Funding fight

Student Success funding bill praised and panned

House Speaker Mark Ferrandino (at podium) touts the proposed Student Success Act.

Legislative backers of the proposed Student Success Act formally unveiled their spending-and-reform plan at an upbeat Capitol news conference Thursday, even as skeptics ratcheted up criticism of the proposal.

While legislators at the news conference promoted the bill as a balance between more funding and reform, people attending a school boards conference a few blocks away applauded a protest song that called on lawmakers to do more to reduce the state’s school funding shortfall.

The yet-to-be-introduced bill proposes spending more than $300 million — part to reduce the $1 billion funding shortfall, some to help districts pay for implementation of reforms already on the books, and part for a list of earmarked programs. (Chalkbeat Colorado first reported the details of the bill in this story.)

Around the Capitol, the bill commonly is called the “Son of 213,” a reference to Senate Bill 13-213, the comprehensive, $1 billion overhaul of the state’s school funding system that remains on the shelf because voters last year rejected the tax increase necessary to pay for it. (Sponsors of the new bill hate that nickname.)

More than a dozen House members from both parties flanked Democratic Speaker Mark Ferrandino of Denver as he called the proposal a first step toward improved school funding and a continuation of education reform efforts.

“While not everyone is in full agreement, people have been heard,” Ferrandino said. “We are absolutely committed to working with all stakeholders.”

The bill’s three prime sponsors amplified the do-what-we-can and all-are-being-consulted themes.

Reps. Millie Hamner, D-Dillon, and Carole Murray, R-Castle Rock, touted the bill as a “balanced approach.” Hamner added, “We will continue to reach out to all groups.” Hamner is chair of the House Education Committee and Murray is the senior Republican member.

“We’ve heard the districts, but we also have an interest in moving Colorado forward,” Hamner said.

Senate prime sponsor Sen. Mike Johnston, D-Denver, picked up the same themes, saying, “We’re not going to get all of the way” toward restoring K-12 funding, but added, “Let us begin the process of trying to make this reinvestment.” (While Johnston is widely regarded by lobbyists and many educators as the animating force behind the bill, its sponsors are promoting Hamner and Murray as the key drivers and stress the bipartisan support for the bill, at least in the House. Johnston was the only senator at the news conference.)

Others raise concerns about bill

While supporters were touting the bill, others were significantly less enthusiastic.

As it happens, the Colorado Association of Schools board opened its annual legislative conference on the same day as the supporters’ news conference.

Those who attended a luncheon at the Brown Palace Hotel cheered a “protest” song written by Mark DeVoti, a superintendent who now works for CASB, that urged the legislature to devote more money to buying down the negative factor.

The negative factor is a formula used by the legislature to reduce school funding from what it otherwise would have been in order the balance the annual state budget. It’s estimated the negative factor has set school funding $1 billion below what it would have been otherwise.

The proposed Student Success bill would make only an $80 million dent in that $1 billion. School districts and superintendents are pushing to “buy down” the negative factor in 2014-15 by anywhere from $200 million to $275 million.

The chorus to DeVoti’s two-verse song goes:

Take that Negative Factor, make it go away!
Come on put that billion back
Do it with no string attached
Take that Negative Factor, make it go away

Lt. Gov. Joe Garcia, the Hickenlooper administration’s point person on education issues, was the featured speaker at the CASB luncheon. According to several people who attended the event, Garcia was peppered with lots of hard questions – and no softballs – about the negative factor and the Student Success bill. Attendees said Garcia held his own but that the session was tense.

Later in the day, CASB chief lobbyist Jane Urschel made an impassioned plea to members to lobby their legislators for reduction of the negative factor. “I cannot do this for you,” she said. “You have to talk to them. … I think they can do [reduce] $200 million in the negative factor and still do some other expenditures they want to do.”

In a reference to that fact that most CASB members come from small rural districts, Urschel said, “Get off your tractors” and come to Denver to lobby.

Two other influential mainline interest groups, the Colorado Education Association and the Colorado Association of School Executives, issued statements Thursday raising concerns about the Student Success Act.

