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House of Representatives
Session of 2019 - 2020 Regular Session


Posted: April 25, 2019 02:49 PM
From: Representative Dan L. Miller
To: All House members
Subject: Special Education Payments to Charter Schools
This legislation is part of a package of eight charter school reform bills designed to treat all Pennsylvania public schools, traditional and charter schools, and their students equally under law.

The legislation would protect students and taxpayers by implementing a final recommendation of the Special Education Funding Commission.

The current funding formula provides a disincentive to charter and cyber schools to accept high-cost special education students, and it penalizes those that do.

This recommendation was to apply the same funding principles used in the formula for school districts to determine a school district’s payment for a student enrolled in a charter school. This provision includes a gradual phase-in that has the effect of applying the new methodology only to newly enrolled students.

Charter schools historically have received more money for some special education students than they need to meet their educational needs. 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.

Said another way, charter schools received nearly $200 million more than was necessary to meet the special education needs of their students, with no restrictions to use their special education funds for only special education purposes. This scenario happens because the flawed special education tuition calculation requires school districts to pay charter schools regardless of the costs of special education services provided by charter schools. When the Special Education Funding Commission’s recommendations were enacted into law in 2016, the charter school provision was removed. This bill would correct that and bring charter school special education payment formula in line with school districts.

Currently, special education funding is paid on a per-student basis for charter and cyber charter schools, with money transferred from the school district of residence for each eligible student. The existing funding process incorrectly uses an assumed percentage of 16% of all children enrolled in the district of residence and paying the same rate, regardless of student differences in educational need and cost. Compared to school districts, charter and cyber charter schools on average enroll relatively few students with high special education costs.

This legislation will include the Special Education Funding Commission recommendation to apply the same principles for the new formula applicable to school districts for charter and cyber charter schools, using the three categories to improve the accuracy and fairness of funding distribution for charters. This change will be phased in over three years, so that the new reimbursement rate affected district budgets in three equal steps.

The new special education charter school tuition rate will be determined by multiplying the charter school regular education tuition rate by the appropriate category weight for each charter school special education student.

Introduced as HB1331