The North Carolina Court of Appeals heard arguments Wednesday on whether a for-profit company should get taxpayer money to operate a virtual charter school that offers online-only classes to public school students.
The court is considering a bid by a North Carolina non-profit created by Virginia-based K12 Inc. to offer classes to students whose parents opt out of existing public school classrooms. The nonprofit called N.C. Learns sought a charter giving it special permission to operate outside many normal school rules.
The nonprofit and the nation's largest online educator want to set up a charter school with a statewide reach in a deal with Cabarrus County's school board. N.C. Learns agreed to pay 4 percent of its revenue to the school system in Cabarrus, located north of Charlotte, as well as paying K12. A state judge last year blocked the plan from advancing without approval of the State Board of Education.
"Under the constitution of this state," assistant state attorney general Laura Crumpler told the three-judge panel, "the intent was for the state to have oversight of these charter schools in a consistent way because they have to decide for the entire state. We're talking about children. We're talking about parents. We're talking about the ability to run the schools."
K12 is the nation's largest online educator and has managed online schools in more than two dozen states with mixed academic success. The virtual schools allow children from kindergarten through 12th grade to study at home or on the road, the company said on its Web site. Students have contact with teachers by telephone, through online meetings, and sometimes face-to-face, the company said.
The state already offers some online classes through the N.C. Virtual Public School, which offers online classes to students trying to keep up with coursework, interested in subjects unavailable locally, prepping for tests, or seeking career planning help. The proposed online charter school would be the first of its kind in North Carolina.
"The concept of a virtual charter school which can pull from school districts from Murphy to Manteo ... certainly is extraordinarily different" from the norm for North Carolina schools, said Robert Orr, an attorney representing the North Carolina School Boards Association. "There are financial implications. There are governance implications," that effect school boards around the state.
The State Board of Education decided in 2011 that it would not approve any virtual charter schools for the next school year, arguing the General Assembly had lifted a statewide limit on the number of charter schools but did not address what to do about online versions.
But the state school board never voted or took any other definitive decision to postpone consideration of online charter schools, said Christy Wilhelm, a lawyer for N.C. Learns. There was never anything more than a statement by former state school board chairman Bill Harrison that the issue would be shelved until it was studied, she said.
An administrative law judge who initially ordered that the virtual school get its charter without the state school board's blessing found that it was not "acceptable for one board member on an administrative board in the state of North Carolina to effectively cancel a state statute. That is our disagreement with this whole situation," Wilhelm said.
When Wake County Superior Court Judge Abraham Penn Jones overturned that administrative ruling last year, he said the online school anticipated enrolling about 1,800 students and could have collected about $18.5 million in state and local funds,
Herndon, Va.-based K12 reported in May that its profits for the nine months ending March 31 rose to $25 million, up 70 percent compared to the same period last year. The company's yearly financial results are to be announced later this month.
A Court of Appeals ruling is expected in a few months, and the result could be appealed to the state Supreme Court.