“We appreciate that lawmakers allocated some money to help revive struggling districts, but the proposed $80 million is inadequate to schools and classrooms that lost more than $1 billion in just five years,” said CEA President Kerrie Dallman in a prepared statement. “We also have great concern that the majority of the funding in the proposal comes with mandates on how to use, or is one-time money.”

CASE Executive Director Bruce Caughey also called for a larger cut in the negative factor.

Negative factor reduction carries future implications

A key – but complicated – issue in the negative factor debate is the impact on future state budgets if a significant amount of money is devoted to buying down the negative factor. Because the state constitution requires annual increases in base school funding based on inflation and enrollment growth, increasing base funding through reduction of the negative factor would mean even larger mandatory school funding in future years. People like Ferrandino and Hickenlooper budget advisors resist too big a cut in the negative factor for that reason.

A safety valve for school support is a dedicated account called the State Education Fund, which can be used to supplement school support from the state’s main General Fund. Gov. John Hickenlooper has proposed keeping a $700 million balance in the SEF at the end of 2014-15, thereby saving some money to spend on schools in future years. The spending proposed in the Student Success Act could leave as little as $200 million or as much as $400 million in the SEF.

Asked about that, Hickenlooper budget chief Henry Sobanet told Chalkbeat Colorado, “There are ideas in the legislature that total several hundred million dollars above our [budget] request. After the March forecast, we will work with the JBC and leadership on a budget package that predicted revenue can support.”

For now, the proposed spending in the Student Success bill is an educated guess and is expected to change after those state revenue forecasts are released at the end of Marcy.

“The March forecast will determine how much we can spend,” Ferrandino said.

Notably absent from the Student Success bill is any increased funding for full-day kindergarten and the Colorado Preschool Program, both favorites of education reformers. Depending on the March forecasts, Murray said additional funding for those programs could be included in the annual school finance bill, a separate piece of legislation. That would be “the icing on the cake,” she said.

New bill proposes other uses for BEST revenue

The Student Success bill proposes spending all $40 million generated by new marijuana taxes for kindergarten facilities, charter school facilities and school technology upgrades.

A bill introduced Wednesday proposes different uses.

House Bill 14-1287 proposes that the money go to the state capital construction fund without earmarking, according to prime sponsor Rep. Dave Young, D-Greeley. But the main thrust of the bill is to help school districts affected by disasters such as last year’s wildfires and floods.

In the event of an officially declared disaster, the bill would require the Department of Education to contact affected school districts to inventory damage. Affected districts could apply to the Capital Construction Assistance Board for emergency aid, and the normal local matching requirements of the Building Excellent Schools Today program would be waived. The board could use up to 10 percent of the fund for emergency grants.

Asked about potential conflict with student success bill, Young smiled and said, “I think we’re going to have an interesting debate.” (Young was part of the supporting cast of lawmakers at the Student Success news conference.)

HB 14-1287 originated with a special legislature committee convened after last year’s disaster and has bipartisan sponsorship.

money matters

Why Gov. Hickenlooper wants to give some Colorado charter schools $5.5 million

Students at The New America School in Thornton during an English class. (Photo by Nic Garcia)

If Mike Epke, principal of the New America School in Thornton, had a larger budget, he would like to spend it on technical training and intervention programs for his students.

He would buy more grade-level and age appropriate books for the empty shelves in his school’s library, and provide his teachers with a modest raise. If he could really make the dollars stretch, he’d hire additional teacher aides to help students learning with disabilities.

“These are students who have not had all the opportunities other students have had,” the charter school principal said, describing his 400 high school students who are mostly Hispanic and come from low-income homes.

A $5.5 million budget request from Gov. John Hickenlooper, a Democrat, could help Epke make some of those dreams a reality.

The seven-figure ask is part of Hickenlooper’s proposed budget that he sent to lawmakers earlier this month. The money would go to state-approved charter schools in an effort to close a funding gap lawmakers tried to eliminate in a landmark funding bill passed in the waning days of the 2017 state legislative session.

