Robert Burgess, former president of the Michigan School Business Officials association, recently wrote an Op-Ed for The Herald Palladium claiming charter schools spend considerably more on administrative and maintenance costs than conventional public schools.

The Michigan Education Association cited Burgess’ column to echo his claim.

But the claims by Burgess and the MEA warrant a closer look.

Michael Van Beek, education policy director for the Mackinac Center for Public Policy, said Burgess and the MEA’s take implies that charter schools aren’t putting as much into the classroom as other public schools.

But Van Beek points out that charter schools have more instructional employees per pupil than conventional public schools. The pupil-teacher ratio for charters is 20-to-1, versus 22-to-1 for conventional public schools, according to the state’s Center for Educational Performance and Information.

The state Department of Education also said an “economy of scale” benefits conventional public schools over charter schools in financial analyses that are based on per-pupil costs, like the analysis done by Burgess.

“The Michigan Department of Education hasn’t done any significant comparisons of PSAs [charter schools] to traditional districts, but it is our understanding that on average PSAs and other small traditional schools spend more on administration and operations and maintenance than other traditional public schools,” said Michigan Department of Education spokesman Martin Ackley in an email. “[T]here is an inherent economy of scale. A business manager’s salary divided by 500 students is going to yield a greater amount than that same salary divided by 2400 students.”

The average charter school has 470 students, while the average conventional public school has 2,721 students, according to the state.

Buddy Moorehouse, director of communications for the Michigan Association of Public School Academies, also notes that charter schools are not allowed to use a voter-supported millage to fund their buildings. Instead, charter schools usually lease their buildings and put those costs into their administrative budgets, Moorehouse said.

And charter schools and conventional public schools don’t report data in the same fashion.

“Charters simply do things differently, which makes it impossible and absurd to attempt an apples-to-apples comparison,” Moorehouse said.

Gary Wolfram, an economics professor at Hillsdale College, points out the differences in how charter schools and conventional public schools report expenditures to the state.

Wolfram uses an example of a charter school hiring a curriculum specialist. If the charter school uses a private firm to provide curriculum advice, it is considered a “business and administrative expense.” If the charter school hires its own curriculum specialist, it is considered “instructional support.”

“Bottom line is they categorize expenses differently, especially if they have hired a management firm,” Wolfram said in an email.

Van Beek said 84 percent of administrative costs for charter schools were for purchased services, meaning they were not directly tied to administrative payroll, but instead used to contract for services. Charter schools are much more apt to contract for services than conventional public schools, making comparisons even more difficult, Van Beek said.

“Although they offer similar services, charter schools operate very differently than districts in many respects, and painting with too broad a brush with comparing these two types of public schools is tricky,” Van Beek said. “Regardless of how these comparisons turn out, policymakers should be more concerned with whether charter schools are providing parents with what they want, instead of worrying about whether or not they report spending money the same way conventional districts do.”

Atlanta Community Schools (ACS) superintendent Teresa Stauffer insists that her district could obtain equal or better education services for less cost. She and her school district have been feuding with the local ISD over that and other issues for three years. Now the ISD is withholding special education services and the battle is headed to court.

In a lawsuit filed late Monday with the U.S. Eastern District Court in Bay City, ACS is asking the court to order the ISD (Alpena-Montmorency-Alcona Educational Service District) to provide special education services. However, it is also suggesting to the court that the dispute could be resolved if the ISD was ordered to release special education dollars directly to ACS and let the district purchase the services on its own.

“We (the school district) could provide special education for just 17 percent of the two mils for special education our county residents send to the ISD,” Stauffer said. “We could hire the same people to do the job for less. The residents of our district hold us accountable for what we do. All we want is to be more effective for our kids.”

In Michigan, special education funding from local, state and national sources are distributed to the ISDs. But ACS contends that the funding is actually intended for the individual students who qualify for special education programs.

Atlanta is located in the Northeastern portion of Michigan's Lower Peninsula. According to Stauffer, roughly three years ago she started questioning ISD officials about the way the ISD was operating. Although her questions and complaints weren't made public at the time, she says the ISD turned against her.

“Three years ago, when I started asking questions, they (the ISD) took an attitude of retaliation,” Stauffer said. “Then when I started openly questioning their actions and decisions, they started retaliating with attacks against our teachers and staff. Now they're making attacks on our data and students.”

She said the Arenac ISD keeps the ACS student database through an arrangement made prior to her becoming ACS superintendent four years ago. But the data is ultimately sent to the local ISD, which Stauffer said has manipulated it to the determent of ACS and its students.

