Virtual charter schools, which allow kids to learn online from home, may be the wave of the future in a rural state like New Mexico. But they're also unproven and politically contentious, as a recent decision by the state's Public Education Commission illustrates.

Last week, the PEC—an elected body that essentially serves as a statewide school board—rejected the application of New Mexico Connections Academy, which would have been New Mexico's first state-chartered virtual K-12 school.

"[It was] a political decision, a political issue," says Paul Gessing, a board member for the Santa Fe-based NMCA and the executive director of the libertarian Rio Grande Foundation.

Gessing says the PEC has been reluctant to support charter schools because they shake up the education establishment. If the PEC supported new educational models, he says, it would be like "a McDonald's being sponsored by a Wendy's."

But Public Education Commissioner Jeff Carr, D-Colfax, has his reasons for voting to reject NMCA's application.

"I don't want a physician working on me who's gone to a virtual school," Carr, a history teacher at Taos High School, tells SFR. "A computer is never going to replace a teacher."

Gessing and Carr represent two sides of an increasingly politicized debate over virtual charter schools. K12 Inc., a corporation that partners with public schools to operate virtual charters, opened its first location in New Mexico this school year. Already, the state has provided more than $400,000 in funding for that school, the Farmington-based New Mexico Virtual Academy, and advocates are working to replicate the model elsewhere.

NMCA board chairman and outgoing state Sen. Mark Boitano, R-Bernalillo, says virtual charter schools expand education options, employ licensed teachers and help students who need to learn at a different pace.

"That's the whole point," Boitano, who helped write the state's charter law in 1999, tells SFR. "We're supposed to be change agents. [There's] supposed to be disruption to the status quo."

But critics say disruption may not be a good thing. So far, virtual charter schools' effectiveness is unproven at best.

"They raise a whole host of questions," David Harrell, deputy director of the Legislative Education Study Committee, says. "They create educational opportunities in circumstances that the state's never imagined."

New Mexico has already experimented with virtual learning through its Innovative Digital Education and Learning program, which provides online courses to public schools. Virtual charter schools like NMVA take it to the next level by transferring the classroom almost completely to the web. (NMVA does have a community building in Farmington, but many of its students live elsewhere.)

Across the nation, more than 200,000 students log in to school from a computer each day. Santa Fe Public Schools Superintendent Joel Boyd says SFPS is also looking into having an online school.

The idea is controversial. A study released in July by the National Education Policy Center found that only half of the students at schools operated by K12, the largest virtual charter school company in the country, graduate on time. (New Mexico's graduation rate is 66.1 percent.) The study also found that, in 2011, just over 27 percent of K12's schools met the performance standards mandated by No Child Left Behind—far below the nationwide average of 52 percent. In other states, K12-associated schools have endured criticism for poor student performance and racking up too much debt.

But Gessing says virtual schools have other advantages. A Rio Grande Foundation study found that virtual charter schools operate at a lower per-student cost than traditional public schools and cited efforts in states like Ohio and Hawaii that successfully combined traditional classroom schooling with online education.

"I wouldn't say there's a clear-cut illustration that these schools are failing," Gessing says.

Regardless of educational performance, K12 is reaping profits. In the fourth quarter of fiscal year 2012, the company reported $170.4 million in revenues—a 32.8 percent increase over the previous year.

Had NMCA's charter application been approved, however, it would have sourced curriculum and material from a different company: Baltimore-based Connections Education, LLC. Boitano, who says he was at first skeptical about virtual education, says Connections' accountability system helped convince him.

But there's another link: Until July, Connections was a member the American Legislative Exchange Council, the corporate-backed, right-wing nonprofit—for which Boitano serves as an education task force manager. Boitano says any impression that ALEC convinced him to back virtual charter schools is "not going to fly," adding that he's only been to two or three ALEC conferences in his 15 years as a legislator.

But questions also linger about the legality of virtual schools in New Mexico. PEC Vice Chairwoman Carolyn Shearman, D-Eddy, says she supports online education but voted against NMCA's application because of a 2008 Attorney General's Office advisory and a 2009 charter schools division opinion saying the PEC cannot approve schools that aren't "brick-and-mortar." She says charter laws need to be updated to address virtual schools.

NMCA board members say they plan to appeal the PEC's decision to Public Education Secretary-designate Hanna Skandera, who helped push similar reform efforts in Florida, whose agency recommended approval of NMCA, and who has the authority to override the PEC. Whatever happens, Harrell expects the debate to continue.

"It's a fundamental issue the Legislature will wrestle with next session," he says.

Editor's note: A previous version of this story stated that K12 schools had been "shut down" for failing to improve student performance; no K12 school has been shut down for that reason. SFR regrets the error.