Capitolwire: Charter schools say special education funding formula will ‘put them out of business.’
May 05, 2014
HARRISBURG (May 2) — Charter schools could now have six years, instead of three, to comply with a new state special education funding formula being proposed by lawmakers, thanks to an amendment passed in the Senate Appropriations Committee last week.
But advocates say the tweak does nothing to address the inequity of the formula, which — in a worst case scenario — could force charter schools out of business.
Senate Bill 1316 — and its companion House Bill 2138 — would scrap the state’s current formula that assumes 16 percent of students in each of Pennsylvania’s 500 school districts require special education services. In its place, the Senate bill’s prime sponsor, Sen. Pat Browne, R-Lehigh, proposes a formula that weighs factors including student needs, poverty, property tax levels and “rural and small district conditions.”
The formula would only apply to additional funding given to school districts above the 2010-11 levels and, in the case of charter schools only, ties the allocation to the basic education funding formula. This provision that applies only to the traditional public schools is the crux of the problem for charters.
“We have no problem with schools being reimbursed for actual costs, but the formula should be applied consistently for all public schools,” said Robert Fayfich, Executive Director of the Pennsylvania Coalition of Public Charter Schools. “Under the proposed implementation, regardless of the time frame, special education students in charter schools will receive 30-60 percent less than the same child with the same challenges in a traditional school. That appears to be discriminatory and based solely on the type of public school they have chosen to attend.”
Bill Winters, the CEO of Collegium Charter School in Chester County, says SB 1316 would cut $3.9 million from his budget and shut the doors on 2,200 students from kindergarten through 12th grade. He says the school’s special education enrollment could near 400 students — just under 15 percent — next year.
“It puts us out of businesses,” he said during an April 22 conference call with other charter school directors from across the state. “The entire charter school movement would be eliminated in PA if these bills go through unamended.”
Browne introduced the legislation on March 17, four months after the Special Education Funding Commission — on which the senator served as co-chair alongside Rep. Bernie O’Neill, R-Bucks — released its recommendations regarding a new special education formula.
He said the “phase-in” amendment is designed to prevent charter schools from financial collapse.
“The commission’s responsibility was to put together a methodology that was dependable, not to start with reimbursements and work backwards,” he said.
Winters said Friday the new amendment only delays the inevitable.
“Extending the roll-out to six years will only delay the closure of charter schools unless the basic education funding is corrected prior to having the full impact of SB 1316 executed,” he said. “It is my understanding that all charter schools will have difficulty remaining solvent if this bill is passed and the basic education funding is not corrected first.”
Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi, R-Delaware, says the bill is scheduled for a final vote sometime this week before it moves to the House for consideration.
The six-week time line leaves little room for legislators to digest the full implications of the formula, Winters says, placing charter schools in a vulnerable position.
“I believe that there are some in the Senate and House who would like to see charter schools eliminated and that these people are encouraged in their views by teacher unions and by district school board and district business professional organizations,” he said. “Second, I believe that a much larger percentage of these people do not understand the implications of the bills upon which they are being asked to vote.”
John Swoyer, CEO of the MaST Community Charter School in Philadelphia, says he, too, has encountered the same ignorance among legislators about the impact of the formula on schools like his own.
“I think that’s the biggest point, politicians that I’ve talked to just don’t understand what this will do to charter schools,” he said. “There are schools that are on that list that within six months the formula would destroy their program or cut significantly into their function. I agree, schools will definitely close.”
Winters says the special education formula may appear fair when viewed separately from the basic education formula, but when combined, “they spell disaster for charter schools.”
“Are these bills politically motivated? I guess it depends upon who you ask,” he said.
The Pennsylvania State Education Association — a union representing more than 180,000 public school teachers, including some in charters, and support staff — says it has “no interest in changing a law that would be unfair to charter schools.”
“But traditional public schools also argue that the current system requires local school districts to overpay charter schools for special education costs,” said Wythe Keever, the union’s assistant communications director. “The purpose of this bill is to make sure there is a fair way to distribute funds for educating special-needs whether they are in charter or traditional public schools.”
Keever says a new formula only solves part of the problem and without more resources at the local level — where most education costs are funded — little will improve for students.
“State funding for special education has not been increased in six years,” he said. “Most districts lack the resources to meet the needs of students. This has forced school districts to reduce spending on other critical educational programs or raise local property taxes to serve students.”
Keever said the current system forces school districts to reimburse charter schools for special education costs “that are not linked to a charter’s actual costs.”
“School districts have paid special education tuition rates to charters that are nearly double the standard tuition rate,” he said. “Charters can redirect any unused funds elsewhere, giving them an incentive to over-classify students as needing special education services.”
Swoyer says about 181 of MaST’s more than 1,200 students — just under 15 percent — qualify for special education services, with most falling into the Tier One category, which is the least expensive level of the proposed three-tiered system. When asked if the school rejects special needs students who fall into the more expensive tiers, he dismisses the criticism.
“We have over 5,000 kids on the wait list for 96 spots,” he said. “Other than sibling preference, we use a lottery system to fill the open slots.”
MaST is just one of the 86 charter schools in Philadelphia, the area advocates say would hurt the most if SB 1316 passed in its current form. Swoyer says the new formula, compounded with the proposed cuts to charter school employee pension payments, would drain $3.4 million from the school’s budget.
“We wouldn’t close our doors right away, but $3.4 million is not sustainable,” he said. “It would certainly have a gigantic impact on our program.”
And while stopping the bill would be the best option, Swoyer said, he hopes lawmakers will at least agree to extend the hold harmless provision to both traditional public schools and charters.
“A special education cut of this magnitude — even if phased in over three or six years — would severely restrict charter schools’ ability to provide quality services to their neediest students,” said John Bounder, Policy Analyst and Communications Office for the Commonwealth Foundation. “This could potentially come on top of other funding cuts in legislation that addresses the pension ‘double-dip,’ unreasonably squeezing charter schools’ budgets and threatening the educational choice of the nearly 120,000 students they serve.”