“I've considered hiring a CPA to do the data,” Stauffer said. “But even then it would have to be sent to them (the ISD).”

Tensions between the ISD and the school district were heightened just prior to the 2009-'10 school-year. That was when the ISD moved to change its agreement (called the “Plan”) with ACS and the other school districts in the area. This required the schools to sign an authorization contract.

Robert Lusk, attorney for ACS, said the authorization contract the ISD is pressing for would usurp the Atlanta district's authority in several key areas.

•  It would authorize the ISD to represent the school district on the planning team that determines what programs and classes the student would participate in.
•  It would authorize the ISD to replace the regular school districts’ role in making decisions regarding individual students in the district's infant home program for preschoolers.
•  It would completely cut out the hearing impaired programs that were part of the original agreement between the ISD and ACS.               

But it would leave the regular school district on the hook for potential costs emanating from due process hearings in which parents dispute school decisions and actions. These costs would be borne by the regular school district even if the costs were the result of ISD decisions from which the regular school district had been excluded.

ACS signed the authorization contract initially but refused to extend it for this year.

“If we had been satisfied with the service we were receiving from the ISD we would have signed,” Stauffer said. “Some ISDs are better than others. I've dealt with a very good ISDs in the past. But this one is the worst I've ever seen.”

According to Stauffer, the ISD claims that when ACS refused to extend the authorization, it abandoned its right to receive the ISD's special education services. However, ACS argues that any changes to the agreement between the school district and the ISD should be negotiated, not forced upon ACS in a take-it or leave-it fashion.

Brian Wilmot, superintendent of Alpena-Montmorency-Alcona Educational Service District (the ISD), declined to comment on the situation. Wilmot said he wanted to wait until ISD officials have had a chance to study the details of the complaint ACS filed.

In its lawsuit ACS asserts that its original agreement with the ISD is still intact and the ISD has no legal right to withhold the special education services. ACS refutes the idea that the ISD has the right to insist that ACS either sign the authorization contract or lose services. In addition, the lawsuit alleges that the ISD's denial of special education services was at least partly in retaliation for Stauffer's public statements criticizing the ISD.

Stauffer first went public with her questions and complaints about the ISD on Sept. 8, 2010, at an ISD board meeting. The initial draft of the ACS complaint includes a summary of Stauffer's remarks.  It reads as follows:

Among other things, Ms.Stauffer informed the [ISD] board that there were occasions when [ISD] personnel had:

• Been untruthful in dealings with ACS personnel;
• Taken actions that were not consistent with the [ISD] mission statement;
• Not communicated with the public in an honest and ethical way;
• Been unwilling to cooperate with ACS staff;
• Failed to provide special education and related and supplemental services in a cost-effective manner;
• Failed to maintain a safe and healthy learning environment; and
• Not taken into account the needs of ACS students.

Nearly a year later, on Aug. 1, 2011, the ISD letter informing ACS of its decision not to provide special education services to the district included references to Stauffer's Sept. 10, 2010, remarks. ACS is referring to that letter in its lawsuit as evidence that the ISD is retaliating for Stauffer's public statements.

More specifically, the lawsuit alleges that the ISD “has coerced, intimidated and threatened” the Atlanta School District and Stauffer for her advocacy.  It also alleges the ISD “retaliated against the parent and student plaintiffs based on the advocacy” of the Atlanta School District and Stauffer.

Part of Stauffer's advocacy includes the stance that school districts should be allowed to shop for the best deals they can get, either from alternate ISDs or through privatization.

“I've spoken to some state lawmakers about allowing ISDs to compete,” Stauffer said. “I think that could potentially provide a lot of cost saving opportunities for school districts.”

The lawsuit was filed in U.S. District Court, Eastern Division of Michigan, Northern Division. The judge is Thomas Ludington. The lawsuit was taken to federal court because ACS claims the ISD is in violation of the federal Individuals with Disabilities Education Act (IDEA), the Americans with Disabilities Act of 1990, the Rehabilitation Act of 1973 and the U.S. Constitution.

ACS claims the ISD is also in violation of Michigan laws. The lawsuit includes Stauffer as a plaintiff, along with three sets of parent and student plaintiffs: Eric and Regina DeRouchie and their minor son T.C., Cynthia Portillo and her minor daughter E.P., and Jason and Jennifer Pryor and their minor daughter K.P.