The Education Gadfly Weekly

A thorough overview of Ohio's teacher evaluation framework

On June 30, Governor John Kasich vetoed forty-four items in the budget  and signed the rest into law. Among the provisions that survived is an extension of “safe harbor” as Ohio continues its transition to new standards and assessments. Last year, lawmakers created this “safe harbor” policy for students, schools, and teachers; it pertains to certain test-based accountability provisions for 2014–15. With the 2015 budget bill, they’ve extended it by two more years (2015–16 and 2016–17).

The safe harbor provisions for students and teachers are pretty straightforward. For students, test scores from the 2014–15, 2015–16, or 2016–17 school years cannot be used “as a factor in any decision to promote or to deny the student promotion to a higher grade level or in any decision to grant course credit.” While not explicitly mentioned, this means that failed End of Course exams won’t equate to lost course credit or failure to graduate.  

For teachers, safe harbor means that the “value-added progress dimension rating” determined by state tests administered in 2014–15 and 2015–16 cannot be used for “assessing student academic growth” for teacher evaluations, or “when making decisions regarding the dismissal, retention, tenure, or compensation” of teachers. There is, however, a provision that allows a school or district to enter into a “memorandum of understanding collectively” with teachers that permits the use of value-added results for evaluations, dismissal, retention, tenure, or compensation. It’s hard to imagine that any district would take advantage of this provision, or that teachers would agree if they did, but it exists as an option. 

The safe harbor provisions for schools, however, are a bit more complicated. The budget text starts by stating that the department of education “shall not assign an overall letter grade…for any school district or building for the 2014–15, 2015–16, and 2016–17 school years and shall not rank school districts, community schools […] or STEM schools” for those years. Schools will still get report cards with grades for overall proficiency and overall growth—plus the same for various student subgroups—as they do now. (Here’s an example of what that looks like.)

It then goes on to say that “the report card ratings issued for the 2014–15, 2015–16, or 2016–17 school years shall not be considered in determining whether a school district or a school is subject to sanctions or penalties.” Despite this, the bill carefully notes that this does not “create a new starting point for determinations that are based on ratings over multiple years.” In other words, schools don’t get a clean slate once safe harbor is over and overall letter grades are assigned. The report card ratings for school years prior to 2014–15 will be combined with new data starting in 2017–18 to determine which sanctions apply.

While lawmakers may have ensured that persistently failing schools can’t permanently duck accountability, there are consequences to instituting even a temporary safe harbor. Delaying the issuance of overall school grades affects quite a few policies, including programs that policymakers took care to address in other parts of the budget. Most importantly, the affected programs are ones that directly impact students receiving a low-quality education in failing schools—making safe harbor risky for the very students it’s supposed to protect. Let’s examine a few of these programs up close.

Voucher eligibility

Since the budget extends safe harbor protections to schools for an additional two years, Educational Choice Scholarship Program (EdChoice) eligibility becomes problematic. Since school grades can’t be used to determine “sanctions or penalties,” Ohio has essentially frozen eligibility for its flagship voucher program. The schools on the eligibility list as of 2014–15 stay on the list (even if they’ve improved), and the schools not on the list stay off (even if they deserve to be on it). Students attending Ohio’s lowest-rated schools simply can’t afford—and shouldn’t be asked—to wait for a chance to move to a better school.

Automatic closure

“Automatic closure” describes the process that takes place when a charter school is permanently closed due to low performance. In Ohio, the law outlines automatic closure differently depending on the age of the students in the school. The criteria for closure are based on school report card grades. Since the budget mandates that schools cannot be given overall report card grades and that the department cannot use report cards to determine whether a district or a school is subject to sanctions or penalties, automatic closure becomes impossible until after the 2017–18 school year.

This is a major setback. Recently, Fordham published School Closures and Student Achievement: An Analysis of Ohio's Urban District and Charter Schools. Accompanying this report was a working paper that evaluated the student achievement effects of closures stemming from the automatic closure law. The authors found that students displaced by an automatic closure made significant gains in math and reading after their schools closed. As my colleague Aaron Churchill writes, “This suggests that Ohio’s automatic closure law has worked as intended; it forcibly shut down some of the worst-performing schools in the state, to the benefit of the children who had attended them.” This is strong evidence that there’s little to be gained—and much to lose—by playing games with automatic closure.

