A larger portion of LAUSD students have special needs compared to independent charters. Funding formulas disproportionately penalize district schools for serving this high-needs population.

Sanford Providing appropriate support and a comprehensive educational program for special education students is both ethically right and legally required. However, the existing systems of funding this moral and legal mandate financially disadvantage the schools that serve those students requiring the most intensive support.

odiously As shown in Figure 2, special needs students are overrepresented at district schools and underrepresented at independent charter schools, on a per capita basis. This is particularly true for those with the most severe disabilities. This enrollment imbalance, combined with insufficient state and federal funding structures, places additional unfunded financial and instructional responsibilities on the district.

At the federal level, the Individuals with Disabilities Education Act (IDEA) is meant to ensure that students with special needs are provided with a free and appropriate public education that is tailored to their individual needs. State level funding formulas are meant to provide school districts with the funding needed to comply with IDEA. Unfortunately, the federal government has never fully funded the mandated educational requirements of IDEA, and in California the Local Control Funding Formula (LCFF) is applied in such a way as to require school districts to use general funds to ensure every student with special needs receives a comprehensive education.

This population disproportionality, combined with the MGT finding that unmitigated charter growth will contribute to financial problems at LAUSD, means that special education students and their parents have particular cause to be alarmed by the report’s findings as the district is providing the bulk of the services to the students most in need.

LAUSD educating more high-need special education students than independent charter schools

While LAUSD enrollment has declined, the share of special education students has increased from 11.5 percent in 2004-05 to 13.5 percent in 2014-15. In contrast, Special Education students only accounted for 8.1 percent of independent charter students, as of December 2013. More strikingly, of those special education students enrolled at LAUSD schools 30 percent are considered “Moderate to Severe”, double the percentage of the highest-needs special education students attending independent charter schools.

The exact cause of the increase in the share of special education students falls beyond the scope of this brief. However, it must be noted that similar discrepancies between charter schools and district-run schools across the country have led to allegations that some charter schools implicitly limit their student bodies to ensure high scores on standardized tests. A 2013 Reuters special report found, for example, numerous instances of charter school applications which “[r]equire[d] that applicants document any disabilities or special needs. The U.S. Department of Education considers this practice illegal on the college level but has not addressed the issue for K-12 schools.”

Whatever the reason behind this discrepancy here in Los Angeles, MGT’s analysis shows that overall, charter schools serve a different population of special education (SPED) students. LAUSD has a significantly higher proportion of the highest-need SPED students compared to charter schools. Figure 2 highlights several other categories of students with special needs and compares their enrollment rates to the overall ratio of independent charter school enrollment

to the total number of LAUSD students.  Sixteen percent of students within the boundaries of LAUSD attend independent charter schools. However, this ratio does not carry across different categories of high-need SPED students. Just seven percent of students requiring autism support attend independent charter schools.

State laws and funding formulas penalize district schools for serving higher needs students

The State of California does not allocate funding based on the actual need or cost of instruction for SPED students. For example, a student with severe mobility issues would require significant staff support throughout the school day, while a student with a mild speech impediment may require less frequent support. Although the first student’s support services would cost significantly more than the second’s, current funding formulas do not distinguish between the different services each of these students will receive. Therefore, although LAUSD incurs higher SPED student instruction costs relative to its charter schools, it receives the same amount of funding per student ADA regardless of need.

In other words, district schools must stretch fewer dollars to educate greater numbers of high-need special education students because state funding formulas do not account for higher costs associated with educating high-need students, and federal mandates remain unfunded. There are three mechanisms by which the district incurs higher SPED instructional costs than independent charter schools.

First, the District must transfer more dollars from general revenues to supplement the shortfall in funding received specifically for those students, in order to cover the increasingly higher costs of instructing a larger proportion of higher needs special education students.

Second, the district funds 14 full-time SPED staff to support charter schools, but funds those positions largely through district revenue that ostensibly should be used to support in-district SPED services.

Third, because state law allows charter schools to belong to any Special Education Local Plan Area (SELPA) anywhere in the state, the district created a Memorandum of Understanding (MOU) that, in effect, provides a subsidy to the charter schools through a discount to the special education contribution that, in theory, should be contributed to “equitably”. In effect, this SELPA MOU was created as a concession to keep charter schools from going outside the district to a SELPA such as the El Dorado County SELPA, located in Lake Tahoe over 500 miles away, whose fee structure was designed to attract charter schools, undercutting other districts like LAUSD.