How is special education paid for in Pennsylvania public schools?

School districts complain that the amounts have not kept up with costs. In 2014, the state modestly increased funding while making some changes to how money is distributed.

Third in an occasional series of podcasts and web “explainers.” To listen to the podcast, click the audio player above.

What is special education?

Special education consists of supplemental services designed for students who have special needs due to cognitive or physical disabilities. The Individuals with Disabilities Education ACT (IDEA), a federal law enacted in 1990, guarantees a “free appropriate public education” to children, regardless of their disability. IDEA reauthorized and built upon a 1975 law that first created a federal mandate for public schools to educate children with disabilities at no cost to the family, in the least restrictive setting possible.

So the feds pay for special education?

Well, not exactly. Not by a long shot, actually. Estimates of the current federal contribution to actual special education costs hover around 15 percent. States and school districts pick up the rest. When governors and state lawmakers complain about “unfunded federal mandates,” special education and IDEA are a top-of-mind example.

Who decides a child is deserving of special education services?

Federal law gives public schools an affirmative responsibility to identify children with special needs and take appropriate action. Parents often take the first step and have a right to insist their child be evaluated. A key step often is the creation of an Individualized Education Program, usually referred to as IEP, which specifies the child’s needs and lays out a detailed plan for meeting them.

What kind of services might an IEP cover?

It can range from speech therapy to intensive programs for children with profound disabilities. The additional services required by an IEP can sometimes more than double the usual per-pupil cost for a school district.

So how does Pennsylvania pay for all this?

With a dedicated stream of state aid to local schools. School districts complain that the amounts have not kept up with costs. In 2014, the state modestly increased funding (for the first time in six years) while making some changes to how money is distributed.

What were the changes in special ed funding all about?

Pennsylvania’s previous special education funding system was set up to discourage districts from identifying too many special education students. This was in response to some instances where school systems were suspected of pushing children into special education categories improperly, just to get the higher special-ed funding.

That’s why, until last year, state special education funding for school districts assumed that, in every school system, 16 percent of students had special needs. Money was allocated based on that percentage of total enrollment. Fixing that set percentage was meant to discourage districts from over-labeling students.

But it also meant that, in a given district, state aid over time could get pretty far out of synch with actual costs. Districts with a higher percentage of students with special needs, were required to provide services without additional state assistance.

A legislative special education funding commission recommended in 2013 that districts should get funding based on their actual numbers of special ed students, with three tiers of payments geared to the relative severity of a student’s actual disability.

That concept was applied in the 2014-15 budget, but only to the small amount of new special education funding (about $20 million).

Charter schools, however, continued to get allocations based on the old system, which only further fueled a long-running dispute between school districts and charters over special ed funding.

Why do charters and school districts squabble over special ed allotments?

Charters receive the same amount for each special education student – the district’s average per-student cost – regardless of the actual cost of services.

Neither charters nor traditional schools are required to spend all of their special education aid on those students. Charter critics argue that charters accept too few students with profound and expensive disabilities. So when charters recieve per-pupil funding at the district’s average cost, charters can benefit financially by enrolling students with needs that are relatively inexpensive to meet.

The difference can be used in whatever way the charter sees fit.

Last year, the state association of school business officials said state data showed that Pennsylvania charters received close to $200 million for special education students that was not spent on services for them.

Charter proponents hotly disputed that analysis. They also argued that any “special education bonus” only partially offsets the way that, in their view, the overall state charter funding formula shortchanges them.

The legislative commission recommended that the new three-tier payment system apply to charter schools, bringing payments more in line with actual costs. But influential charter providers successfully lobbied against this. 

Here’s another twist that has become another bone of contention for some districts: A district that has unusually high special ed spending – mostly because it has more children in that category than the state’s 16 percent assumption – ends up paying an unusually high per-pupil payment to charters for special-ed students.

And that creates more potential savings for a charter that doesn’t serve many children with complicated disabilities.

About this series: Multiple Choices is a collaboration between Keystone Crossroads and the Philadelphia Public School Notebook, an independent, nonprofit source of education news. The project is funded by a grant from the William Penn Foundation in Philadelphia.

Dan Hardy contributed reporting on the charter school payment issue to this article.  A version of his report appeared previously in the Public School Notebook.

In the Multiple Choices podcast, Keystone Crossroads senior education writer Kevin McCorry joins with Paul Socolar, publisher and editor of the Public School Notebook, and Notebook contributing editor Dale Mezzacappa to explain and explore the history, complexities and controversies of public education funding in Pennsylvania.

Look for new installments of Multiple Choices every week for the rest of the spring, as the General Assembly reviews Gov. Wolf’s ambitious school funding and tax plan.