Parent trigger

This law was passed in the 2011 state budget as a pilot program for Columbus City Schools (CCS). According to the law, any school operated by CCS that is ranked according to performance index score in the lowest 5 percent of all public school buildings statewide for three or more consecutive schools years is eligible for parent trigger action. (For more on the parent trigger in Columbus, see here.)

There were twenty-one Columbus schools eligible for the parent trigger as of last September. This year’s report cards may have placed more or different schools on the list. However, since the budget makes it impossible to rank schools until 2017–18, the possibility of a parent trigger remains only for the twenty-one schools that were already eligible. While this isn’t as critical of a freeze as voucher eligibility or automatic closure for charters (since it applies only to Columbus), it still represents another pause on accountability for persistently failing schools.

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While the safe harbor provisions in the budget are well-intentioned, they have created consequences—especially as they relate to a few of Ohio’s key school choice policies. Among these policies, the voucher eligibility issue must be addressed as soon as possible. Students in failing schools have the right to access the best education possible via a voucher. (Plus, there are a ton of success stories.) Policymakers should waste no time this fall in adding amendments that clarify voucher eligibility. Otherwise, far too many students will be stuck in failing schools. 

Nominally, private schools (or “chartered nonpublic schools,” as they are known in the Ohio Revised Code) operate with a minimal amount of state oversight. Practically, however, there is a long history of state involvement with them. In exchange for added oversight, private schools receive transportation services for students (or parents can receive payment in lieu of transportation) through the district in which they are located; they can also seek state reimbursement, also passing through the district, for costs like textbook purchasing and school administration. Since Ohio began voucher programs in 1996, the bond has become even stronger.

On June 30, 2015, Governor John Kasich signed into law the new biennial budget (House Bill 64), which included a number of provisions impacting private schools. Here is a review of the most significant provisions.

Auxiliary Services (AS) and Administrative Cost Reimbursement (ACR)

As boring as their names may sound, these budget line items are the primary mechanism by which the state and private schools interact. Chartered nonpublic schools can request and receive reimbursements for textbooks, diagnostic/therapeutic/remedial personnel services, and “educational equipment” through the AS process. Transportation services provided to private school students are also funded via the AS line item. The amount available to private schools will go up 4.37 percent in the first year of the new biennium (fiscal year 2016) to approximately $144.3 million and 3.92 percent in the second (FY 2017) to approximately $150 million. Additionally, the per-pupil cap on AS will rise. The same goes for the ACR, which provides reimbursement for the administrative and clerical costs associated with mandated services incurred by private schools (although paid a year in arrears). Modest increases in the ACR will occur in both years of the biennium as well—up to approximately $65.2 million in FY 2016 and $67.7 million in FY 2017.

Voucher funding

Vouchers, defined as “scholarships” in state law, provide state funds for tuition assistance to eligible families who choose to send their children to private schools or educational providers. The funding levels for four of Ohio’s five voucher programs will see increases for the 2016 and 2017 fiscal years.

• The original EdChoice Scholarship program—for students attending chronically underperforming district schools—will see its first statutory increase in program history:

              - For grades K–8, it rises from $4,250 to $4,650 per student per year.

              - For grades 9–12, it rises from $5,000 to $5,900 per student for the 2015–16 school year
                 and to $6,000 per student per year for 2016–17.

• The newer version of EdChoice—for low-income students regardless of school assignment/attendance—also will increase from $4,250 to $4,650 per student per year.
• The Jon Peterson Special Needs Scholarship rises to a maximum of $27,000 per year for students with the highest educational needs.
• The Ohio Autism Scholarship rises from $20,000 to a maximum of $27,000 per student per year.

