Competition: the way a monopoly is dismantled

This week we offer a series of blogs looking at how the traditional public school system in Kentucky – which enjoys a virtual monopoly over deciding where your child can go to school – has been seduced by its own power in arrogant ways that adversely impact students and taxpayers alike. We will show how giving Kentucky parents the competition provided by badly needed school-choice options is the way to curb that monopoly power.

Monopoly attitude shortchanged kids and unjustly rewarded adult in Dayton Schools

I wrote yesterday about the recent audit in Jefferson County Public Schools that found what looks like a bloated jobs program for high paid staffers short-changes students by millions of dollars a year.

Today, we move up the Ohio River from Louisville to the Dayton Independent School System in Northern Kentucky. Dayton provides another disappointing example of education attitudes gone amok.

About a year ago, an audit on the Dayton system from the Kentucky Auditor of Public Accounts found outrageous misappropriation of education dollars to the benefit of a former superintendent.

Some of the disturbing findings in this report include the following regarding former Superintendent Gary Rye, who:

• Received payment of $146,276 in retirement related benefits that were not authorized by the Dayton Independent school board.

• Received $36,237 in payment for 62 additional leave days not approved by the board.

• Received $7,101 for 40.5 sick leave days he used but not deducted from his sick leave balance.

• Was incorrectly paid $4,091 for seven annual leave days used that were not deducted from his annual leave balance.

• Used district gas credit card to purchase $21,464 in fuel with no board approval.

• Received $5,323 in reimbursement for expenses he did not incur and duplicate reimbursements for mileage.

• Submitted false reimbursement request documents to the district totaling more than $3,100 during a five-year period.

• Worked under a contract that contained vague terms and insufficient board oversight, allowing him to repeatedly increase his monthly travel allowance.

• Had his contract extended by the board, which granted the extensions without reviewing the actual agreement or cost of benefits provided.

Clearly, as this press conference for the release of the auditor’s report makes clear, a my-monopoly-can-do-no-wrong culture of deception ran unchecked in Dayton for years.

State Auditor Adam Edelen found the Dayton situation so outrageous that the findings were referred to the Federal Bureau of Investigation, the Kentucky Teachers’ Retirement System, the Kentucky Department of Revenue and the Kentucky State Committee for School District Audits.

Legal action was finally taken in federal court. During the resulting trial:

“Assistant U.S. Attorney Laura Voorhees…noted that Rye had ‘systematically drained this district’ for eight years. The theft came as the 834-student district was struggling financially and academically.”

In mid-April 2014, the trial concluded with an embezzlement conviction for the former Dayton superintendent.

Thus, accountability for arrogance and abuse finally came to at least one participant in this school district, but only after those responsible for the district’s finances allowed the situation to go on unchallenged for years, all to the detriment of a generation of Dayton’s students.

That’s what happens in monopolies. Monopolist self-interests trump the best interests of everyone else.

How do you disarm a monopoly? The answer is to create competition.

The obvious need for educational system competition in Kentucky is one of the reasons why the Bluegrass Institute favors more school choice, including the nationally popular option of public charter schools. With more school choices, Kentucky’s traditional public school system would be forced to pay more attention to doing its job efficiently and well. Otherwise, traditional public schools would lose market share to these alternative education choices.

To sum up, I think former Kentucky legislator Bob Heleringer says it best. Heleringer writes:“…things will never change unless a reform-minded (next) governor and General Assembly empower parents to direct their education tax dollars to the public, private, religious schools of their choice.”

It is time for Kentucky to join 42 other states that have already figured this out and – at a minimum – to enact charter school legislation. Then parents, not education monopolists, would have a bigger say in the education of their children.