EMOs and the false promise of privatization

January 2009

Read Helen Gym’s blog posts on EMOs, privatization and the diverse provider model at The Public School Notebook and Young Philly Politics. 

Why we care about EMOs

Since 2002, Education Management Organizations have become synonymous with “reform” for the Philadelphia public schools. EMOs arrived via a hostile state takeover in December 2001 and were promised as a remedy for failing schools and a bankrupt district. Today, our schools face a massive deficit, as much as a billion dollars over the next five years; declining graduation rates; increased class sizes; and an unprecedented rise of violence in our schools. Meanwhile, EMOs have flourished financially, earning millions in management fees over the past five years, yet still failing to significantly turn around schools.

History

In 2001, Governor Tom Ridge orchestrated a state takeover of the Philadelphia public schools. At a cost of $2.1 million, Gov. Ridge first hired Edison Schools, Inc., the nation’s largest for-profit manager of public schools, to make recommendations on how to improve Philadelphia schools. Edison recommended that the entire Philadelphia school district be turned over to their company, a recommendation fully endorsed by Gov. Ridge  and the leadership of Harrisburg. For the next ten months, citizens, students, district employees and union members formed a powerful alliance and launched a citywide campaign against Edison Schools and the privatization of public education. In the end, the School Reform Commission compromised with a “diverse provider model,” for 45 schools, a mix of managers that included for-profit, non-profit and university, as well as private management.

What studies found

The SRC has been steadfast in its support of the “diverse provider model” even though four separate and independent studies have shown that EMOs do not substantively outperform district-managed schools. Only one study, which was partially paid for by Edison Schools, showed any significant positive results from EMOs.

The District’s own internal study, published in April 2007 but which the SRC refused to make public for months, showed many problems with EMOs, including:

  • Contracts which paid them for more students than they enrolled; and
  • Lack of enforcement around services to bilingual students, English language learners, and special education students.

A study by RAND/RFA found that the most successful model of achievement were schools under management by the Office of Restructured Schools. This office invested district resources in a test set of struggling schools with similar demographics and achievement levels as EMO schools. Schools under the Office of Restructured Schools not only outperformed EMO schools, but also the average district-managed school. The SRC disbanded the Office of Restructured Schools without explanation in 2006.

The struggle for accountability

EMO contracts lasted five years. In Spring 2007 a number of Harrisburg legislators launched a campaign to ensure the full renewal of the EMOs, despite the academic studies. At the same time, parents and education advocates decried the spending on EMOs, especially at a time of severe financial distress. On May 31, 2007, after months of public protest and ignoring District recommendations and an alternative plan suggested by another commissioner, the SRC voted to renew all the EMO-managed schools for one year at a cost of $12 million.

In Spring 2008, new SRC leadership, with support from incoming Schools CEO Arlene Ackerman, voted to return six EMO schools to district control and put another 20 schools on one-year contracts, due to their poor performance.

Read Parents United quoted in the Washington Post on the Philadelphia experiment here (June 2008).

Read the RAND/RFA study on EMOs here (PDF).

Read the District’s internal EMO study here.

July 2008

Parents United statement on EMOs

As the District faces yet another year of $100-plus million deficits, we cannot afford to throw money at a failed political experiment. The School Reform Commission must use every penny to the advantage of students in the classroom. More important, to rebuild the trust of parents and community, the SRC must take a strong stand that it believes in data and achievement-oriented results, not political pressure.

Parents United remains concerned that the SRC continues to value EMOs above academic studies, public transparency, accountability and fiscal management in a time of budget crisis, concern for vulnerable sectors of children, and most important, academic achievement in some of the longest-suffering schools and communities in our city. We are appalled at the crass and blatant intrusion of politicians, Wall Street, and EMO executives to influence what should be an academic decision.

When every independent study has pointed to the overall failure of EMOs to significantly turn around struggling schools, it is time to end the charade. Parents United believes all children deserve programs that work. We advocate that failing EMOs be returned to a reinstated Office of Restructured Schools, that management fees be reduced in a time of budget crisis, and that contracts reflect quality delivery of services to all students. 

June 25, 2008

Edison Schools Inc. says it’s “not responsible” for safety of kids

This week Edison Schools Inc., the nation’s largest for-profit manager of public schools, settled a civil case with sealed records in the brutal assault of a 12-year old child at Stetson Middle School in Philadelphia. In a shocking display of hubris, Edison argued in court that it was “not responsible” for the safety of children in their schools.