As we celebrate these increases, it is important to note that in many cases, the maximum funding levels for vouchers are still far less than the tuition levels at many private schools; these sometimes run upwards of $10,000 per student per year (especially in high schools). Schools accepting voucher students are forbidden from charging the neediest families (200 percent of the poverty level or below) for any tuition gap, and they can offer some form of service in lieu of payment to families above that level. In practice, the larger the gap, the less likely a private school is to open its doors to voucher students at all.

Voucher use and eligibility

While the funding levels for the Cleveland Scholarship Program (CSP) did not change—the high school amount was previously raised for the FY 2013 and FY 2014 budgets— the program was expanded geographically to allow voucher recipients to attend three additional private schools in Cleveland suburbs.[1]

The original EdChoice Scholarship program, however, bases eligibility on attending or being assigned to attend a low-performing school (with some additional intricacies). You can read a more detailed discussion elsewhere in Ohio Gadfly Daily of what significance the budget’s wide-ranging “hold harmless” protections for district schools from “sanctions or penalties” will hold in terms of voucher eligibility. But the bottom line is that eligibility for the state’s largest voucher program is frozen in place—no new schools will become eligible until the EdChoice program begins accepting applications for the 2018–19 school year. By the same token, currently-eligible schools can’t improve their way off the list until then either, which runs counter to the purpose of the scholarship: improving schools will lose students when they shouldn’t while students in real need of a better choice will once again be denied.

However, the newer income-based eligibility for EdChoice continues unabated, adding a grade level each year as per its initial structure. Second graders will be added to eligibility in 2015–16, and third graders will follow in 2016–17. Hopefully, participating private schools will continue to adjust their outreach accordingly.

High school policies

The budget bill addresses a few issues that affect private high schools and their students. First, the bill exempts all nonpublic high school students—voucher and non-voucher—from the end-of-course exams now required for high school graduation. Instead, it allows schools to substitute a test of their own choosing (from a list to be approved by the Ohio Department of Education). This allowance means that a different set of graduation requirements will be implemented for students attending private schools.

Second, Governor Kasich’s veto pen removed a provision added by the legislature that would have kept private schools from participating in Ohio's College Credit Plus program, which provides opportunities for high school students to earn graduation credits and college credits simultaneously.

Analysis

The long-term support of state policymakers has created an environment that has allowed nonpublic schools to educate more than 175,000 Ohio students this past year. State funding, in the form of AS and ACR reimbursements, has long supported services deemed vital to students even as they pursue education outside of the public schools. The new state budget only reinforces that notion by bumping up the AS and ACR amounts. Also to their credit, state lawmakers bolstered the voucher programs by increasing the value of the scholarships and modestly expanding eligibility. The considerable—and long overdue—increase in dollar value of the special needs vouchers will help to ensure that more students with significant disabilities have the opportunity to receive the educational services they absolutely deserve.

But the level of accountability for public dollars is a different kettle of fish. Are students on vouchers actually receiving a better education than they would have in their home districts? There is some cursory data, but the true answer is that we just don’t know yet. Private school students, including those on vouchers, can now graduate high school by passing assessments of the schools’ own choosing. It’s possible that these assessments will be less demanding than the state’s EOC exams. Either way, this policy change seems destined to give us even less information with which to craft meaningful comparisons.

This isn’t necessarily a problem in schools where the rigor of curriculum and assessment exceed those of the state—and there may be many of them—but there’s little transparency with which to make that judgment. Perhaps it’s time for state lawmakers and the Ohio Department of Education to consider making more robust information available about school level student outcomes, at least when it comes to schools participating in one of the voucher programs. The information is currently limited to proficiency scores, which are often misleading when students come to their school years behind academically. How can policymakers account for this? It may be time to include a measure of student growth (also known as value added) for private schools with voucher students that more accurately portrays a school’s educational effectiveness.

