Privatization of Public Education: The good, the bad, and the reality

Many charter school opponents have complained about the privatization of public education. There are two forms to this argument. One is against charter schools, in general, as "private" entities. This is not quite true because non-profit organizations are public entities and have no owners and are accountable to the public. In fact, they are often accountable at both the state and federal levels as they usually must file the federal form 990 (A report of a Not-for Profit Entity).

The stronger, and understandable, argument is against for profit management companies that do not own charter schools (despite the letter from Imagine Academy CEO Dennis Bakke). These management companies are not the schools in themselves, but often act in such as way that they run the school and employee all of the employees. In the state of Colorado, there is often additional scrutiny of schools applying for charters with an Educational Management Organization (EMO). The reason is that there is a conflict of interest that authorizers want to mitigate. However, conflicts of interest are opportunities for, not guarantees that there will be, malfeasance. In almost every situation in life, there are conflicts of interest. We try to mitigate them by having balances of power or differentiation of duties or we disclose the conflicts or we disallow someone from having a vote in the final decision. Therefore, it seems there is no reason to immediately preclude a management company. On the other hand, it does seem worthwhile to be open about the conflicts and determine ways to mitigate those risks without eliminating EMOs from competing in the educational marketplace.

First, if readers are ideologically opposed to EMOs, then no argument that I will make can assuage them. I can only ask those of you in this camp to open your mind to the idea that whatever provides the best education within the budgets that states make available is the right choice. There are only a couple of good measures of an effective education system, and it isn't that the system is both publicly funded and government run.

Second, public education is not the same as government education. Public education means that the public funds the education. This is a hallmark of the U.S. education system. However, this does not mean that the government has to be the one who employs the administrators, researchers, teachers, custodians, bus drivers, and others as it currently does in most cases. In plenty of cases, government hires out contracts to those who can do the job best. When the government wants to build a road, it doesn't hire a bunch of road designers and builders. It contracts those jobs to those who have expertise. In fact, it requires that companies compete for those contracts. There is no good reason that education can't be the same way. That is the view of many of us, including those of us who support charter schools.

Third, the salary of the person who runs the school isn't necessarily wrong or right based on comparisons to other leaders of schools. If a person is a mediocre or poor superintendent, then it isn't fair to compare salary to an excellent superintendent even if the districts have about the same number of employees and students. In the same way, it isn't fair to compare a charter school management organization leader's salary to a district superintendent purely on number of students or employees or most other measures used. The measure should relate to performance of the EMO system. The public has a right to demand this, but the more relevant factor even than CEO salary is the total cost charged to the school by the management company. In other words, there is no right or wrong "price" until we look at performance.

Fourth, EMOs do have a conflict of interest. They have both an interest in educating students and in making a profit for their owners. It may be that their owners are benevolent and are not interested in making large profits, but only those reasonable to support themselves and their employees. On the other hand, there is nothing that says that owners are or will be benevolent.

Fifth, as public schools, charter schools run by EMOs are responsible to make sure that EMOs do not charge them more than is necessary to run the school effectively. Here is the rub and the first level of accountability for EMOs. The local charter school must have a board of directors that holds the EMO accountable from day one. The local board must ensure that the EMO provides both reasonable costs for administration and superior educational materials and training. This is the first way that a conflict of interest is mitigated.

Sixth, the authorizer must oversee the school closely enough to monitor some high level metrics, such as cost of EMO services and student achievement. Another measure might be to monitor loans from the EMO to the local charter school. Given that authorizers in most states are looking more closely at charter school results, both academic results and financial results, the key way of mitigating EMO conflicts of interest are begin taken care of. EMOs that do not provide great service over the long run will go out of business. As with traditional public schools, there will be abuses from time to time that don't get caught until after the fact, but this will not be the majority of EMO run schools.

The truth is that the fear of privatization is just that, it's fear. I've heard some say that fear is "false emotions appearing real." In the arguments against privatization in public education the approach taken is either a scare tactic or it's based on an ideology that opposes privatization of any kind. The fact is that unless one is predisposed against privatization of any kind, that as long as their are authorizers who take their jobs seriously, there are precautions being taken to mitigate conflicts of interest. I find it unlikely that there are any who would support the government eliminating private companies building highways, so why eliminate private companies running schools?

Let's not kill the future because of fear. Let's let the EMOs have their chance to prove their models. If they aren't successful, then let's put pressure on the authorizers to get rid of them or fix them. However, if they are successful, let's copy them. Let's use them to their fullest. Most of all let's let them have their chance to see what reality brings.