To be clear, Edison has had a long history of safety and security problems at their schools. Edison ran nine of 10 schools in the Chester-Upland School District for six years, a tenure that was marked by countless suspensions, walk-outs and protests. Here in Philadelphia, Edison was recently in the news for hiring a community based organization to provide its security officers, an outfit that ended up failing to pay its employees, resulting in numerous complaints from schools. Edison also failed this past school year to make even the most minimal advances on teacher attendance and suspensions. In order to pass they had to show less than 1% improvement – they failed to do that much.

The problems at Stetson were clearly documented in theInquirer. The tragedy there doesn’t symbolize anything more than a private company that sought time and time again to cut corners – in this case, to an unspeakable end. It is one of the reasons that Parents United has continued to call for review of contracts and for limitations to EMO managers.

Last week, Parents United also got a boost in a major story about Philadelphia’s privatization experiment in the Washington Post. Read about it here. 

June 19, 2008

Statement on the June 18 EMO decision

Parents United for Public Education supports the School Reform Commission’s decision yesterday to take the first steps to establish accountability for Education Management Organization (EMOs). Although we had hoped that more schools would be returned to District control, we believe the SRC’s decision sends an important message that private contracts will be held to a minimum standard of achievement.

We especially praise the District for defining what additional resources returning schools will have under District management. This is an important opportunity to re-establish the expertise and vision of public education. We believe that public schools work when the appropriate will, resources and effort are put to the task. We expect that as more schools return to District management, the District will be ready to accept them with the best that our public system has to offer.

Six years ago a promise was made to the people of Philadelphia that the state would do right by our children. Since then, half a generation of children has gone through our schools and we have spent almost $120 million on the EMO model, whose well-documented results have shown that this experiment needs to end.

Throughout much of our testimony over the past several years, we have made clear that our concerns about EMOs have always had less to do with the individual companies than with the fundamental underpinnings of our belief in public education – whether the District will promote academic achievement and student success, enforce accountability and transparency, respect students’ special needs, and engage parents and the broader public in an effort to build the kind of schools our children deserve.

Now is the time for the District and SRC to leave behind the politicized vestiges of the state takeover and chart a course which emphasizes a quality choice system, not a multiple choice system. As we move forward, we ask that the District continue to refine, expand and invest in strategies that make schools work rather than adhere to any particular management model or company.

Together, we can reclaim that promise made years ago. We look forward to partnering with the District on this effort.

Parents United press release on EMO decision

Parents Laud EMO Decision: “Accountability trumps politics,” says one parent

Parents United for Public Education, which has been calling for accountability on private management contracts in Philadelphia, lauded the School Reform Commission for terminating six contracts with Education Management Organizations (EMOs) yesterday. Another 20 EMO schools have been given one-year probationary contracts with plans to closely watch how they spend their money.

“We think this sends a clear message that the failures of privatization will not be tolerated,” said Helen Gym, a Philadelphia public school parent and member of Parents United. “This ‘experiment’ is over.”

Parents United, along with other grassroots groups such as the Philadelphia Student Union, has kept the issue of EMOs at the forefront of reform dialogue in Philadelphia. As the District faces a long term deficit and limited resources, Gym said the millions spent on EMOs has become “unconscionable.”

EMOs were established in Philadelphia as a condition of the 2001 state takeover of the Philadelphia public schools. A grassroots effort led by students, parents, and citizens brought thousands of protesters into the streets and limited what was initially billed as the nation’s boldest experiment with privatization. Approximately one-sixth of Philadelphia schools were turned over to different providers, including for-profit companies, non-profits and universities. Edison Schools Inc. received the bulk of the EMO schools – 20 of 41 at the time.

Since then, parents and students, as well as a local education newspaper, the Philadelphia Public School Notebook, have raised concerns about EMO failures, including whether they provided adequate services to special needs students and lack of information about how management fees were spent. They also drew attention to declining enrollment in EMO schools and “sweetheart” contracts that paid for more students than were enrolled. In 2007 four independent studies found that EMOs performed no better academically than average District- managed schools despite collecting almost $110 million in management fees.

Although the SRC decision terminated only six contracts (four of which belonged to Edison), the bulk of EMO schools are under a one-year contract that puts them “on watch” for possible termination. Edison Schools Inc., comprises the majority of this category as well.

Parent Aissia Richardson said that the SRC decision today was an important statement that “accountability would trump politics.”

“They’ve had six years here and millions of our dollars,” Richardson said. “If they haven’t done the job, it’s time for them to go. Isn’t that how the market works?”

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