City charters get $100M more for special ed than they spend; debate rages in Harrisburg

Philadelphia charter schools received more than $175 million last year to educate special education students, but spent only about $77 million for that purpose, according to a Notebook analysis of state documents.

 

Perverse incentives

As it relates to charter schools and special education, the current funding system is laden with perverse incentives and the potential for abuse.
Under state law, charters receive the same supplement for special education students regardless of the severity of the child’s disability, a sum that is usually two to three times higher than the payment for regular education students.
The amount is based on the average of what the host district spent in the prior year. For instance, in Philadelphia this year, charters got $8,419 for each regular education student and $22,312 for each special education student.
The law does not require charters to spend their special education allotment on services for those students.
“Now charter schools have an incentive to identify kids with the lowest level of service needs and avoid those with the highest level of service needs,” said Gobreski.
And that is what’s happening. An analysis by the Education Law Center showed that in 2011-12, charter and District schools had about the same percentage of special education students. But the charters had many more students, proportionately, in the least expensive disability category – speech and language impaired – and fewer in the categories that include more severe and expensive disabilities such as autism.
“If a student is labeled special education, we pay that per-pupil amount,” said District Chief Financial Officer Matthew Stanski. “We don’t know the kind of disability. The range of disabilities in special education requires different resources.”
This pattern was repeated in other heavily charterized districts, ELC found, including Chester-Upland. There, the state’s largest brick-and-mortar charter school is managed by the for-profit management firm of Gov. Corbett’s largest single campaign contributor four years ago, Vahan Gureghian.
In that year, Chester Community Charter School enrolled 42 percent of the students in the bankrupt district, but 46 percent of the special education students – and 80 percent of those were diagnosed with the mildest, least-expensive disability.
The per-student payment for a special education student in Chester is among the highest in the state: $35,000. Because CCCS drains the mildly disabled from the district, Chester-Upland is left with a concentration of the more expensive students. That drives up the district’s average special education cost, which is then used to determine the charter schools’ payments.
On a smaller scale, the same thing is happening in Philadelphia. Despite the District’s declining revenues, the charter tuition rate for special education students has increased by 19 percent since 2011-12, while the tuition rate for regular education students has declined by 8 percent.
“The current system for funding special education assumes that charters will proportionately serve all students regardless of the level of disability,” said ELC’s David Lapp. “What exists is that the charter system, taken as a whole, is disproportionately serving students with mild or low-cost disabilities.”