Tenn. Fears 'Virtual School' May Drain Taxpayer Funds
State officials are anxious to see how many students across Tennessee enroll in a public "virtual school" run by a for-profit Virginia company—and how much state taxpayer money automatically follows them.
Sales teams for K12 Inc. on Friday completed a two-week sales blitz, holding information meetings in a dozen towns and cities for families interested in the new Tennessee Virtual Academy.
Enrollment deadline for the new school year is today. Corporate spokesman Jeff Kwitowski said Friday he didn't have enrollment numbers yet, but that "interest is high. Demand for online public schools is strong in Tennessee as it is in every state."
Critics say K12 Inc., whose lobbyists pushed a virtual-school bill through to passage in the closing minutes of the state legislature in May, doesn't have to pay for school buildings, libraries, buses and ball fields.
But for each student enrolled, the state is obligated to send at least $5,387 to Union County Public Schools, the small rural district northeast of Knoxville that rushed to contract with K12 to operate the new virtual school. That includes home-schooled students expected to take advantage of the free textbooks and other supplies offered by the virtual school.
Union County has not publicly released the contract, but Kwitowski said the school districts usually keep about 4 percent of per-pupil funding; the rest flows to the contractor.
K12 Inc. compensated its CEO more than $2.6 million last year, its chief financial officer more than $1.7 million, and other top executives several hundred thousand dollars each, according to its latest annual report to shareholders.
Although the virtual academy is a Union County public school under the new state law, it's open to kindergarten through eighth-grade students from Memphis to Mountain City.
The new Republican majority approved the "virtual school act" May 21 despite warnings that it would let for-profit companies recruit hundreds or thousands of children across the state and siphon off taxpayer funding.
Even Republican Rep. Bill Dunn of Knoxville, who home-schooled his children and favored the virtual-school concept, voiced concern during committee hearings about the open-ended entitlement to state money the bill established, particularly for home-schoolers not currently enrolled in public schools and who pay for their courses and supplies.
Dunn said he expected a district and its contractor to heavily recruit home-schoolers and others to a new tuition-free online school. "We have to watch out for the taxpayers. There's some very entrepreneurial people out there who see every child as (a source of funds) and ask what do we need to do to get that money to flow," he said.
That scenario unfolded more quickly than Dunn and Democratic opponents of the bill envisioned. K12 Inc. is also promoting the academy through advertising and its Facebook site, where it talks up the boxloads of school supplies and, in some cases, new computers, that enrollees are sent by courier.
Gov. Bill Haslam, who signed the bill into law in June, said last week that he's just now learning its full impact.
"I'm growing increasingly familiar with it. It's something I want to understand the ramifications a lot better. I understand how (virtual education) could be very beneficial; you could offer subjects that aren't offered other places. But I do think we have to think through the consequences a little bit more than we've done so far."
Stephen Smith of the state Department of Education said the bill contains no cap on enrollment or funding. "This is new ground and I think it's something everyone is going to take a close look at."
State Sen. Roy Herron, D-Dresden, who fought the bill, says he anticipated what has happened. "Among the many attacks on teachers and our schools last session, this could be the most damaging to our children and to taxpayers and to our schools. It's going to be an enormous transfer of taxpayer dollars from the state and the only question is how much of the pie is absorbed by the out-of-state for-profit company and how much by one single county."
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