THE COLUMBUS DISPATCH
The big charter-school reform bill pending in the Ohio House would take steps toward curbing for-profit charter operators from keeping furniture and equipment bought with taxpayer money.
But it doesn’t directly address the issue.
The Ohio Supreme Court ruled last week that White Hat Management Co., run by Akron industrialist and major GOP donor David Brennan, owns the classroom equipment bought under terms of its contract. Ten of White Hat’s former schools had sued, arguing that the company violated its financial duty to the schools.
“The legislature has enacted statutes that take a laissez-faire attitude toward operators of community schools,” Justice Judith Ann Lanzinger wrote in her majority opinion.
State legislators hope to change that with House Bill 2, a package of wide-ranging reforms of Ohio’s heavily criticized charter-school laws. Although the bill does not specifically address for-profit operators owning taxpayer-funded equipment, supporters say some provisions will make such agreements far less likely.
The bill would require operators and boards to specify property ownership in all new and renewed contracts. The bill also would ensure that fiscal officers are independent of operators, and it would require more transparency from those serving on charter boards.
“If you’re an independent board, and you’re putting everything you own and don’t own down in writing ahead of time, you’re much more likely to make a decision that is not going to result in a bad outcome,” said Chad Aldis of the Thomas B. Fordham Institute, which supports school choice and sponsors 11 charter schools in Ohio.
House Republicans also note that House Bill 2 would repeal a law that allows management companies to overrule the governing board; the change would strengthen the board’s control when it crafts operator contracts.
Sen. Peggy Lehner, R-Kettering and chairwoman of the Senate Education Committee, agrees that the bill “goes a long way” toward addressing future ownership of furniture and equipment. “But I am open to explore whether that goes far enough.”
The House returns to session next week and is expected to send House Bill 2 to a conference committee, where the House and Senate work out final changes.
“The court very appropriately decided that there wasn’t enough protection in the Ohio law to prevent the sort of mischief that has gone on,” Lehner said. “That has been the premise of House Bill 2 all along,”
Lehner said she is exploring more-direct language that would no longer allow an operator to take possession of furniture and equipment bought with taxpayer dollars. But it couldn’t apply to all capital purchases, she said, because a number of boards cannot afford to buy buildings and rely on the operators to arrange for the facility.
“They could add one sentence to this bill if they chose to,” Aldis said. It would read that desks, textbooks, furniture and technology shall always revert back to the charter-school board.
Liberal advocacy group ProgressOhio wants more-direct language.
“The Supreme Court justices invited the General Assembly to fix this problem,” said Sandy Theis, ProgressOhio executive director. “They have an obligation to do it.”
House Republicans have said they would like House Bill 2 to be finished by mid-October, and they released a list of 10 proposed changes to the bill. The Senate has not objected to the proposals.
However, concern remains that there could be a push for other changes, such as diluting provisions that limit sponsor-hopping and require operators to publicly disclose more-detailed spending.
Operators, including some large for-profit companies, can collect more than 90 percent of a charter school’s state funding to handle day-to-day operations.
Lehner said she is “picking up some chatter” of pushes by one or more charter-school lobbyists to alter those provisions, and House GOP leaders are not denying that they also could push for changes. Lehner said the provisions are important pieces of the bill “and not something I would support amending.”
“It would be a really big mistake to materially water down the bill.”