Funding charter schools, which receive tax dollars but operate independently of the traditional school district system, is a contentious issue in many states. Charter schools in Colorado have enjoyed bipartisan support, but the 2017 debate over how to fund them hit on thorny issues, especially the state’s constitutional guarantee of local control of schools.

The legislation that ultimately passed, which had broad bipartisan support but faced fierce opposition from some Democrats, requires school districts by 2020 to equitably share voter-approved local tax increases — known as mill levy overrides — with the charter schools they approved.

The bill also created a system for lawmakers to send more money to charter schools, like New America in Thornton, that are governed by the state, rather than a local school district.

Unlike district-approved charter schools, which were always eligible to receive a portion of local tax increases, state-approved charter schools haven’t had access to that revenue.

Terry Croy Lewis, executive director of the Charter School Institute, or CSI, the state organization that approves charter schools, said it is critical lawmakers complete the work they started in 2017 by boosting funding to her schools.

“It’s a significant amount of money,” she said. “To not have that equity for our schools, it’s extremely concerning.”

CSI authorizes 41 different charters schools that enrolled nearly 17,000 students last school year. That’s comparable to both the Brighton and Thompson school districts, according to state data.

Hickenlooper’s request would be a small step toward closing the $18 million gap between state-approved charter schools and what district-run charter schools are projected to receive starting in 2020, CSI officials said.

“Gov. Hickenlooper believes that working to make school funding as fair as possible is important,” Jacque Montgomery, Hickenlooper’s spokeswoman, said in a statement. “This is the next step in making sure that is true for more children.”

If lawmakers approve Hickenlooper’s request, the New Legacy charter school in Aurora would receive about $580 more per student in the 2018-19 school year.

Jennifer Douglas, the school’s principal, said she would put that money toward teacher salaries and training — especially in the school’s early education center.

“As a small school, serving students with complex needs, it is challenging and we need to tap into every dollar we can,” she said.

The three-year old school in Aurora serves both teen mothers and their toddlers. Before the school opened, Douglas sent in her charter application to both the Aurora school board and CSI. Both approved her charter application, but because at the time her school would receive greater access to federal dollars through CSI, Douglas asked to be governed by the state.

Douglas said that her preferred solution to close the funding gap would be to see local tax increases follow students, regardless of school type or governance model. Until that day, she said, lawmakers must “ensure that schools have the resources they need to take care of the students in our state and give them the education they deserve.”

For Hickenlooper’s request to become a reality, it must first be approved by the legislature’s budget committee and then by both chambers. In a hyper-partisan election year, nothing is a guarantee, but it appears Hickenlooper’s proposal won’t face the same fight that the 2017 charter school funding bill encountered.

State Rep. Jovan Melton, an Aurora Democrat who helped lead the charge against the charter school funding bill, said he was likely going to support Hickenlooper’s proposal.

“You almost have to do it to be in alignment with the law,” Melton said. “I don’t think with a good conscious I could vote against it. I’m probably going to hold my nose and vote yes.”

Payment dispute

Fired testing company seeks $25.3 million for work on TNReady’s bumpy rollout

PHOTO: TN.gov

Tennessee officials won’t talk about the state’s ongoing dispute with the testing company it fired last year, but the company’s president is.

Henry Scherich

Henry Scherich says Tennessee owes Measurement Inc. $25.3 million for services associated with TNReady, the state’s new standardized test for its public schools. That’s nearly a quarter of the company’s five-year, $108 million contract with the state, which Tennessee officials canceled after technical problems roiled the test’s 2016 rollout.

So far, the state has paid the Durham, North Carolina-based company about $545,000 for its services, representing about 2 percent of the total bill, according to a claim recently obtained by Chalkbeat.

Measurement Inc. filed the claim with the state in February in an effort to get the rest of the money that it says it’s owed. Since then, lawyers for both sides have been in discussions, and the company filed a lawsuit in June with the Tennessee Claims Commission. The commission has directed the State Department of Education to respond to the complaint by Nov. 30.

