LAUSD’s “portfolio model” gets an F

January 8, 2019

Clare Lemlich puts the trendy corporate school “reform” proposal known as the “portfolio model” to the test — and explains why it doesn’t make the grade.

LOS ANGELES teachers are preparing for a strike over pay, staff working conditions and students’ learning conditions in the second-largest school district in the U.S.

But at its core, this strike is a battle for the very existence of public education.

One of the key issues that the union, United Teachers Los Angeles (UTLA), is fighting against is Superintendent Austin Beutner’s plan to split the Los Angeles Unified School District (LAUSD) into 32 smaller “portfolios.”

If the district gets away with implementing the “portfolio model,” it will signal that the mass privatization of education is on in LA.


WHAT IS the “portfolio model”?

Teachers protest privatization policies in Los Angeles
Teachers protest privatization policies in Los Angeles (Joe Brusky | MTEA)

The idea is borrowed from Wall Street. This isn’t surprising given that Beutner cut his teeth as an investment banker. Before that, he helped the Clinton administration bring free-market capitalism to Russia after the collapse of the former USSR. He joins a long list of powerful school administrators across the country who have no education experience whatsoever.

On Wall Street, having a “portfolio” of holdings allows investors to profit off the share prices of different stocks, rather than investing in a single company and being tied to its ups and downs. Having a diverse portfolio means investors can then buy stocks in companies they think will make the most money and get rid of the ones they think will fail.

Transferred to the education system, the portfolio model means school boards would treat each school as if it were a stock. Rather than invest in a central public education system, the portfolio is “diversified” to include more options — meaning more charters and private schools, all competing against each other for resources. If a school is struggling, it can be sold off and a new, competitive one can be opened in its place.

The architect of the portfolio model, the University of Washington’s Paul T. Hill, describes his proposal like this:

In this new system, school boards would manage a diverse array of schools, some run by the school district and others by independent organizations, each designed to meet the different needs of students. Like investors with diversified portfolios of stocks and bonds, school boards would closely manage their community’s portfolio of educational service offerings, divesting less productive schools and adding more promising ones.

The portfolio model is the latest corporate school “reform” proposal for applying the logic of capitalist markets to the public education system. In the eyes of its proponents, schools are businesses, school districts are marketplaces, students and parents are consumers, and knowledge is a product to be bought and sold.

The school district ceases to be a central, public planning authority overseeing school policy — and instead becomes the ax-wielder for underperforming schools.


IN ORDER to sell the aggressive restructuring of the portfolio model, the free-marketeers have to show that the school system is in deep financial crisis, which is the cause of it failing students and parents.

This is why the LAUSD is so intent on insisting that it doesn’t have enough money for UTLA’s demands — despite the fact that the district is sitting on nearly $2 billion in reserves and already diverts $600 million a year to unaccountable charter schools. District officials have manufactured a financial crisis in public education precisely so they can put forward the portfolio model as a solution.

Its supporters say the portfolio model makes schools more “efficient,” promotes “local” control and gives families more “choice.”

But looking at its implementation around the country, it’s clear that the portfolio model actually undermines community democracy, allowing monied interests rather than educators to call the shots in schools. And the only area in which the portfolio model has a proven track record of “efficiency” is in degrading public education.

Every district that has adopted the portfolio model — including in New Orleans, Indianapolis, Denver, and Washington D.C. — did so with billionaire backing.

Its advocates operate through education nonprofits and think tanks, but the money behind the portfolio model comes from sources like the Walton family (of Walmart fame), Facebook’s Mark Zuckerberg, Dell tech giants and Eli Broad, one of the world’s richest people. These organizations are undemocratic and unaccountable to the community.

Beutner has surrounded himself with a network of portfolio-model veterans.

They include Cami Anderson, the former Newark, New Jersey, superintendent whose education restructuring caused multiple school closures, mass firings and civil rights violations. She resigned in disgrace after a parent and union fightback.

Until recently, Rebecca Kockler was Beutner’s chief of staff — she was the architect of New Orleans’ mass charterization during the period after Hurricane Katrina. Beutner’s strategy for breaking up the district will be shaped by billionaire-backed research from the accounting firm Ernst & Young and education consulting firm Kitamba.

