Big business grows from shared classes

By CHAD LIVENGOOD –

  • Public schools have created a $ 100 million business educating private school and homeschooled students
  • Gov. Rick Snyder has proposed capping “shared time” enrollment at 5 percent per district to cut costs
  • Schools argue that shared-time programs have helped counter effects of declining enrollment, budget cuts

A small group of public schools in Michigan that wrestled for years with declining enrollment, stagnant state aid and budget deficits have made a business worth more than $ 100 million out of educating private school and homeschooled students at taxpayer expense.

Enrollment in a state program known as “shared time” in which public schools teach elective classes to non-public school students has soared by 174 percent in the past eight years after Gov. Rick Snyder and the Legislature loosened restrictions.

Now, Snyder wants to rein in the programs as the cost of subsidizing elective courses in private schools and online classes to homeschool children is expected to balloon next year to $ 135 million, depleting the pool of available funds for all Michigan schools. It amounts to about $ 90 for each of the 1.46 million children in Michigan’s public school systems.

The program was created to spur innovation and offer classes that would otherwise be inaccessible at some schools. But its expansion is also taking money from a finite pot at a time when Michigan’s public schools are falling behind the nation.

Brighton and Berkley’s school districts have built the largest enterprises providing private schools with instructors who teach art, music, foreign language, physical education and advanced placement courses inside parochial and private school classrooms across Southeast Michigan — and beyond. The schools providing the classes take a prorated share of those students’ $ 7,800-per-student in state aid.

Brighton Area Schools has the state’s largest program, teaching courses to students in 173 school districts across 23 counties. The district has agreements with private schools as far away as Bay City, Midland and rural Muskegon County, according to a Crain’s analysis of state enrollment data.

Berkley’s shared-time program extends to students living in 114 school districts and a dozen counties in southern Michigan.

This use of public dollars for educating parochial school students, which has been upheld as constitutional by the Michigan Supreme Court, has allowed the private schools to tap taxpayers to pay for elective courses while allowing public schools to receive the financial benefits.

“Brighton and Berkley have just figured out they can be a staffing agency for these private schools,” said Craig Thiel, research director at the Citizens Research Council of Michigan.

Shared-time students now account for 24 percent of Brighton’s 7,900 students and 26 percent of Berkley’s nearly 5,700 students.

A Crains analysis of shared-time enrollment data shows 57 percent of 102,000 private school and homeschool students in shared time are taking classes through 15 school districts. Brighton and Berkley combined have 20 percent of the shared-time students.

Across metro Detroit, the school districts in Clarkston, Oxford, Avondale, Redford Union, South Redford and Madison Heights have shared-time programs that exceed 10 percent of their total enrollment. Madison Academy, a charter school in Flint, gets half of its 822 students through shared-time, enrollment data shows.

“It wasn’t intended to, in some cases, approach 10, 20 or 30 (percent)” of enrollment, State Budget Director John Walsh told Crain’s. “We believe this has grown beyond anyone’s expectations, certainly the governor’s.”

Snyder has proposed capping shared-time enrollment for districts at 5 percent, slashing the cost by half to $ 67 million and prohibiting public schools from offering kindergarten classes to non-public school students.

Minecraft classes

The Snyder administration has also taken aim at some of the courses being offered through shared-time agreements.

Oxford Community Schools, which gets 14 percent of its students through its shared-time program, has course offerings for homeschool students including classes in horsemanship, archery, dodgeball and the video game Minecraft.

Center Line Public Schools offers homeschool students courses in fencing at Renaissance Fencing Club in Troy, a class in outdoor survival skills and a “virtual” physical conditioning class.

Berrien Springs Public Schools in southwest Michigan offers courses in family adventure trips to Washington, D.C. cultural museums and whitewater river rafting on the New River Gorge National River in West Virginia.

“There are areas that might be considered a stretch in terms of traditional education,” Snyder said last week at an event in Detroit. “It’s being utilized by a relatively small number of districts. So those resources are then being taken away from being available for all districts to help with general education.”

School leaders in Berkley and other districts are miffed by Snyder’s efforts to reduce the program after he authorized its expansion in two separate actions in 2012 and 2013.

“We were encouraged to do this by (Snyder) loosening the law,” said Dennis McDavid, superintendent of Berkley School District. “They added kindergarten last year, and the governor wants to pull that back now.”

Kindergarten, which is not a legally required grade level, has given some private schools the ability to get the class entirely paid for through the shared-time program.

