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State needs a rational fix for its method of funding charter students with disabilities

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Pennsylvania’s calculation for funding special education in charter schools is broken. In Philadelphia, special education tuition paid by the District to charter schools has doubled from $11,000 per student to over $23,000 per student in just 12 years. During the same period, special education revenue to the District from the state stagnated at under $5,000 per student.

Rather than basing charter tuition on what the charter spends or needs, the calculation is based on what the charter’s authorizing district spends on its own students with disabilities. That total expenditure is then divided by 16 percent of the district’s student population. The assumption is that since 16 percent is roughly the average percentage of students with disabilities in the commonwealth, it is a close enough estimation to use in the calculation for all districts.

When school districts serve more than 16 percent, such as Chester Upland, which serves approximately 24 percent, the total expenditure is still divided by only 16 percent of the student population rather than 24 percent of students. The resulting quotient leads to a “per-pupil” tuition rate that is inaccurately high.

Additionally, when a district’s charter sector disproportionately serves students with mild disabilities, such as in Philadelphia and virtually every highly charterized district, it also skews the reimbursement rate. In 2012-13, Philadelphia charters served approximately 28 percent of all the city’s public school students and about 28 percent of the city’s students receiving special education. However, the charter sector mostly served students with mild, less costly, disabilities.

For example, Philadelphia charters served 38 percent of the city’s students diagnosed with a speech and language impairment, but only 13 percent of the students with intellectual disabilities and 5 percent of the students with orthopedic disabilities.

As the charter sector grows, it siphons off greater and greater numbers of students with “mild,” or less costly, disabilities from District schools. Students requiring more expensive services, therefore, remain in heavier concentrations in District schools. This in turn causes the District’s “per-pupil” special education expenditures to climb higher. Charter school revenues are then based on these District per-pupil expenditures, which were artificially high to begin with because of the impact of charters. This phenomenon rewards charters with greater tuition each year for siphoning students with mild disabilities from the District.

Last year, a bipartisan Special Education Funding Commission studied this issue and recognized that Pennsylvania’s current calculation harms students left in districts. The commission proposed a rational fix, and two parallel bills, with wide initial support, were drafted in the House and Senate. The bills would have saved districts and taxpayers hundreds of millions of dollars over the next decade and ended the current perverse incentive for charters to underserve severely disabled students.

This legislation was on track to be an all-too-rare example of good government working the way it is supposed to work. Unfortunately, at the 11th hour, charter school lobbyists killed the provisions that applied to charter schools.

If the Pennsylvania General Assembly wants to uphold its constitutional mandate to maintain “a thorough and efficient system of public education,” it must revisit this issue and design a rational fix to the broken calculation for charter school special education funding.

 

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