It may also be time for policymakers to consider consolidating and simplifying the disparate voucher programs. Having five separate voucher programs—more than any other state in the nation—is a sign of Ohio’s commitment to school choice. But it raises questions as well: Does it make it harder for parents to navigate their many options? Do differing program requirements and eligibility parameters make it confusing? Do multiple programs make it more difficult administratively for private schools to participate in the programs? Finally, are there benefits to having separate programs? The often overlapping programs, variable funding amounts, and differing requirements have almost certainly become an increasing challenge for all involved. More importantly, the impact is likely greatest on parents and families intended to benefit from the programs.

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Kudos to Ohio policymakers for their long and continuing history of supporting private school choice. Here’s hoping they continue to focus on expanding access while ensuring that Ohio’s voucher programs provide high-quality options to students around the state.

Charter schools joined the usual suspects—tax reform, school funding, and Medicaid—as one of the most debated and well-publicized issues of this spring’s legislative session. If you’ve followed the issue, that probably doesn’t surprise you. After all, Governor Kasich, President Faber, and Speaker Rosenberger all announced their intentions early in the year to tackle charter school reform. The result was three strong pieces of legislation (House Bill 64, House Bill 2, and Senate Bill 148) that sought to improve the charter sector. When the legislature recessed for the summer, only HB 64, the state’s biennial budget bill, had passed. (HB 2 and SB 148 won’t be analyzed here, as they’re still pending in the legislature.)

When Governor Kasich’s team rolled out HB 64, it contained a host of charter school reforms. The focus was on strengthening the Ohio Department of Education’s ability to oversee charter school sponsors. It built on the department’s recently implemented sponsor evaluation system and instituted a series of sanctions and incentives for sponsors in an effort to drive improved student achievement at the school level. The proposal also included a series of what could best be categorized as “good government” reforms like eliminating conflicts of interest, increasing transparency, and strengthening the independence of charter school governing boards. Finally, the bill also addressed some of the funding disparities afflicting charter schools.

Of course, it’s not how a bill starts that matters, but how it finishes. The House decided to remove most of the substantive charter school reform measures from the budget bill and place those with which they agreed in their standalone charter school legislation (HB 2). The House was right to focus on charter policy in a separate bill where the proposals could receive thoughtful and deliberate consideration and deal with charter fiscal issues in the state budget. (This type of deference to the single subject rule is rare and commendable.) More pruning of HB 64’s charter provisions occurred in the Senate and in conference committee.

Now that the dust has settled and HB 64 has been signed into law, let’s take a look at how it will affect charter schools.

On the funding side, the base per-pupil allocation for charter school students (matching the increase for district students) was increased from $5,800 in the current fiscal year to $5,900 in FY 16 (an increase of 1.72 percent) and $6,000 in FY 17 (an increase of 1.69 percent). While it doesn’t address the tremendous funding disparity (charters receive 22 percent less funding statewide and around 40 percent less in some urban areas) that Ohio charter schools face, it’s desperately needed given the relatively low per-pupil funding amounts received by charters. Another funding provision, tied to the governor’s efforts to incentivize high-quality sponsors, allows local school districts to include charter schools whose sponsors have been rated “exemplary” in local tax levy requests. It’s conceivable (but unlikely given the poor relationship between many school districts and charter schools) that some districts looking holistically at the need to create high-quality seats will avail themselves of this provision and partner with top charter school networks (much like what has happened in Cleveland).

The funding inequity that charter schools face in general operations is exacerbated by the lack of adequate facility funding. The budget took significant action to address some of these challenges, particularly for high-performing charter schools. First, it increased the per-pupil facilities funding for all charter schools from $100 in FYs 14 and 15 (which was the first time that charters had received any per-pupil facilities funding) to $150 in FY 16 and $200 in FY 17. The bill also provided, somewhat paradoxically, $25 per pupil to online charter schools for “assistance with the cost associated with facilities.” This is the first time that Ohio has provided facilities funding for online charter schools. The funds will likely be used for costs tied to the physical locations needed to conduct student testing.