“It does relieve the cost for a non-public school,” said Brian Broderick, executive director of the Michigan Association of Non-Public Schools, which represents 380 parochial schools with 85,000 students. “And it’s a win for the public school district because they can count those kids.”

In Carrollton, the school district north of Saginaw along the banks of the Saginaw River faced a $ 600,000 budget deficit five years ago, Superintendent Tim Wilson said.

The 2,100-student school district’s foray into shared-time partnerships with private schools in six counties has allowed it to add elementary Spanish and middle school art, more AP high school classes and turned the deficit into a $ 600,000 budget surplus, Wilson said.

“It’s not right to punish a district that’s been building a program, doing what they were supposed to and say, ‘Sorry, you can’t do this anymore,’” said Wilson. “That would be devastating to our district if we didn’t have it.”

A business decision

For Berkley’s leaders, the expansion into teaching elective courses in private schools was a business decision driven by stagnant enrollment in its older suburbs and state revenue that has remained relatively flat, rising just $ 10 per child more this school year than the funding level ten years ago.

The breaking point came in 2011, when Snyder and the Legislature imposed a $ 470-per-student cut to shore up a billion-dollar budget deficit.

“When the $ 470 cut hit, we thought it was incumbent on us to do something,” said Larry Gallagher, deputy superintendent of finance for Berkley schools. “We can’t just stand pat and just cut and have 32 kids per class.”

The cut came down in the 2011-2012 school year.

In 2012, the governor and Legislature authorized the first expansion of shared-time programs to let schools operate anywhere in their counties.

“About the time this law expanded, it was an opportunity,” Gallagher said.

In the fall of 2011, Berkley schools had the equivalent of 128 full-time students through a long-standing shared-time program that had been limited to children who live within the four square miles of the district’s boundaries in Berkley, Huntington Woods and Oak Park.

It amounted to less than 3 percent of its enrollment.

With authorization from Lansing, school leaders in Berkley sent letters to every private school in Oakland County, set up meetings and pitched their curriculum for classes in the arts, foreign language, physical education and college-prep honors and AP classes.

“It was just one-on-one meetings, word of mouth and customer service,” Gallagher said.

In 2013, the Legislature and Snyder went a step further by granting schools the ability to market their shared-time courses to non-public schools in counties that bordered their own intermediate school district.

That opened the gates for Berkley, Brighton, Avondale, Carrollton and other school districts to start creating more robust programs.

Last fall, Berkley had 1,475 students through shared-time — an 11-fold increase from six years before. The district’s overall enrollment has increased nearly 24 percent since 2011, defying the overall trend of declining enrollment in K-12 public schools across the state.

Berkley School District now has a workforce of 190 contract teachers working in 41 different private schools throughout Southeast Michigan. It rivals the 285 teachers Berkley employs in its 11 school buildings.

The district has a full-time shared-time program coordinator and has contracted with retired educators to serve as mentors and evaluators of its instructors in the private schools.

“It’s a business,” McDavid said. “It’s real work, and it takes a lot thought and lot of energy — and we’ve hired people to do those things.”

The contract teachers are not part of the local teacher unions in Berkley and are not paying into the state retirement system, making the arrangement financially feasible, Gallagher said.

“Someone who might have been the Spanish teacher before is still the Spanish teacher, but just getting their check from Berkley schools,” he said.

Some teachers work in two or three private schools during the week, creating efficiencies that Berkley officials contend wouldn’t exist if they were limited to Snyder’s proposed 5 percent cap, which would lower their full-time equivalent shared-time enrollment from 1,475 to 284 students.

“At that 5 percent, you lose those economies of scale,” McDavid said. “I think that’s going to kill shared-time completely.”

Leapfrogging across state

Although the law was supposed to limit public schools to offering shared time in “contiguous” counties, some school districts have found a way around that.

Brighton has leapfrogged across the state, forging agreements with school districts several counties away from Livingston County to provide shared-time teachers, Thiel said.

Thiel has first-hand experience with Brighton’s programs. The school district has at least 10 teachers working inside Lansing Catholic High School, where Thiel’s son attends school.

“Brighton has the infrastructure to hire the teacher, pay the teacher, place the teacher in the private schools — and those teachers never set foot in a Brighton school,” Thiel said. “And my kid never sets foot in a Brighton school.”

Brighton school officials did not return messages from Crains last week seeking comment.

McDavid, the Berkley superintendent, said he doesn’t understand the sudden opposition from Snyder, a former businessman and venture capitalist.

“To me, this is very entrepreneurial,” McDavid said. “It’s the free-market system at work.”

Source: Big business grows from shared classes | Crain’s Detroit Business

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