Schools for Profit

By NANCY GIBBS

Torn between a desperate plight and a radical plan, the parents, teachers and politicians who jammed the decrepit Hartford Board of Education building in Connecticut last week agonized over their chance to make history.

Jane Carroll teaches second grade. "I've heard people here tonight say they feel good about the Hartford school system," she said. "Well, I'd feel better if I had a copying machine at school. I'd feel better if I could get construction paper for my classes, if my child had a globe in her geography class. Nothing has changed over the years, nothing has happened. Now, I want something to happen."

Lisa Beaudoin's voice broke as she spoke. "Our kids are dying in this school system," she said. "My seven-year-old daughter is completely bored at school. She doesn't have art, she doesn't have gym, she doesn't have music, all because there isn't enough money for them any more. And you know where all that money is going? To teachers' salaries."

Paul J. Comer, another parent, rose to his feet. "A child's mind is a terrible thing to waste, but it is even worse to make money off it," he said. "I cannot stand the fact that someone may make even one dollar at the expense of a child's brain."

Throughout the night there were cheers and warnings. "We will cooperate with you if you decide to do this," said Don Berghuis, who recently retired as a social worker for the school system after 26 years. "But we will watch every step you take. Heaven help you if you mess up."

In the end the Board voted, 6-3, to do what other cities have threatened but none have dared try: to hand over the entire district -- all 32 schools, all 26,000 kids, all $200 million in the budget -- to a private company, Minneapolis, Minnesota-based Education Alternatives, Inc. The decision came after months of research and weeks of debate. The atmosphere was so tense that a board member was receiving threatening phone calls warning of "terror" if the deal went through. E.A.I. chief John Golle and his team lobbied the board for months. To hear the warring sides tell it, the decision represented either the first step toward dismantling public education or the first step toward saving it.

E.A.I., one of the most controversial young corporations in the country, has long searched for a whole district that would put its methods to the test. Under the five-year contract, which starts immediately, E.A.I. will pay the bills, buy supplies, fix buildings, shape curriculum, train teachers and, when it's all over, pocket half of every dollar, if any, it saves the city of Hartford. The company said it would immediately pump $1.6 million into fixing the most ramshackle buildings, and another $14 million into new technology. The board remains in final control, and can cancel the contract on 90 days' notice.

The stakes could hardly be higher for the eight-year-old firm, which runs two private schools in Eagan, Minnesota, and Paradise Valley, Arizona, designed as laboratories to refine new teaching methods, as well as nine schools in Baltimore, Maryland, and one in South Florida. Landing an entire district represents an enormous coup: the Hartford deal will increase annual revenues six-fold, from $34 million for the past fiscal year to approximately $200 million.

It also represents an enormous risk. Hartford, one of the poorest cities in Connecticut, has been spending roughly $9,000 per student annually, well above the national average of $5,900, and yet has one of the highest dropout rates and the lowest test scores in the state. Fewer than half the city's ninth- graders graduate four years later; 95% of fourth-graders need remedial help. Acting superintendent Eddie Davis, whose two children attend Hartford schools, is blunt about the crisis. "Our performance is down, our costs are up," he says. "Our 2,000-odd teachers make on average $52,000 and rank in the top five in the state in terms of salaries. Yet we rank 112th out of 169 towns in terms of direct expenditures on instructional materials."

Davis was hired last year by a rambunctious school board with five new members and a taste for reform. New member Stephanie Lightfoot, 43, was the first to survey the damage and propose E.A.I. as an antidote. "I was worried that we might only be able to do things piecemeal or halfway and not get it all done," she says. "We are hiring E.A.I. to assist us in implementing our strategic plan in a comprehensive way." Several members visited E.A.I. schools, talked to teachers and parents there and came away impressed.

Some E.A.I. opponents charge that the situation has been improving and that radical action was premature; others admit the need for reform but question the method. "We are guinea pigs," says David Mulholland, president of the Connecticut Federation of School Administrators, "and if this experiment doesn't work, the people who will suffer are our kids." Behind all is the question of what will be the driving motive: Improving schools or improving E.A.I.'s bottom line? "This whole business about it being a win-win situation, that they can serve their customers and profit as well, is too glib," charges Alex Molnar, education professor at the University of Wisconsin -- Milwaukee, who argues that schools are inherently unprofitable.

Among the most outspoken critics in Hartford, as in other cities that have flirted with such reforms, are the teachers' unions. They view recruiting E.A.I. as a veiled attempt at union bashing, since the company was granted a role in negotiating future contracts and in hiring and firing teachers. "We don't have a dollar to spare now," argues Hartford Federation of Teachers head Susan Davis, "and to see a private company come in and take out money that could be put back into the school system worries me." School board president William Meagher was skeptical about the company's promises: "I don't think they've done what they said they would in Baltimore. They promised dramatic improvement down there in test scores, for example, and they haven't achieved that so far at all."

There is indeed a certain vagueness about how E.A.I. intends to lift scores and performance. There is much inspirational talk of "enhanced instruction, efficient management, greater parental involvement, individual attention for students." But the results are not yet in from the other E.A.I. laboratories, and in any case the Hartford experiment dwarfs them all.

But uncertainty may itself be used to advantage. "I look at it this way," says Susie Hinton, an elementary school principal. "They are a vehicle that we can use to break down an old way of doing things. It's hard to change unless you have someone come along who is an outsider, who can come in and stir up the pot. The threat alone of E.A.I. has stirred up the pot to such a degree around here you can't believe it." She adds, "The system is broken now, and we can't go back to business as usual."

With reporting by Richard N. Ostling/New York and John Steinbreder/Hartford