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Charter school battle in Oregon

PORTLAND, Ore. --As another school year gets under way in Oregon, the ranks of charter schools in the state continue to swell, but a dustup could surface over the expansion of online-only charter schools.

There are now 80 charter schools in the state, up from 70 in the 2006-2007 school year, said Margaret Bates, an educational specialist at the Oregon Department of Education. Two charter schools -- one in Bend and one in Vernonia -- have closed since last year, she said.

New charters have opened across the state, in Cottage Grove, Klamath Falls, Medford, Fossil, Sisters and the Portland area. About 10,000 students now attend charter schools in the state, Bates said, significant growth in a state that came late to the charter school movement.

Charter schools operate under a contract with a school district or the state and receive public funding. Such schools, which must be open to any student, are designed to encourage experimentation and are free of many of the regulations that govern traditional public schools.

All of the charter schools in Oregon are traditional bricks-and-mortar schools, except for the Oregon Connections Academy, which enrolled 1,500 students last year.

The Connections Academy, which contracts with a Maryland-based for-profit company to operate the school, is a K-11 online charter school, sponsored by the Scio School District. The school draws students from all over the state who take their classes, communicate with their teachers and complete their homework via the Internet.

For individual school districts, each time a student decides to transfer to the Connections Academy, it's a loss of at least $6,300, which is the amount of per-pupil public funding.

But after the Oregon Connections Academy opened in 2005, the state passed a law that required at least 50 percent of the students attending any virtual school to come from within the sponsoring district.

The law was designed to stanch poaching of students, and the state funding that follows them, an issue of special concerns to rural school district who've struggled to stay afloat in the face of declining enrollments.

Oregon Connections Academy was grandfathered in, and so hasn't been constrained by the residency requirement, giving them a de facto monopoly.

Now, though, the Lincoln County School District, which already sponsors several local charter schools, has agreed to back a competitor to the Connections Academy.

The new online charter high school would be run by Portland-based Insight Schools Inc., a for-profit company that's associated with the University of Phoenix, a pioneer in online higher education that's owned by Apollo Group Inc.

The school's backers are planning to seek a waiver for the residency requirements from the state Board of Education, said Keith Oelrich, the founder and CEO of Insight Schools, which also runs online charter schools based in Los Angeles, Calif. and Forks, Wash.

The company's goal, he said, is to reach out to students who have dropped out of traditional high schools, though he acknowledged that if the waiver is approved, the new school will also draw some public school students.

He said the waiver is necessary to be able to draw on a broader pool of students to cover startup costs of an online charter school, which Oelrich estimated could top $1 million.

School districts that sponsor statewide online charter schools have a modest financial incentive to do so. Under state law, charter schools keep 95 percent of the per-pupil funding for high school students, but the sponsoring school district gets five percent.

"It probably doesn't add up to a whole lot of money," said Tom Rinearson, superintendent of the Lincoln County School District. "But any little bit helps."

Rinearson said the rural district already offers plenty of online courses for its high schoolers, and is hoping that partnering with Insight Schools will help expand its offerings.

Matt Wingard, a spokesman for the Connections Academy, said the company thinks "more choice is good. If there is another school that wants to provide choice, we think that's great."

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