Many school districts around the country are also grappling with the educational and economic impacts, both positive and negative, of charter schools. Although state charter laws and regulations vary, we have identified an immediate need to fully fund educational mandates in IDEA.
Another issue facing government agencies and school districts nationwide is the future issue of funding retirement benefits, a problem that is not unique to LAUSD. In Los Angeles, the future issue of retiree benefits is being tackled by the Health Benefits Committee and the district. However, the MGT report identifies a fiscal crisis right in front of us that affects revenue and expenses today. It is fiscally prudent to manage both issues, but we can immediately address the current problem of the half billion dollar fiscal impact from charter schools through common-sense solutions identified in this policy brief.
Federal Recommendation 1: Fully fund educational mandates in IDEA
Pushing for full federal funding of the IDEA is a critical component to providing districts with dedicated, dependable sources of funding that will be used to ensure every student with special needs receives appropriate supportive services to ensure they receive a comprehensive education tailored to their needs. The district should work with state and federal legislators from the Los Angeles area to advocate for full IDEA funding. This change alone would allow the district to redirect over $700 million of general fund dollars towards increasing educational opportunities across the district.
MGT has calculated the total fiscal impact of unmitigated charter school growth at more than half a billion dollars in decreased revenue and increased costs in the 2014-15 school year alone. If current trends continue, this half billion dollar price tag should be seen as a floor, rather than a ceiling, especially since there are likely unaccounted impacts that fell outside the scope of MGT’s report.
A key component of this annual cost is LAUSD’s ongoing responsibility to provide oversight and support for every independent charter school in the district. Every time an independent charter school opens, district revenues shrink and mandated costs increase, creating an unsustainable financial structure that places every student in the district, and at existing charter schools, at risk. A system where decreased revenue is accompanied by increased costs, and that punishes schools that serve the highest needs students, is not sustainable.
Fundamentally, this system forces LAUSD to constantly choose: redirect money that could otherwise be spent on educational opportunities for district students; or fail to fulfill its oversight and support obligations, leaving charter school students underserved and vulnerable to financial fraud, waste, and abuse.
Failing to address the substantial costs identified in the MGT report will ultimately lead to financial insolvency and the need for state takeover of the largest school district in California. This would create instability for students at both district-run neighborhood schools and at independent charter schools. It is imperative that decision-makers at all levels of responsibility understand the consequences of inaction and take immediate, pro-active steps to ensure district insolvency does not threaten the educational opportunities of every Los Angeles student.