High-performing charter schools benefit on the facilities front from HB 64 in a couple of ways (“high-performing” is defined as schools with an A, B, or C grade on the state’s performance index and an A or a B in value added^[1]). First, they are able to apply for facility support from a newly created $25 million funding pool. In addition to being high performing, applicants will need to provide matching funds on a one-to-one basis. This requirement has the potential to leverage business, community, and philanthropic sources in support of improving charter school facilities. In addition, while charter schools already get the right of first refusal when districts make unused facilities available, high-performing charters will now get first priority among charter applicants. While this development is likely to be accompanied by some controversy, a strong case can be made that a limited resource—like an unused public school building—should be allotted based upon merit rather than random chance.

HB 64 also included a few miscellaneous charter-related provisions worth noting. First, charter schools that are high-performing or have an exemplary sponsor have the option to provide pre-K services. In the past, Ohio charters haven’t been able to serve students before they reach kindergarten. (Of course, according to this new report, neither have many other states.) This could provide better pre-K options for Ohio’s youngest students. Second, the bill creates a task force to study and make recommendations around transportation issues for traditional public schools, public charter schools, and private schools. Transportation is an issue that continues to be a sore spot for every type of school, so progress on this front could benefit all sectors. Finally, the bill requires the Ohio Department of Education to conduct a feasibility study on establishing charter schools around the state that are focused on gifted education. As longtime champions of gifted education, we feel that this is an idea worthy of consideration—especially at a time when tens of thousands of students who are identified as gifted aren’t provided gifted services by the traditional public schools they attend.

All in all, HB 64 should make it a little easier for all charter schools to make ends meet, and much easier for high-performing charter schools to secure and fund facilities. Now that the fiscal challenges faced by charter schools have begun to be addressed, it’s time for the governor and General Assembly to turn their attention to the unfinished business of substantively improving Ohio’s charter policy environment. Only then can Ohio begin to rebuild its charter school reputation.

Trailing only Medicaid, school spending is the second-largest public expenditure in Ohio’s $65 billion annual budget. Over the next biennium, the state is slated to spend $12 billion per year on education (including $2 billion per year in federal funds administered by the state), on top of $8 billion per year raised via local property taxes. Altogether, annual education expenditures will clock in at around $11,000 per student.

The bulk of state education spending—$7.4 billion in fiscal year 2016 (FY 16) and $7.7 billion in fiscal year 2017 (FY 17)—is sent to districts via block grants, meaning that districts can allocate funds as they choose. The value of the block grant is determined by a funding formula. FY 16’s formula aid represents an increase of 4.9 percent relative to FY 15, and the amount in FY 17 adds another 4.2 percent on top of that. These are generous increases, especially since statewide enrollment is slightly declining; they also exceed the recent rate of inflation.

Without a doubt, Ohio taxpayers are making big financial contributions to education. But one of the perennial (and perplexing) questions is whether taxpayer dollars are being properly allocated. Oftentimes—and this spring was no different—funding debates devolve into “school funding fights,” particularly after budget projections reveal that not every district will receive more money. This usually leads to legislative scrambling to dole out more dollars everywhere.

Is there a strategy for ending the seemingly endless political wrangling over school funding? In my view, there is a way forward. In broad terms, here are three interrelated ideas that could move Ohio toward a clearer and more student-centered funding arrangement in the coming years.

1.       Simplify—and create more transparency around—the funding mechanism

Historically, and to this day, Ohio has allocated state funds based on the characteristics of districts. Like many states, Ohio employs a formula to determine the capacity—and thus the amount of state aid—of an entire district. (Higher-capacity districts with more local resources receive less aid, and vice versa.) The formula, however, is an elaborate assortment of economic variables that approximate the actual needs of students in a district. Meanwhile, the Byzantine nature of the formula also makes it extraordinarily difficult for the public to grasp how billions of education dollars are being distributed, rendering the formula subject to exploitation by the few insiders who actually understand how it works (a small change here or there can substantially alter the funding results).

To illustrate this complexity, the table below provides a high-level overview of how the “opportunity grant”—the largest of the twelve formula components—is calculated. The details of the funding formula are set out in state statute (e.g., ORC 3317.017 and 3317.022). Bear in mind that several other components of the formula, particularly the “targeted assistance” and “capacity aid,” are just as intricate as the computation displayed below.

