PA charter schools may see drop in funding with new special education formula

Part 116 of 115 in the series Educating America

By Maura Pennington |

Special education funding bills create a tiered formula for Pennsylvania schools.

PHILADELPHIA — A proposed new formula for special education funding in Pennsylvania will better tailor resources to fit diverse levels of student need, lawmakers say.

But some schools might end up losing money in the process.

For charter schools operating on thin margins, cuts of thousands of dollars per student could imperil the schools’ entire financial standing.

The proposals before the General Assembly are House Bill 2138 and Senate Bill 1316. They were developed out of the findings of a commission created by Act 3 of 2013. Both proposals put in place a three-tiered system of funding based on the cost and incidence of disability.

About one out of six students in Pennsylvania receives special education services. The previous formula assumed this rough 16 percent estimate and provided flat funding, no matter the nature of a student’s needs.

Lawmakers crafting the new plan say it will better reflect the needs of individual students.

“We do not take a one-size-fits-all approach to education — each student’s unique needs are taken into consideration — and the way we distribute funding to schools for these programs should be no different,” said Rep. Bernie O’Neill, R-Bucks, the main sponsor of H.B. 2138.

Charter advocates support the intent of the legislation, but say its application is problematic.

For traditional public schools, the tiered funding formula applies only to new money. For charter schools, it applies to the entire state appropriation for special education.

“This isn’t a traditional versus charter issue. This is an issue of equity for students with special needs,” said Bob Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools.

The commission recommended in December that lawmakers apply “the same principles for a new formula … for all local education agencies, including school districts, charter schools and cyber charter schools.”

But that’s not the case.

“There’s an inconsistency between the recommendations of the funding commission and the legislation,” Fayfich said.

Here’s where the discrepancy comes out:

When a student chooses to attend a charter school, the home district makes a per-pupil payment with a number of deductions.

In Philadelphia, which has the largest charter sector in the state, the base per-pupil allocation is $8,500. For special education, it is $22,000.

Some organizations, including the Pennsylvania Association of School Business Officials, argue that districts are overpaying charter schools at the $22,000 flat rate.

Instead of having all schools pay the same, the three-tiered structure in the new proposal would multiply the basic education per-pupil cost by different factors to determine how much money is spent on each student.

The main sponsor of the Senate’s S.B. 1316, state Sen. Pat Browne, R-Lehigh, said the new formula is a more accurate methodology to address the diversity of student needs.

“That’s what we’re trying to get to — accuracy,” Browne said.

According to the proposed new formula, a tier-one student at a charter school would receive one and a half times the basic education per-pupil cost of $8,500, or $12,750. That’s significantly less than the current system. However, a tier-three student would receive seven times the basic education cost, or $56,000.

If there are more tier-one students, as there are likely to be since they are of higher incidence, less money would follow them into the charter school, affecting the overall budget of institutions that already receive reduced funding per-pupil.

Additionally, with the proposed legislation, traditional public schools are held harmless, meaning the new formula only applies to new money appropriated. This year, it will apply to $20 million.

For charter schools, the funding formula applies to the entire appropriation for special education, not just the increase. That number this year is $1.02 billion.

“The implication of the new formula is significantly greater for charter schools,” said Fayfich.

PennCAN, an education reform nonprofit, in its own research, says the Young Scholars Frederick Douglass Charter School in Philadelphia gradually would see deeper cuts to special education per-pupil funding as a three-year phase-in occurs. In 2014-2015, the schools would lose $455,000. By the 2016-2017 academic year, it would be more than $1.1 million.

Lawmakers are discussing the nature of this phase-in, possibly stretching it to six years.

“There is a question of how we consider the fiscal implications of implementation. That’s an ongoing conversation and we’re taking it very seriously,” said Browne.

Expect to hear more about this issue in the weeks before lawmakers return to Harrisburg in early June. Groups on both sides of the issue are holding events this week to drum up support for their case.

Contact Maura Pennington at and follow her on Twitter @whatsthefracas.

Category: Education, News, Pennsylvania, charter schools, disability, funding formula, Philadelphia, Special Education