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Going Public With School Privatization

September 2005 / Education / Abell Reports

Responsible public policy calls for appraisal of the cost/benefit.

The financially pressed Baltimore City Public School System (BCPSS) has had to make painful decisions in the last two years – laying off staff, trimming programs and increasing class sizes. At the same time, the State has redirected more than $10 million in public funding earmarked for City schools to fund retained revenue and overhead at Edison Schools, Inc. — the contractual manager of three Baltimore City public schools.

For five years, the Maryland State Department of Education (MSDE) has undertaken an unprecedented State privatization experiment in Baltimore City by allowing a for-profit company to run three failing public elementary schools. Under a contract that currently runs through 2007, Edison Schools, Inc., of New York is operating Gilmor, Montebello and Furman L. Templeton elementary schools.

The Abell Foundation has funded a study by William Ratchford, a former director of the Maryland State Department of Fiscal Services, to examine the ramifications of the contract, and to provide input into what should be a public debate about it. In the end, the community must address the question: Is the State’s contract with Edison Schools, Inc. a good deal for the Baltimore City public schools?

With this contractual arrangement, the State provides an annual payment to Edison and deducts the amount from State education funds allocated to BCPSS. In FY’05, Edison received $20.1 million to operate the three schools.

Though the facts of the arrangement have received scant publicity, the manner in which public education funds are spent is very much community business; the contract raises issues about the management of public education, particularly in light of current charter school funding negotiations.