean of
13 the School of Public Policy at Penn State
14 Harrisburg, Steve Peterson. He's a very
15 bright guy. He's done some really interesting
16 work.
17 He finds that most public education
18 expenditures don't seem to -- increasing them
19 doesn't seem to improve student learning, with
20 one very notable exception, which is teachers'
21 salaries.
22 Improving teachers' salaries does
23 seem to improve student learning for logical
24 reasons that we can go into at another time.
25 There's a second thing that I will
213
1 admit I have a bugaboo about construction, but
2 I've been teaching 20 years. Once literally
3 the ceiling fell in on me and, gosh darn it,
4 it didn't change how I taught the course.
5 The -- I have seen local school
6 districts put enormous amounts of energy into
7 getting the school building approved. And
8 I've seen local school districts that frankly
9 have serious problems addressing discipline,
10 serious problems with principal leadership,
11 serious problems in some cases with the
12 curriculum.
13 And you'll talk to the
14 superintendents there and -- that have done
15 that and say, gosh, have you guys looked at
16 this, have you guys looked at this, have you
17 guys looked at this? And they're not, because
18 they're overwhelmed with the desire to build a
19 new building. It's something that does bring
20 the community together, but I think a lot of
21 times it's really stretching.
22 And so I would make the case, we
23 should focus a lot less on bricks and mortar
24 and frankly a lot less on -- a lot more on
25 teachers and instructional materials. That's
214
1 really what drives the educational process --
2 progress.
3 If you're looking at the inputs that
4 seem to matter, that's it. It's not the
5 buildings.
6 Now, it's true, richer districts can
7 afford fancier buildings and they'd also be
8 easier to educate kids, but there's no
9 evidence that the fancy buildings themselves
10 lead to -- lead to more learning. None.
11 REPRESENTATIVE MCILVAINE SMITH:
12 Having been a teacher, I will agree with a lot
13 of the things you just said. And my mom was a
14 teacher for 32 years. So -- but I appreciate
15 your testimony.
16 Does anyone have any other
17 questions? I thank you very much. It was
18 very rewarding, I think, to have all of the
19 testifiers here today. Again, I appreciate
20 the passion. Thank you.
21 (The proceedings were concluded at
22 3:59 p.m.)
23
24
25
215
1
2 I hereby certify that the proceedings
3 and evidence are contained fully and
4 accurately in the notes taken by me on the
5 within proceedings and that this is a correct
6 transcript of the same.
7
8
9 ______Brenda S. Hamilton, RPR 10 Reporter - Notary Public
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25