Table 1: The Opportunity Grant calculation for FY 2016–17

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2.       Refine the weighted student funding amounts

Lawmakers should determine the proper amount of funding for students with varying characteristics and needs. To their credit, state policymakers already have a good deal of this infrastructure in place. For example, the state has set incremental funding amounts above and beyond the core per-pupil formula amount of $5,900^[1] for children with disabilities, English language learners (ELLs), and career and technical education (CTE) students. (For district students, the core and incremental amounts are adjusted based on their districts’ economic traits, as described above.) For example, ELLs who have been enrolled in a U.S. school for fewer than 180 days are funded at $1,515 above the core amount.

But further refinement of the weighted funding system is necessary. The most urgent task is to better distinguish between students from severe economic disadvantage and those from more modest disadvantage. Currently, Ohio bases incremental funding on a binary “economically disadvantaged” (ED) variable. (In FY 16 and 17, the amount is $272 per pupil, prorated depending on the district.) Yet ED captures half of Ohio students—including a good portion of lower-middle class children—while census data reveal that about one-quarter of Ohio children actually live in poverty.^[2] A potential starting point is to simply identify students eligible for free lunch versus those eligible for reduced-price lunch, thus creating a third income category for funding purposes. State policymakers might also explore more sophisticated data collection that could more closely link a student’s actual family income with a weighted funding amount.

Other tweaks could include creating other student categories. Why only provide incremental amounts for CTE students? What about for advanced or gifted children who may need enrichment beyond typical school offerings? Perhaps the state could also provide additional allotments for students who have been homeless or serially mobile, categories that can already be tracked in the state’s data systems. Combined with a funding model that drives funds to students’ individual schools, a carefully constructed weighted student funding system could be a powerful tool to ensure that children have the opportunities they deserve.

3.       Insist that funds follow children to the schools of their choice

Finally, state lawmakers should truly operationalize a “funds-follow-the-child” principle. It is true that state dollars generally follow the child at a district level (such as when students transfer across districts). But when state funds—and local property tax dollars—reach district treasuries, funding usually fails to follow the child to her school. The result is inequitable funding across individual schools (even within a district), as economist Marguerite Roza and others have pointed out. For example, a district may receive $15,000 in state funds to educate a special needs child, but we cannot be sure that those dollars actually arrive at the school she attends.

Yet another egregious example of funds failing to follow the child happens when she attends a charter school. In this case, property tax revenue collected by the district fails to follow the child to her non-district public school. (Virtually every Ohio charter receives zero local revenue, though the budget bill includes a provision that could open more opportunities for funding access.) Due to these distortions, state leaders should consider stepping in to ensure that public funds travel with students to the schools of their choice, whether district or charter. Taxpayer funds should be considered an entitlement for students and their families—not districts.

What to do? It’s time to shift instead to a school-centered approach to education funding. Instead of allocating funds based on district characteristics, why not base it on the needs of our education providers—individual schools? (Florida has adopted a law that better ensures funds reach schools.) Meanwhile, now that we have real-time data systems, why not fund individual schools based on the students (and their characteristics) who attend each month? While a school-centered approach is sure to be controversial—we may also need to rethink the roles of districts—it would be a more efficient and more transparent method of allocating education funds. Perhaps just as importantly, it would also ensure that an appropriate amount of funding actually reaches the building-level leaders whose decisions, including budgetary ones, can make a difference in children’s lives.

Conclusion

The amount of public investment in public schools is hefty by any standard—$20 billion per year when local, state, and federal contributions are accounted for. But while state lawmakers have made improvements to school funding policies in recent years, much more work remains to be done, especially when it comes to how these educational funds are allocated and the transparency around the funding formulae. In the coming years, state policymakers should create a simple and transparent funding model; they should continue to refine its weighted student funding structure; and they must ensure that taxpayer dollars are following children to the schools they attend. Overhauling school funding will be tough work, but an efficient funding structure will better ensure that all students have the resources they need to achieve.