Changes are needed to fix inequities of special education funding formula for charter schools

Below are the key summary points on why changes are needed now:

  • Charter schools historically have received more money for some special education students than they need to meet their educational needs. Charter schools are not restricted to use their special education funds for only special education purposes.
  • An analysis of charter school annual financial reports shows that in 2012-13 charter schools received more than $350 million from school districts in special education tuition payments, yet charter schools only spent approximately $156 million on special education costs.
  • Charter schools received nearly $200 million more than was necessary in 2012-13 to meet the special education needs of their students. By sending nearly $200 million in excess special education dollars to charter schools, students in school districts and the local taxpayers are being shorted.
  • The current system is unfair because payments to charters are based on the school districts’ expenditures, not the charter schools’ costs of educating students. The current system fails because it does not take into account the actual number of students needing special education services or the type and intensity of support they require to succeed in school.
  • The current system is unfair because the formula does not effectively match the needs of Pennsylvania students with the cost of providing those services. The system is a one-size-fits-all approach. It pays school districts based on calculations assuming that 15% of all students have mild disabilities and 1% has severe disabilities.
  • Changes must be made to take into account the actual number of charter school students needing specialized education services and basing the funding for those students on the degree to which they need those services. To do so, the use of weights must be applied to special education populations in both school districts and charter schools to target special education resources to the students who need them the most.
  • Changes made under Act 126 of 2014 to the state funding formula for special education for school districts should be similarly applied to charter schools. The formula includes factors reflecting students’ needs based on three cost categories. These changes should also be made for charter school funding of special education programs. The categories are: low need (category 1), moderate need (category 2) and high need (category 3). The formula also includes factors reflecting community differences such as market value/personal income aid ratio, equalized millage rate and small and rural school districts. The use of these three categories will improve the accuracy and fairness of funding distribution for charters.
  • While the amount school districts have received in state special education funding was stagnant for the past six years despite increasing special education costs, the total amount school districts sent to charter schools for special education tuition has increased each year. School districts continue to struggle to pay for costs to provide mandated special education services. A new formula is needed to instill fairness, accountability and equity into the system.