This post looks at the roots of the reform program in Indiana. It is the first in a series of three stories on efforts to privatize public education in Indiana. The next installment will discuss the role of Mike Pence in the expansion of vouchers, as well as the misuse of public tax dollars in Indiana’s charter and voucher sector.

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This was written by Carol Burris, a former award-winning New York high school principal who is executive director of the Network for Public Education, a nonprofit advocacy group. Burris was named the 2010 Educator of the Year by the School Administrators Association of New York State, and in 2013 the same organization named her the New York State High School Principal of the Year. Burris has been chronicling problems with modern school reform and school choice for years on this blog. She has previously written about problems with charter schools in California and a number of other states.

By Carol Burris

The year was 1996. The event was called an “After Dinner” conversation. The place was the Indiana estate of encyclopedia salesman turned insurance giant Steve Hilbert. The discussion leader was Mike Pence.

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“There is no reason even debating the abysmal, atrocious failure of the public school monopoly anymore,” opined Mitch Daniels, then an executive at Eli Lily, and later governor of the state.

The other guests were eager to agree, referring to the public schools as “doomed,” while claiming only competition and an “outside force” could solve the problem. Businessman Fred Klipsch said that private schools, like inner city Catholic schools, were the answer.

When Mickey Mauer of the Indianapolis Business Journal said that the Carmel Schools were doing a good job, Hilbert jumped in to tell him he was wrong. “You can see every conceivable type of child that you never thought you would see in the Carmel School System.” Hilbert was also bothered that Indiana’s “wonderful family values” did not have those values reflected in its public schools. (Hilbert would later be called “Indiana’s Tanning King” and enter into a deal with Donald Trump’s wife that would eventually wind up in court.)

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The “After Dinner” conversation Hilbert hosted, however, was a serious and prescient warning. In the years that followed, three of those dinner guests — Daniels, Pence and Klipsch — would be major players in the quest to privatize traditional public education in Indiana.

Daniels, who was governor from 2005 to 2013, would earn national recognition for his methodical and persistent undermining of public schools and their teachers in the name of reform.

Pence would follow Daniels as governor, pushing privatization even further. Pence would award even more tax dollars to charter schools and make Indiana’s voucher program one the largest in the country.

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Klipsch would start and run a political action committee, Hoosiers for Economic Growth (a.k.a. Hoosiers for Quality Education), that would play a major role in creating a Republican majority in the Indiana House to redistrict the state to assure future Republican control.

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In 1996, however, there were no charter schools in Indiana, nor were there virtual schools or vouchers. Neighborhood public schools served communities in a state that had always taken a “liberal and leading role” in providing public education for its children.

When I visited the state 21 years later, public schools were reeling from 15 years of relentless attack. I found public schools engaged in fierce competition with each other, charter schools, virtual schools and voucher schools for students and the “backpack funding” that came with them.

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Entire public school systems in Indiana cities, such as Muncie and Gary, had been decimated by funding losses, even as a hodgepodge of ineffective charter and voucher schools sprang up to replace them. Charter school closings and scandals were commonplace, with failing charters sometimes flipped into failing voucher schools. Many of the great public high schools of Indianapolis were closed from a constant churn of reform directed by a “mindtrust” infatuated with portfolio management of school systems.

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When I asked who was most responsible for the downward spiral of public education in the state, the answer was always the same: Mitch Daniels, Indiana’s 49th governor.

Daniels: The early years

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After his election, Daniels quickly laid the groundwork for creating a system based on the belief that the market principle of competition would improve education outcomes and drive down costs. Under the guise of property tax reform, Daniels seized control of school funding by legislating that the state would pay the largest share of district costs known as the general fund, while giving localities the responsibility for paying for debt service, capital projects, transportation and bus replacement. Daniels and the legislature also made sure that districts would be hamstrung in raising their local share by capping property taxes so that they could not exceed 1 percent of a home’s assessed value. The poorer the town, the less money the district could raise.

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It also made districts entirely dependent on the whims of the legislature. General funding would become “an annual unknown” subject to the ups and downs of state income and sales tax revenue. The legislature was in control of how the money is doled out and years of a conservative Republican supermajorities resulted in the proportional amount going to poor districts decreasing, while proportional revenue going to wealthy districts went up.

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At the same time, Daniels and the legislature used the state’s control of funding to whet the public’s appetite for school choice.

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Families in Indiana could send their children to other public school districts if they paid the transfer tuition, which could be costly. However, with the state now picking up most of the tab for school funding, the tuition bill would dramatically drop as the district share of funding decreased.

In a 2011 presentation to the American Enterprise Institute (AEI) that you can watch here, then-Gov. Daniels bragged about public school choice by remarking on the “delightful sightings” of billboards and mailings popping up as public schools used public tax dollars to welcome “other students and the dollars that come with them” to their districts.