“We’re moving forward,” Scherich told Chalkbeat when asked about the status of the talks. “… We’re simply asking to be paid for the services we provided.”

Education Commissioner Candice McQueen declined last week to discuss the dispute, which she called “an ongoing pending lawsuit.” A spokesman for the attorney general’s office also declined to comment on Monday.

Scherich said he and other company officials have not been called to Nashville for hearings or depositions.

“Our lawyers and the state’s lawyers are still skirmishing each other,” he said. “…They argue about lots of things. It’s kind of like we’re establishing the ground rules for how this process is going to proceed.”

PHOTO: Grace Tatter
Education Commissioner Candice McQueen announced the firing of Measurement Inc. and the suspensions of most testing in April 2016.

Tennessee’s dramatic testing failure started on Feb. 8, 2016, when students logged on during the first morning of testing and were unable to load TNReady off the new online platform developed by Measurement Inc. The fallout culminated several months later when McQueen fired the company and canceled testing altogether for grades 3-8. In between were months of delays after McQueen instructed districts to revert to paper-and-pencil materials that would be provided by Measurement Inc. under the terms of their contract. Many of those materials never arrived.

The company’s claim suggests that the state was hasty in its decision to cancel online testing and therefore shares blame for a year of incomplete testing.

The Tennessee Department of Education “unilaterally and unjustifiably ordered the cancellation of all statewide electronic testing that occurred on February 8, 2016, following a transitory slowdown of network services that morning,” the claim says.

(In an exclusive interview with Chalkbeat the day before his company was fired, Scherich said Measurement Inc.’s online platform did not have enough servers for the 48,000 students who logged on that first day — a problem that he said could have been fixed eventually.)

The claim also charges that McQueen’s subsequent order to substitute paper test materials was “unnecessary and irresponsible” and impossible to meet because of the logistical challenge of printing and distributing them statewide in a matter of weeks.

In her letter terminating the state’s contracts with Measurement Inc., McQueen describes daily problems with the company’s online platform in the months leading up to the botched launch. “This was not just a testing day hiccup; the online platform failed to function on day one of testing,” she wrote.

McQueen said those experiences contributed to her department’s conclusion that Measurement Inc. was unable to provide a reliable, consistent online platform and left her with no option but to order paper and pencil tests. She also cited the company’s failure to meet its own paper test delivery deadlines for her ultimate decision to terminate the contracts and suspend testing.

The last sentence of the four-page termination letter says the state would “work with (Measurement Inc.) to determine reconciliation for appropriate compensation due, if any, for services and deliverables that have been completed as of the termination date after liquidated damages have been assessed.”

In addition to its invoices for work under the contract, Scherich said his company is owed another $400,000 for delivering test-related materials to the state after its contract was ended.

“We didn’t want to be a company that stood in the way of the programs of the state of Tennessee, so we provided all the information they requested,” Scherich said. “We were told we would be paid, we provided the information, and then we’ve not been paid.”

Founded in 1980, Measurement Inc. had been doing testing-related work for Tennessee for more than a decade before being awarded the 2014 TNReady contract, its biggest job ever. The company had a fast deadline — only a year — to create the state’s test for grades 3-11 math and English language arts after a vote months earlier by the legislature prompted Tennessee to pull out of PARCC, a consortium of other states with a shared Common Core-aligned assessment.

Scherich said the loss of the TNReady contract was “a major hit” for his company, but that Measurement Inc. has paid every employee and subcontractor who worked on the project. “We have had to go into debt to keep ourselves viable while we wait for this situation with Tennessee to be resolved,” he said, adding that the company continues to do work in about 20 other states.

To pursue its claim, Measurement Inc. has hired the Tennessee law firm of Lewis, Thomason, King, Krieg & Waldrop, which has offices in Nashville and Knoxville.

“I’m sure we’ll work out something amicable with the state over time,” he said. “I’m an optimistic person. But I think our lawyers and their lawyers will have to have a lot of negotiations.”

Below are Measurement Inc.’s claim against the state, and the state’s letter terminating its contracts with the company.

Editor’s note: This story has been updated with details about the claim’s status.