Although external influence and corporate pressure have helped push the portfolio model nationwide, it can only be implemented with the buy-in of state and local governments.

In Indianapolis, for example, campaigns for school board backed by privatization advocates in 2012, 2014 and 2016 set the stage for the hiring of a pro-portfolio model superintendent.

The charter magnates have the capacity to outspend education unions and other teacher advocacy groups. The election that put Beutner in office in the LAUSD was the most expensive school board race in the country!


PAUL T. HILL’S proposal for the portfolio model specifically singles out unions, claiming they block “innovation” and “entrepreneurship,” and prevent quality education from reaching minorities and the students most in need.

This accusation is hard to take seriously when UTLA is the force currently lobbying to raise taxes on the wealthy to fund public education — a proposal the district has backed away from. UTLA is also fighting tooth and nail to protect most vulnerable students with its demands against racist “random” searches in schools and for an immigrant defense fund for undocumented students.

Hill’s anti-teachers proposals include shortening the duration of teachers’ contracts, forcing staff to bargain individually for wages rather than through collective union agreements, and creating more competition between teachers by offering cash incentives based on performance.

In short, the portfolio model is designed to break the power of organized labor in public education — one of the few places left in the U.S. where workers are organized in large numbers.

Meanwhile, when advocates of the portfolio model say they want to offer parents more “choice,” this is actually code for expanding charter schools. All districts that adopted the model have experienced explosive charter school growth.

Before the model was brought in in Indianapolis, most students went to public schools. Today almost half go to charters. New Orleans is the portfolio model test case — and in the aftermath of the Katrina disaster, public schools were replaced with a portfolio of charters. Education researcher Kenneth J. Saltman called this “the largest and most aggressive experiment in dismantling an entire public school district” ever.

Regular readers of Socialist Worker will be familiar with the aims and outcomes of charter schools. In short, they are schools that receive district funding, but are externally run, either by a nonprofit or a corporation.

Over the long term, they are the first stop on the way to fully removing education from public hands. In Michigan — which is second only to New Orleans in charter expansion — for-profit companies now operate 80 percent of charters.

UTLA President Alex Caputo-Pearl fears the same thing will happen in Los Angeles, warning: “Once [Beutner’s] plan is enacted and the protections for our students are compromised, it will be open season for the privatization industry.”

Among the immediate impacts, charters have the ability to select which students they admit, which leaves the most vulnerable students in a public school system that is further starved of resources.

In North Carolina, Pennsylvania, Indianapolis, Michigan and Texas, charter schools have deepened racist segregation. In New Orleans, the proportion of Black teachers also fell — from 70 to 50 percent. The charter workforce is also largely non-union, though teachers’ unions are making progress, and the first-ever charter school teachers’ strike concluded last month with a victory.


TO TOP it off, there is no evidence that the portfolio model gives students a better education.

Some schools have improved test scores in some areas. But Memphis, for example — once touted as the national example of the portfolio model — saw no improvement. In Newark, outcomes got slightly worse after portfolio-style reforms. In the UK, where a form of charter schools has operated for many years, there is likewise no clear evidence of better student outcomes.

In any case, test scores tell us very little about student progress. Teachers, not investment bankers, are the best equipped to assess that.

In places where test scores have improved, like New Orleans, researchers report that this was mainly due to increases in per-pupil spending — which is another UTLA demand that the LAUSD has refused to meet). Similarly, graduation rates have been shown to rise in districts where per-pupil spending increases, regardless of whether the portfolio model is in place.

Public schools aren’t stocks, and school districts aren’t portfolios. When schools struggle to serve their students, it’s because they lack resources like enough textbooks, counselors, and nurses.

What our schools need is more government investment, more teachers and smaller class sizes — not more competition, privatization and standardized testing. These are precisely the demands UTLA is striking over in January. Every person who supports public education must stand with teachers — and against the portfolio model.

Recent articles

Tuesday, January 22nd

Monday, January 21st

Friday, January 18th

Thursday, January 17th

Wednesday, January 16th

Tuesday, January 15th

E-mail alerts

Further Reading

Today's Stories

From the archives