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Daniels’s second term

By the time he spoke at AEI, Daniels had become the darling of the conservative school reform crowd, rivaled only by Florida’s Jeb Bush. Indiana had an A-F grading system, vouchers, “backpack” funding, and for-profit charters. The rights and dignity of the state’s public school teachers had taken a pounding from Daniels’s collective bargaining reforms.

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Behind the scenes helping it happen was the DeVos family, who funded the effort to push vouchers and privatization in the state.

In his 2013 talk to the Catholic Business Exchange entitled “Putting All Children First,” Klipsch, who had participated in the 1996 dinner event, talks very little about children and a lot about himself. During the first half, he describes his business acumen and in the second he brags about “his PAC,” which he claims created a Republican supermajority in the legislature:

So in 2008 my PAC raised $600,000 as compared to the million two … 2010 came and that was the key year because whoever wins the House that year redistricts the state the following year. We raised a million two. And we had a goal to go from 48 seats in the house to 54 and we went from 48 seats to 60. And … It was that success that allowed them for all the education reform initiatives that were passed in 2011.

What he does not mention to his audience was that the PAC of Betsy DeVos, now the Trump administration’s education secretary, kicked in a huge amount of the cash beginning in 2010.

In 2008, contributions to the PAC were modest — coming primarily from local business executives like Klipsch and Rollin Dick.

Then in 2010, the Hoosiers for Economic Growth PAC received $285,000 in contributions from DeVos’s American Federation for Children Fund, along with an additional $200,000 from Utah resident and founder of Overstock.com, Patrick M. Byrne.

Byrne, who had contributed millions to fund a voucher campaign in Utah, would not contribute again to the Hoosier PAC. But the DeVos family did — with their PACs contributing at least $1.29 million to the Hoosier PAC to date. And the money did not stop there. DeVos family members have also made $1.6 million in direct contributions to Indiana politicians and political causes since 2004, and nearly $2 million in nonprofit grant money, with most of the money going to Klipsch projects.

It is not surprising, therefore, that after securing a Republican supermajority in the legislature, Daniels jammed through an education agenda crafted behind the scenes by GOP power brokers. Nor is it surprising that Jeb Bush, whose education reform organizations were heavily subsidized by the DeVos family, would come to the state to give advice.

Daniels and his state superintendent, Tony Bennett, would throw out the school’s nuanced accountability system and replace it with an A-F system, modeled after Bush’s Florida system.

That A-F system would be plagued by political shenanigans from the start. In 2012, Bennett and his staff altered it, resulting in a dramatically improved grade for Christel House Academy, the charter school of influential GOP donor, Christel DeHaan. DeHaan had contributed more than $2.8 million to Republicans, which included contributions to Bennett himself. A recent change to the grading system by the legislature favored “innovation schools,” many of them charters, by grading them with a less exacting standard, thus making them look more successful than they are.

If the grading system was designed to prove that public schools were the dismal failure that Daniels claimed, the cure for failure was not school improvement through research-based strategies and support, but rather through ramping up competition and choice.

On May 5, 2011, Daniels signed HB 1003 into law, which was the broadest voucher program in the country. When he signed the bill, he picked it up and kissed it.

A tax credit program for private school “scholarships” was doubled, and parents who home-schooled or sent their children to private schools could receive a $1,000 tax deduction. Charters were greatly expanded by legislation that allowed for more charter sponsors, including private religious colleges. The law also permitted public schools to become charter schools and increased funding for the charter sector.

By the end of his term, Daniel’s rhetoric regarding public education was openly hostile. Public schools were called government schools. He referred to attending a public school without the ability to have a voucher as an incarceration. He had created the conditions that spawned a dizzying array of vouchers, voucherlike schemes, for-profit and not-for-profit charters and virtual charter schools.

He put in motion the destruction of entire community school systems. The community school districts of Muncie and Gary were taken over by the state due to a financial crisis the legislature had created. Now similar crises are occurring in Anderson, Michigan City, Elwood and Crawford County community schools.

Each child educated in those public schools is paying the price for a reform system built not to ensure his or her personal success, but rather to maximize the number of students who leave the “government” schools they attend.

Daniels is now the president of Purdue University, where he earns $769,000 a year. As governor, he appointed eight of the 10 trustees that gave him the job at the end of his gubernatorial term, even though he had no experience in academia. According to local news, upon recently giving him a pay hike, the trustees of Purdue “lavished him with praise,” and “[o]ne trustee said evaluating Daniels’ performance and setting his pay was ‘really a joy.’”

The quest to privatize public institutions and services is not over for Daniels. He is presently privatizing Purdue, a public university, by purchasing debt-ridden, for-profit Kaplan University to start New U, an online university. Attorneys general in four states have investigated Kaplan’s student recruiting and enrollment practices.