April 16, 2015

Improving Charter School Quality in Michigan: Measure Twice, Cut Once

By Bellwether

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Michigan has a problem with charter school authorizing. In February, Education Trust Midwest (ETM) released a report, Accountability for All, on Michigan’s challenges in quality charter school authorizing. Many of the issues ETM identifies showed up again in the report released by the Coalition for the Future of Detroit School Children a couple of weeks ago. Some closely resemble those in Ohio, which my colleagues and I analyzed late last year.
The bottom line is that authorizers in both states approve too many schools with low chances of success and allow too many poorly performing schools to persist.
ETM’s Accountability for All includes a number of insights about authorizer quality in Michigan. The report is the culmination of two years of collecting and analyzing data and provides important transparency about the performance of various authorizers’ school portfolios and how authorizers make key decisions:

  • Which authorizers only approve new charter schools that are likely to succeed?
  • Which authorizers have built portfolios that offer kids good or better school options?
  • And which authorizers continue to authorize schools that have consistently failed to improve?

The result of this analysis is an A-F authorizer scorecard for 16 of 40 authorizers in the state. The 16 authorizers oversee charter schools that educate about 96 percent of charter school students in the state. (The other authorizers lacked the necessary data to be included, because the schools they oversee are either too new or too small to be counted in state accountability systems.) Here’s the breakdown:
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This distribution of authorizers aligns with widespread concern in Michigan that the charter sector has not outperformed district-operated schools. Accountability for All puts significant new data on the table and gives Michigan policymakers and practitioners a problem to solve.
But here’s where I get nervous. The authorizing problem is important, but if I’ve learned anything about charter schools it’s that authorizers are just one piece of a very large and very complex puzzle.

Authorizing—good or bad—doesn’t happen in a vacuum. It is influenced by a whole host of policies and practices. In our analysis of Ohio’s charter school law, we unearthed numerous policies that had a direct or indirect effect on the quality of the charter school sector and how authorizers responded. Funding mechanisms, charter board independence, operator accountability, appeals processes, and bothersome loopholes all contribute to charter quality.
Education Trust Midwest rightly identifies authorizers as a linchpin of charter school quality. But policymakers must consider authorizer quality within the larger policy context.
For starters, authorizers are not the first or only line of defense in charter school accountability: There is a temptation to vest 100 percent of charter school oversight in the hands of authorizers. But authorizers are only one layer of charter school accountability. ETM’s report notes that management organizations operate 80 percent of Michigan charter schools. Charter schools’ boards sign management contracts with these operators to run their schools and are responsible for holding them accountable for school quality. Unfortunately, these boards too often lack the necessary expertise or independence. It is essential to support effective board practices so that they can govern, intervene, and address concerns quickly—before they even get to the authorizer.
Second, authorizers operate with multiple, competing incentives. ETM notes that Michigan authorizers “receive 3 percent of public funding for each school they authorize, regardless of quality.” However, as we note in our Ohio report, an authorizing fee is often an effective mechanism for making sure authorizers have adequate funding to oversee the schools in their portfolio—funding increases as the number of schools increase. It’s not a perfect mechanism (it doesn’t account for economies of scale) but the fee itself isn’t what creates the bad incentives. Instead, it is the ability of an authorizer to use that fee to support organizational functions other than school oversight. When an authorizer must use authorizing fees for authorizing functions, however, the fee becomes neutral. This can mitigate bad incentives for organizations to use authorizing as a revenue stream.
Third, state oversight of authorizers is the big-red-button option and should be weighed very carefully. In states like Ohio (and perhaps Michigan) policy imbalances have fostered a subpar charter sector. In Ohio, this included too many authorizers, operating with perverse incentives; the prevalent practice of sponsor hopping by low-performing schools; and significant loopholes for the politically connected. Here, there is a role for a state entity (perhaps not an SEA) to intervene and shut down authorizers that are acting badly. But there are also numerous other policy levers that can help align incentives and rehabilitate a state’s charter school sector. State oversight should be an absolute last resort. As traditional districts demonstrate all too well, it is by no means the silver bullet to school accountability and performance.
Education Trust Midwest deserves credit for shining light on Michigan’s charter authorizers and their important role in charter quality. But based on our experience with Ohio, this is just the opening chapter of the story. Now we have to figure out the “why.”
It took our team months of digging through statutes and regulations, studying contracts and other official documents, and interviewing policymakers and practitioners to better understand what was happening in Ohio.
Michigan policymakers can help ensure a high-performing charter sector, but they should act only when they have as comprehensive a picture as possible of the many moving pieces involved.

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