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Budget earmark for reading program raises questions

6/20/2013

By DAVE RANNEY

By DAVE RANNEY

KHI News Service

TOPEKA -- A late, largely unnoticed addition to the budget bill that was approved in the final days of this year's legislative session appears to be a boon for a Kansas company that sells access to a computer program intended to help elementary students learn to read.

The company, Educational Design Solutions, is co-owned by Don Fast, a former Newton teacher and special education director, who said he runs the franchise-type firm from his home in rural Harvey County.

The budget proviso was added at the request of Rep. Marc Rhoades, a Newton Republican who chairs the House Appropriations Committee. It would set aside $12 million -- $6 million a year for two years -- for a grant program designed to give schools access to an instructional software package called Lexia Reading Core5. In Kansas, Educational Design Solutions is the sole licensing agent for Lexia Reading Core5.

Fast refused to disclose the other business owners but in an email responding to questions from KHI News Service said that he had no financial relationship with Rhoades.

"I do not, nor do any of the owners of EDS, have any direct or indirect financial relationship with Rep. Rhoades or his family," said Fast, who has a master's degree in education from Fort Hays State University and a doctorate from Wichita State University. "We have not been involved in his campaigns as donors or volunteers."

He said he employs eight people and, according to his company's website, all but one are sales people with territories in Kansas, Nebraska and Missouri.

And Rhoades said he didn't know anything about Lexia or Fast until Fast came to visit him at his Statehouse office during the session.

"The truth is, I didn't know of nor hear of Lexia or EDS until session time when Don Fast came into my office for a visit," he said.

Earmark

It is unusual for a budget bill to earmark a state expenditure for a specific company or product. There were no legislative hearings held on the merits of the proviso or the Lexia product prior to its approval.

Instead, Rhoades presented the proviso during conference committee negotiations when there were dozens of other bargaining items on the table and legislative tensions were at or near their peak. Senate negotiators acquiesced to the House budget plan largely as part of a bigger effort to bring the drawn-out session to a close.

Most state purchases of more than $5,000 are subject to an open and competitive bidding process, but legislators can circumvent that.

"Kansas procurement law does allow for sole source purchases under certain circumstances," said Chuck Knapp, director of operations and public affairs at the Kansas Department of Administration.

One example would be for the purchase of locks at the state prisons, if officials conclude a single provider can better assure security. But legislators also can circumvent the standard procurement procedures.

"The Kansas Legislature has the authority to create additional exceptions, exemptions and modifications to existing law," Knapp said when asked if state policy would allow fulfillment of the Lexia proviso.

Results for students

Rhoades said he added the proviso after it became clear that Gov. Sam Brownback's plan for improving the state's fourth grade reading scores had stalled in the House.

"You can't overlook the results of Kansas schools using Lexia," Rhoades told KHI News Service. "My only interest is real results for students."

Rhoades has a background in computerized or online education. According to his financial disclosures on file with the secretary of state, he works part-time for the University of Phoenix, a for-profit school where students from around the globe can earn course credits and degrees online. The university has sometimes been criticized in the U.S. for its aggressive student recruitment practices, its lack of academic rigor and its low graduation rates. But it also is one of the largest providers of higher education on the continent and enrolls many older, working students who otherwise might not pursue higher education.

Some Kansas school districts, including Wichita's, the state's largest, already use Lexia and officials there said it has been helpful to teachers, effective for students and they plan to expand its use.

"This past year was our first full year of Lexia implementation," said Susan Arensman, a spokesperson for Wichita USD 259. "We expect much greater usage next year."

Arensman said the district has a three-year, $1.5 million contract with Fast's company. The district's license with the firm allows 3,000 students to use the Lexia software at any one time. She said about 10,000 Wichita students used the program last year.

According to the website of the Lexia parent company, the software uses animation, sound effects and well-crafted scripts to pique youngsters' interest in exercises that help them work on whatever issues may be keeping them from reading at grade level. The software also provides teachers with "real-time reports" on each student's progress as well as a "data-driven action plans" for addressing deficiencies.

