Oakland charter school approved amid concerns over fiscal impact on district

July 17, 2018

A California State Board of Education decision to approve a charter school over a school district’s objections laid bare the limits of the state’s charter laws.

Oakland Unified had refused to approve a charter for the proposed new Latitude 37.8 high school in part because the district faces a fiscal crisis and can’t afford to lose more students, along with the state aid that follows them when they go to charter schools. Already, 43 charter schools operate in the city, enrolling one in four students in the Alameda County district.

The district is under pressure to cut at least $5.8 million next year and to close district schools to close its budget deficit.

“We did make a tough decision,” Oakland school board President Aimee Eng told the state board. “And we hope the state stands behind our tough decision.”

After intense discussion amid sympathy for Oakland’s situation, the state board during its meeting Thursday approved a new charter high school expected to open in the fall, based on the California Department of Education’s recommendation, which said it met all legal requirements. The board said the state law does not allow it to consider the charter school’s financial impact on the local district.

However, Glen Price, chief deputy superintendent of the California Department of Education, said California’s charter school laws — passed in the early 1990s — were outdated and needed to be revised.

He pointed out that both the Oakland and Alameda County school boards have approved many charter schools in the past.

“But, they know that at some point, we have to consider the whole ecosystem — the whole community we’re operating in,” Price said, adding that no other local planning body would make a decision about expanding services without considering the financial impacts.

“It’s time for us to take a fresh look at policies in the state,” he said.

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Some state board members struggled with the decision. State board member Ilene Straus said she understood that the Oakland school board was grappling with managing its finances and reducing the number of schools in the district.

“I think we’re stuck between wanting great things for kids, which everybody wants, and really clear guidance about what we can approve,” Straus said.

The Education for Change Public Schools charter management organization expects to open Latitude on the site of the organization’s Epic middle charter school next month in the Fruitvale area of Oakland with 50 9th-graders. It will expand to 320 students in grades 9-12 by 2022-23.

The school plans to personalize learning for students by creating individual plans for them that will include weekly off-campus excursions into the community to learn from professionals in various businesses and organizations.

Price said he and State Superintendent of Public Instruction Tom Torlakson supported the department’s recommendations, but were concerned that current charter school laws did not take into consideration the rapid growth of charter schools in some districts.

Although California has moved toward giving districts more control over decision-making regarding their use of state funds, he said elected officials are “handicapped” by charter school laws passed in 1991 and 1992, which make it difficult for them to do what they believe is best for their communities. 

In the case of Oakland Unified, this quandary for local and state officials is especially pronounced because the district is paying back state loans from 2003 due to financial distress and “the superintendent of public instruction is charged with returning the district to financial health,” he said.

Yet, the state superintendent has no authority under current law to evaluate the financial impact of a charter school on the district when considering whether to grant a charter.

“So, a lot of responsibility has been given to the superintendent” to help the district improve its finances without the necessary authority,” Price said. “The education and charter landscape has changed dramatically since 1992, while the charter authorization process has only been tweaked slightly.”

The state board is now the second-largest charter authorizer in California, overseeing 51 charter schools, behind Los Angeles Unified. The department’s resources are “stretched incredibly thin,” Price said, noting that centralized oversight from Sacramento “flies in the face of our commitment to local control.”

The Oakland school board voted 6-1 to reject the charter school petition last November, saying the application did not meet all of the state’s requirements. Jumoke Hinton Hodge voted in favor, saying that she had followed district staff’s recommendation for approval. Alameda County’s board also denied the petition in a 4-2 vote. The California Department of Education said the county lacked grounds to support their denial.

At Thursday’s state board meeting, many speakers said the new charter school would hurt the district financially by draining students away from Oakland Unified, which would cause it to lose state aid for each pupil. Recent reports from outside agencies, including the Fiscal Crisis Management and Assistance Team and civil Alameda County Grand Jury, said the district needed to close schools to stay fiscally solvent. Over the last 15 years, enrollment in district schools has dropped by 31 percent to about 37,000 while enrollment in the charter schools in the city has grown as new charter schools have opened and expanded.

Assemblyman Rob Bonta, D-Oakland, and state Sen. Nancy Skinner, D-Oakland, sent letters to the state board urging it to deny the charter school, saying the state should uphold decisions made by local school boards.

“Oakland Unified School District is fighting to get their financial house in order,” Skinner wrote. “Stripping the elected school board of the ability to make local decisions regarding when a school will be added to their portfolio threatens that stability.”

Although the California Department of Education recommended approval of the Oakland charter school petition, Lisa Constancio, director of the department’s charter schools division, said the proposed school must secure adequate funding and further clarify some of its charter elements as conditions of approval. The school will be called Latitude 37.8 after Oakland’s latitude.

The state board approved the charter in a 7-1-1 vote, with board member Patricia Rucker opposed and board member Feliza Ortiz-Licon abstaining. Both expressed concerns about the charter’s ability to attract the same demographics as the district’s, especially the percentage of African-American students.

Board member Trish Williams voted in favor saying that the petition “doesn’t meet any of the reasons for denial.”

Ortiz-Licon also raised questions about under-enrollment and low academic performance in some of the other six schools currently operated by Education for Change in Oakland, based on the California Schools Dashboard, which rates schools by color in various categories. Red indicates the lowest performance. The next rung up is orange, followed by yellow, green and blue, which signifies the highest performance among schools statewide on the dashboard.

Although Cox Academy was rated green for its progress among English learners, it was rated yellow for math scores, orange for English language arts scores and red for suspension rates.

Hae-Sin Thomas, CEO of the charter management company, said the Latitude school would conduct a lottery to ensure that students come from every zip code in the city, instead of giving preferential admission to those who live in the Epic middle school neighborhood. That should attract more African-American students, she said, noting that the organization’s other schools are located in largely Latino areas.

Besides changing the admissions process, she said the organization has “doubled down on instructional improvement” in the past year. Already, she said, preliminary results from standardized tests administered last spring show gains of 20-25 percentage points in the organization’s current schools. These results, however, have not yet been publicly released by the state.

To help attract more African-American students, Thomas said the organization has hired more African-American teachers. Admitting that she was “embarrassed” by the low performance of some of her charter schools, Thomas said she has traveled the country to see how others with similar demographics are “killing us.”

She reiterated that schools such as Epic — where only 8 percent of students met or exceeded math standards and 22 percent met or exceeded English standards on state tests in 2017 — have seen dramatic improvement in the past year. Statewide, 38 percent of students met or exceeded math standards and 49 percent reached those goals in English language arts.

After the meeting, Eng, Oakland school board president, said she stood by the local school board’s decision to deny the charter school, but understood the state board’s rationale for approving it, “given that California’s existing charter law makes no exception for potential financial impact on school districts when granting new charters.” But she said Oakland officials agree with Price that “California’s charter law is outdated and needs to be more aligned with the state’s recent policy shifts toward decentralization and greater local control.”

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