Unspent funds for special education in Pennsylvania questioned

From The Philadelphia Inquirer:

Chester Community Charter School, the state's largest charter, would be among the biggest losers if a Rendell administration proposal to change special-education funding for charter and cyber charter schools becomes law.

The 2,150-student Delaware County charter school received $21,840 last school year for each special-education student from its home district, Chester Upland. That's more than three times the $6,812 subsidy it got for each regular student.

But state calculations show that the charter spent less than a third of the $9.4 million it received for special-education students on special education.

Gov. Rendell is proposing that charter special-education subsidies that aren't spent on special education be returned to the school districts that fund the charters. State Education Department spokesman Michael Race said in an e-mail last week that the problem of charters' not spending all their special-education funding for that purpose is "widespread."

The governor's proposal, he added, is "a simple matter of accountability to taxpayers for their dollars. If money is expended for special education, it should be spent on actual special-education needs. If not, it should be returned."

The governor also wants an 80 percent cut in the per-student amount Chester Community and other charters would get for students with "speech or language" disabilities. State education officials said those students generally do not require as many additional services, and it costs less to help them than those in other special-education categories.

Last, Rendell proposes a new formula for funding special education at Pennsylvania's 11 cyber charters, which provide instruction over the Internet. He wants the per-pupil special-education subsidy set at $13,695 for next year, based on the lowest special-education cost among cyber charters whose students met state standards last school year.

Chester Community Charter's special-education students "receive the extra help that they need in order to succeed," board chairman Spencer B. Seaton said in a letter to The Inquirer. Parents, he added, see the charter as "the only beacon of hope that their children have in order to achieve a safe and successful education."

When Rendell made the charter special-education funding proposal in February, he said charter schools received $78 million in special-education subsidies last year, but spent only $50 million on special-education services.

The state totaled each charter's direct special-education spending from required annual financial reports and added up how much school districts were paying charters for their special-education students. A few schools did not report any special-education expenses.

Because the state analysis had to be ready in time for the governor's February budget proposal, it was incomplete. The Inquirer totaled payments to charters that were not included in the February calculations or whose payments were incomplete in the state tally.

That analysis showed that special-education overfunding was worse than the state reported. Charter schools across Pennsylvania received about $91 million in subsidies, while spending only $50 million. They were able to spend the surplus funds for any purpose they wanted.

This school year, Pennsylvania has 127 charter schools, with 67,000 students.

Special education for charters is funded in a different way than for school districts. School districts pay a sizable portion of special-education expenses on their own. They get a state subsidy, calculated using overall student enrollment and adjusted for wealth. Typically, school districts spend more on special education than they receive in subsidies from the state.

Charters get a per-child payment for their special-education students based on the special-education costs of the districts where the children live.

Rendell's proposal addresses a funding quirk that state officials believe costs local school districts money while benefiting charter schools.

Local school districts by law provide a full array of special-education services, from those for mildly disabled students with reading problems to those for children with severe cognitive problems and autism. The most severely disabled are sent to special schools.

Many charters end up with special-education students who are less severely disabled than those in most school districts.

In those cases, where relatively high-cost school districts are funding typically lower-cost charter school special-education students, the possibility of subsidy windfalls exist.

Lawrence Jones, CEO of the Richard Allen Preparatory Charter School in Philadelphia and president of the Pennsylvania Coalition of Charter Schools, blasted the Rendell plan in a recent interview, saying it was part of an effort "to limit and retard the growth of cyber charter schools and charter schools in Pennsylvania."

Bill Winters, CEO of Chester County's Collegium Charter School, said the state's calculations did not include many indirect special-education expenses.

Last year, state figures showed that Collegium took in about $1 million more for its special-education students than it spent on special education. Winters said that if expenses such as the portion of the school's mortgage that pays for special-education classrooms and the amount of classroom time regular teachers spend implementing special-education plans were included, the school spent more on special education than it brought in this year.

Chester Community Charter School last year had the largest dollar gap between the funding it received for its special-education students and what it spent on special education - about $6.6 million. The school is run by a for-profit management company, Charter School Management Inc.

The relationship between the charter school and its home school district, Chester Upland, illustrates how the funding formula works to the charter's benefit.

Each enrolls about the same percentage of learning-disabled children - 27.6 percent last school year in Chester Community Charter, and 24.7 percent in Chester Upland.

But Chester Upland had more than five times as many severely disabled students; it was in the top 10 percent statewide. This year, 117 students went out of the district for specialized services costing about $3 million.

Chester Community Charter, by contrast, had the second-lowest percentage of severely disabled students in Pennsylvania among charters or districts. No students left the school for specialized services last school year.

The situation is reversed when it comes to mildly disabled students with a speech impairment - difficulty producing speech sounds or problems with voice quality - or a language impairment - a problem using words in proper context.

At Chester Community Charter, about 49 percent of special-education students were speech- or language-disabled last school year, compared with 5 percent at Chester Upland.

A state review of the charter's special-education program last year said that 72 percent of special-education students there received three hours or less a week of special-education services.

Randi J. Vladimer, an attorney for Chester Community Charter School, declined to comment, citing earlier responses from Seaton, the school's chairman. In January, after the publication of an article that raised questions about how the school's money was being spent, Vahan H. Gureghian, the CEO of Charter School Management Inc., sued The Inquirer for defamation, saying that failed business talks between him and Inquirer publisher Brian P. Tierney motivated that and other articles late last year.

Inquirer editor William K. Marimow said Tierney had no involvement in the stories. Scott K. Baker, general counsel for Philadelphia Media Holdings L.L.C., owner of the paper, called the suit baseless and denied that Tierney had been in negotiations regarding a business transaction.

About 18 of Pennsylvania's charter schools - less than 15 percent - spent more on special education last school year than they received from school districts in special education funding.

One of them was Montgomery County's Souderton Charter School Collaborative. The 151-student school spent about $176,000 more on its 24 special education students than it received from their school districts. That's mainly because the school has a paraprofessional in each classroom who works intensively with special-education students and others who need extra help; it has no separate special-education rooms.

"The focus becomes more about individualizing than about special education - individualizing for all children," said Wendy Ormsby, the school's director of organizational development and its founder. Special-education funding cuts would make it harder for the school to carry out its work, she said.

Lisa Kern, the mother of two children at the school, agrees. One son, now in seventh grade, was very withdrawn when he started kindergarten, and in third grade was diagnosed with a learning disability that affected his reading. "Every year, he has made such great strides," she said. "I think it is because of the individual attention he received. . . . He's an outgoing kid now. He's taking a leadership role."

Students who struggle say that they don't feel singled out or stigmatized.

"Everybody here learns at their own pace," said fifth grader Kendalyn Ostrander, who gets extra help in math.