Teachers' Union Fails Accounting 101

In an attack on the bill that would allow more charter online cyber schools, the American Federation of Teachers Michigan union claims that a private company that provides curriculum for charter cyber schools made $522 million in profits in 2011.

In fact, K12 Inc. had total revenues — not profits — of $522.5 million, and a net income of $12.8 million, according to MarketWatch.

“They are just confusing revenues for profits,” said Michael Van Beek, education policy director at the Mackinac Center for Public Policy. “It blows up their argument that this company is going to make hundreds of millions of dollars in operating these schools.”

Louise Somalski, legislative coordinator for the AFT-Michigan didn’t return messages left at her office.

Senate Bill 619 was passed by the Senate with a 20-18 vote on Oct. 27 and expanded the number of cyber schools available. Cyber schools are also called virtual schools that provide education over the Internet. Last month, the State House passed SB 619 by a 56-54 vote. The bill will be sent back to the Senate for a concurrence vote. Then it would go to Gov. Rick Snyder to be signed into law.

The AFT also says that the bill creates a limit of 900,000 students over 30 cyber schools in two years, which could drain $7.2 billion from the School Aid Fund. The bill passed by the State House was amended to have a statewide cap of 32,000 students in five years.

“One thing that’s odd is that AFT fails to understand that lifting the cap does not force any student to enroll in these types of schools,” Van Beek said. “They only do so by choice and only if they feel they’re a better option than the school they’re assigned by the state. Why would AFT assume that hundreds of thousands of families would opt out of the regular brick-and-mortar schools they currently attend?”