"Every keystroke provides information as to where a student is at, what their skill level is, and where they need help," Fast said.

Most of the students in the schools that use Lexia, he said, were expected to use the program for 20 minutes a week, though a struggling student might spend 100 minutes a week on the program.

Suzanne Smith, who oversees the Wichita district's Division of Learning Services, Curriculum, and Professional Development, said she expected to apply for one of the Lexia grants funded by the Rhoades proviso.

"It's a very engaging program for students, very motivating," she said. "It's pretty easy to implement."

Questions and criticisms

The Lexia software has its supporters, but the budget proviso that would expand its use in Kansas schools has drawn questions and criticisms:

* From literacy experts here and in other states who doubt the program's effectiveness compared to other methods.

* From the state's leading children's advocacy group and from legislators upset or concerned about the process by which the funding was diverted from other children's literacy programs.

* And from Lexia competitors who said they would have liked the opportunity to bid on the state's business.

Here's a sampling of their comments gathered in interviews with KHI News Service:

A legislator: "The process for getting this into the budget bill was rare, if not unprecedented," said Sen. Laura Kelly of Topeka, the ranking Democrat on the Senate Ways and Means Committee. "I've never seen or heard of a company being named in an appropriations bill. It seemed shady."

A competitor: "In all my years in public education, I've not seen something like this before and I've never been part of something like this before," said Alexa Posny who spent about 25 years at the Kansas education department, including a stint as commissioner from 2007 to 2009. "Working for the public, we always opened things up to competition. That's how you learned what's out there."

Posny is now vice president of state and federal programs at Renaissance Learning, a Wisconsin-based company that competes with Lexia. She said her company's software is used in 36,000 schools worldwide and Renaissance would have bid on the Kansas business had the proviso not excluded that possibility.

"Oh, of course," she said. "Any company that supports reading instruction would go after it. Not just us."

A reading expert: "They all come up with evidence -- albeit potential evidence -- that kids could improve their abilities to read by using their product," said Richard Allington, a skeptic of computerized reading programs. "It's all marketing. They're selling a product. Lexia is one of these programs. But there virtually are no commercial programs that have any solid, reliable evidence that they improve reading achievement."

Allington is a professor of literacy studies at the University of Tennessee and a past president of both the International Reading Association and the National Reading Association. He said there are about 125 reading programs being commercially marketed to schools.

A children's advocate: "Everything we know about achieving literacy outcomes is that to be effective, you have to start early, before kids are school-aged," said Shannon Cotsoradis, chief executive of Kansas Action for Children. "It doesn't make sense to target $12 million in literacy resources on children after they're in school."

About Educational Design Solutions

Fast said Educational Design Solutions doesn't have an office. Instead, most of the company's business is conducted either during in-person consultations or via computer.

"Lexia is being used in over 150 elementary schools in Kansas," he said.

He declined to identify them, but said most are in or near Wichita.

Rhoades said that Educational Design Solutions had data showing that a sampling of 1,180 first, second, and third graders had found that 527 were reading at or below their grade level. But after using Lexia Reading Core5 for six months, only 30 third graders remained below grade level. The sampling period was between August 2012 and February 2013.

Spokespersons for the Wichita school district told KHI News Service they had worked with Fast to develop that data.

The proviso

Rhoades said he had concluded that if the governor's reading improvement plan wasn't going to pass, the state should at least create an alternative to the literacy programs it has historically funded that focus on tutoring preschool children and which are overseen by the Kansas Children's Cabinet.

"For anyone who sincerely cares about children and education, our shared goal should be improved reading skills for a child's long-term educational success," Rhoades said. "Our measurable goal is for students to read at or above their grade level. Lexia Reading has a data-based, proven track record which tailors a continually updated path to reading for each student to address their specific reading challenges."

According to the proviso, the $12 million would underwrite a "Kansas Reads to Succeed" grant program to be administered by the Kansas Children's Cabinet with the condition that successful awardees use their grants to pay Educational Design Solutions for their access to Lexia Reading Core5.

