Did Julie Parrish vote to send $160 million to private for-profit schools?

One of the fiercest legislative fights in 2011 had to do with a bill that loosened enrollment restrictions at online charter schools. It was a battle mostly along party lines and now House Bill 2301 has cropped up in a competitive House race in Clackamas County.

Rep. Julie Parrish, R-West Linn, is the freshman incumbent. Her Democratic opponent is Metro councilor Carl Hosticka of Tualatin. In a September guest column published in the West Linn Tidings, he listed a number of Parrish’s many legislative failings -- in his view -- including this one:

"During this time of cuts in public education, my opponent voted to divert $160 million from public schools to private for-profit schools," Hosticka wrote.

Parrish asked for a PolitiFact ruling, with this tart remark: "Online schools are public schools, not private. And I'm not sure where he gets the $160M diverted to for-profit schools as again, while they are contracted out, these are still part of the Oregon public school system."

Solid questions. Both major party candidates are claiming to be the education advocate in the race. We plowed on.

The controversial legislation was approved as part of a compromise deal involving charter school advocates in the House Republican caucus and Gov. John Kitzhaber, a Democrat. What readers need to know for this PolitiFact is that the legislation loosened restrictions on online enrollment, authorizing up to 3 percent of a school district’s population to attend a virtual school.

There are an estimated 560,000 Oregon public school students in grades K-12, which means the legislation would allow up to 16,000 students to enroll in online academies. However, there’s nowhere near that number in virtual schools; enrollment grew from 4,200 students in the year before the legislation to 5,400 students the year after. Enrollment figures for this fall are not available yet.

In Oregon, the money follows the student, from the state to school districts, and then from the school district to a traditional school or charter school. For charter schools, the amount is roughly $5,200 a student a year, compared with $6,000 for a student at a traditional school.

The 5,400 enrollment figure translates into $28 million going to online schools in a single year, 2011-12. That is a fraction of the $160 million estimated over two years, a budget period that Hosticka didn’t clarify in his statement. We do, however, find his $160 million estimate based in fact, since 16,000 students multiplied by $5,200 comes out to $166 million for a two-year period.

So if the maximum number of students allowed by the legislation were to enroll in online schools, at least $160 million would go toward those online schools over two years. We’ll put aside the question of whether that’s cherry-picking on the part of Hosticka. We want to know whether those schools are "private for-profit?"

The answer is no. By definition, charter schools -- both brick-and-mortar and online -- are public schools. They are sponsored by a public school district, or the state. They use public money to educate students, who pay nothing. (Private schools, on the other hand, charge tuition and can do such things as require students to attend religious services, which a public school could not do.)

Where does the "private for-profit," language come from?

There are fewer than a dozen online-only schools in Oregon and most number enrollment in the hundreds, if that. The largest virtual school is Oregon Connections Academy, out of Scio. The school is run by a nonprofit corporation and board, but it’s part of the Connections Academy network, whose parent company is Connections Education, which is now part of Pearson. Connections Education LLC is a private, for-profit entity based in Baltimore, Md.  

The second-largest virtual school is Oregon Virtual Academy, out of the North Bend School District, which contracts with K12 Inc.

Hosticka stands by his statement that $160 million will be diverted from public schools.

"She’s trying to hang me on a technicality, whether it’s a public school or a for-profit school. You can make the argument it’s an amalgam of both," he said. "It’s technically a charter school, but then they contract with a for-profit company for education. I’m prepared to stand by this statement that $160 million would end up at for-profit schools."

We ran the statement by various education groups in Oregon, and received two very different responses.

"In terms of a diversion, absolutely. You’re taking from one pot and putting it in another, taking it from neighborhood schools that are already struggling and passing it to for-profit, private, out-of-state companies," said Becca Uherbelau, spokeswoman for the Oregon Education Association, the union that represents school teachers but not the ones at charter schools.

Then there’s Sue Levin, executive director of the advocacy group Stand For Children. She is not an advocate of charter schools or virtual charter schools, and she offers no opinion on their quality. But the schools are part of the public school system.

"He’s trying to create an impression that in a tight budget, actual dollars were taken out of the state schools funds but that is absolutely not the case. That is misleading, and particularly in the environment that schools are in, it’s pretty inflammatory," Levin said.

Clearly there’s a wide difference of opinion on what deserves to be part of our taxpayer-paid public school system. There are arguments that online schools are not very effective as well as arguments that they are a lifesaver for children who can’t attend a physical school.

But Levin, who doesn’t particularly champion them, is right. Like it or not, online charter schools are public schools, so we’re not sure how $160 million can be "diverted" from public schools. The money cited is also the maximum amount, should 16,000 children overnight enroll in online classes, which nobody expected to happen and which didn’t happen -- so $160 million is overblown.

Hosticka’s statement contains an element of truth, we’ll give him that. The two largest online charter schools in Oregon exist because of private companies that want to make money. But charter school advocates have the Oregon Department of Education on their side: Online schools are public schools. We rate the statement Mostly False.

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