The proviso also stipulates that the grants would "be offered first to schools already using Lexia Reading Core5," or a similar program, meaning that Educational Design Solutions' current customers would be encouraged to upgrade their current "limited-use" software licenses to "unlimited-use" or perhaps choose it over a competing program already in use by the district.

Fast said the grants also would give an additional 200 Kansas schools first-time access to Lexia Reading Core5.

Fees and commissions

Fast declined to say how much licenses for Lexia Reading Core5 cost or how much his company expects to collect in commissions.

Collin Earnst, a Lexia vice president at the company's headquarters in Concord, Mass., also declined comment on the company's licensing fees. He confirmed, however, that Educational Design Solutions is the company's sole "reseller partner" in Kansas.

Charlene Laramore, assistant superintendent in charge of curriculum and instruction for Derby Public Schools, told KHI News Service that the district has 80 Lexia licenses spread across nine elementary schools.

"They cost about $400 apiece," she said.

Allington, the literacy professor at the University of Tennessee, said licensing commissions for those who sell reading software products typically range from 15 percent to 30 percent of the total cost.

Meg Roe, vice president of marketing at Catapult Learning, a New Jersey-based company with reading programs in 34 states and a Lexia competitor, said the commission for Educational Design Solutions probably would be about 20 percent. If she is correct about that, it would mean about $2.4 million in commissions for the firm as a result of the proviso, if the grant money is fully spent.

She also said her company would have bid on the Kansas program, if it were opened up.

"We'd have definitely bid on it. Absolutely," she said. "We already have a considerable presence in Oklahoma, so we'd be very interested in bidding on Kansas."

A better solution?

Allington, the Tennessee skeptic, said Kansas would be better off putting the $12 million into Reading Recovery, a national program developed at Ohio State University that matches specially trained reading instructors with students known to have trouble learning to read.

"Out of the 153 reading programs reviewed by the What Works Clearinghouse, Reading Recovery was the only one that was rated as having strong evidence of a positive effect on reading achievement," Allington said. "The only one."

The What Works Clearinghouse is a project of the U.S. Department of Education.

In Kansas, Reading Recovery is housed at the Jones Institute for Educational Excellence at Emporia State University.

"We work with first graders who are struggling to read and write," said Annie Opat, director of the Kansas program. "Within 12 to 20 weeks, we get about 80 percent of them to a point where they're able to go back to the regular classroom and be successful. It works, but it's incredibly important to get to the kids early on."

The program, Opat said, worked with about 700 students last year, using $120,000 in federal and private grants to cover the costs of working with 90 teachers throughout the state. The teachers' salaries were paid by their respective school districts. Opat's salary is covered by Emporia State University.

If the Kansas Reading Recovery program had $12 million, Opat said, it probably would use $10 million to enroll more teachers - more than school districts can pay for now -- and put the remaining $2 million into a professional development initiative.

The $12 million, she said, would allow the program to offset district expenses and reach an additional 2,000 students.

"Wouldn't that be great?" she said.

Replacing the governor's plan

Rhoades' proviso replaced the remains of Gov. Sam Brownback's plan to improve the state's fourth grade reading scores. The governor's initiative would have required school districts to hold back third graders who failed reading tests and would have spent $6 million a year on a grant program for school districts with above-average numbers of students with reading problems and $1 million a year for $10,000 awards to the 100 elementary schools that showed the most improvement in student reading.

The Senate adopted Brownback's plan after changing the holdback requirement's focus to first graders instead of third graders and adding several exemptions. But the Brownback initiative stalled in the House and ultimately morphed into the Lexia proviso.

The governor signed the budget bill into law on Saturday. His office did not respond to questions about the proviso submitted by KHI News Service last week.

The KHI News Service is an editorially independent initiative of the Kansas Health Institute and is committed to timely, objective and in-depth coverage of health issues and the policy making environment. Find more about the News Service at khi.org/newsservice or call (785) 783-2529.