Charter Funding Compared to Traditional Publics

Lately I've been interested in understanding what it should cost to deliver an education that meets all state standards.   In the last two posts, I've been using the work of the 2004 school finance task force to shed light on that topic.  I'll return to that discussion in future posts, but I want to focus on what successful charter schools are spending as compared to traditional public schools.

I'm not an expert on this topic, but really, who is?   It is not my goal to dive into a charter versus traditional publics debate.  My view is that if charters and traditional publics were both funded based upon cost of service, with appropriate adjustment for student demographics, both forms of public school would have a fair chance to meet their state obligations.   Perhaps there is someone who could provide a comprehensive and encyclopedic presentation on this topic.  But I dived into the MDE expense and revenue reports for my home district, St. Cloud, and that of a respected charter, Harvest Prep, to see if I could get some hints on the "what should it cost" question.  These are just two examples out of a wide universe of examples, so one ought not to draw any final conclusions.  

Harvest Prep Demographics

Harvest Prep has 284 Adjusted students. Its demographics are shown above.Twenty-eight of its students, or 10.7 % are in special education.  It spends $1,073,834 on special education, or   $38,351 per special education student, or $4098 per each of its 284 students.Tracking special education revenues and expenditures is important because traditional publics run large deficits in special education. To my surprise, MDE data tells us that Harvest Prep's special education reimbursements for 2017 were higher than its expenses. Harvest Prep received 1,210,324.37 in revenue for special education in the same year, or $4,263 per each of its 282 adjusted students. 

According to MDE data,  Harvest Prep has total General Fund revenues of $20,972 per student and no special education deficit! 

Now, let's look at my home District St. Cloud.  Here are St. Cloud's demographic data:

St. Cloud District Demographics

 St. Cloud spends $32,661,733 on 1987 special education students, or $16,437 per special education student, half of what Harvest spends per special education student.  St. Cloud receives $18,903,497 reimbursement for those expenditures.  Where Harvest Prep breaks even on special education, St. Cloud runs a $13 million deficit.  

St. Cloud’s General Fund revenues amount to $13,638 per student, compared to Harvest Prep's $20,900 per student.  However, St. cloud's 13,638 per student must be adjusted by a $1300 per student subtraction to cover the special education deficit. In other words, if you want to compare St. Cloud’s general education funding to Harvest Prep’s you have to lop off $1300 yielding $12,300 per student compared to Harvest Prep’s $21,000.   

Since I'm not an expert in charter school funding, I may be missing some important nuances.  Let me know what you think.   But it seems to me that Harvest Prep's funding is perhaps an important piece of information on what districts that serve large populations of students with higher educational needs ought to be receiving.   More to come on this topic. 

Inve$ting in our Future Report Points to Necessary Changes

In the last post, Jvonkorff on Education discussed the recommendations of the 2004 education finance task force that Minnesota should adopt “a rationally determined, learning-linked, student-oriented and cost-based Instructional Services Allocation”.   The rationale for a cost based instructional service allocation is quite straightforward.   Beginning in the 1990's, Minnesota began to transform our K-12 educational system from one that specified a specified minimum hours of classroom instruction, to one that specified a specified set of learning outcomes with proficiency standards.  It is beyond dispute that students come to school with varying degrees of readiness to learn the prescribed material. 

Common sense, and now decades of experience, lead to the conclusion that students with higher educational needs require more support for their learning, including better teaching, a more thoughtful rigorous curriculum, and significantly more learning time.   Over three decades, in keeping with Minnesota's commitment to high standards, the legislature has passed a series of state mandates to districts to enhance learning for all students.  To avoid losing our train of thought, I've listed the major learning mandates at the bottom of this post. 

It stands to reason, doesn't it, that if we want to run Minnesota's system in a thorough and efficient way, as the constitution requires, we would begin by asking "how much does it cost, to do the things we must do?   As a lawyer, when a client asks me to undertake a major case, we need to address how much the case is going to cost.  The more work the case is going to take, the greater the cost, and if the client wants experienced lawyers to manage the case, they will certainly expect that the cost per hour will be higher.   If the client asks me to handle a case that is likely to cost $100,000 for only $50,000, I'm going to be compelled to refuse, except in rare occasions where I'm donating my time and talent.  But in Minnesota, the state throws cost out the window and its not working for students with higher educational needs, and it is particularly not working for school districts that serve large numbers of students with high educational needs. 

With that preface, let's return to the 2004 Inve$ting in our Future report and then the following post will look at the 2006 preliminary costing report that followed.  Inve$ting in Our Future warned that Minnesota must increase funding substantially for schools and districts with high student populations having higher educational needs. As mentioned in the last post, the Task Force Report urged that Minnesota's funding formula should take into account the added costs included with relevant characteristics of each student (e.g., disabilities, poverty, school readiness, English language learners, and student mobility).

The task force pointed out that students with higher educational needs come to school behind.  If we allow them to stay behind, then they spend their entire school year trying to catch up to their advantaged peers, but in the same instructional time.  The Task Force stated what should be obvious, if you have more learning to do, you are going to need more time, and probably extra help.  The Task Force asserted that we need to get those students caught up as soon as we can, and that means that we should be providing students who need it extra learning time in the early grades, and lots of it.   It argued that:

For large proportions of students to achieve at the Minnesota academic standards level, school funding will have to be directed to provide (1) earlier¬ in-the-life-of-a-student instruction primarily in the form of greater individualized instruction in the primary grades (kindergarten through 3rd  grade) and (2) extended school day, school year, and school career exposure to systematic instruction.

Governor Pawlenty disbanded the Task Force as it was about to complete its work on the actual revenues required to deliver an education that meets all state standards, as our Constitution requires.   In the next post, I'll look at the costing report that picked up where the 2004 task force left off.

Minnesota State Standards

Those laws include  MINN. STAT. §120B.02, subdiv. 1 (2017) (“Educational Expectations And Graduation Requirements for Minnesota’s Students”); MINN. STAT. § 120B.02, subdiv. 1(a) (2017) (requiring the commissioner to adopt rigorous academic standards); MINN. STAT. § 120B.021 (2017) (listing required academic standards); MINN. STAT. § 120B.018, subdiv. 2 (2017) (defining “academic standard” as “a summary description of student learning in a required content area under section 120B.02 or elective content area under section 120B.022”); MINN. STAT. § 120B.11 (2017) (listing programmatic standards and requiring school boards to align strategic plan with world’s best workforce requirements); MINN. STAT. § 120B.024 (2017) (discussing course credit and academic standards); MINN. STAT. § 120B.11, subdiv. 1(c) (2017) (defining “World’s Best Workforce”); LEAPS Act, MINN. STAT. §§ 124D.65, subdiv. 6, 124D.58–.64 (2017); MINN. STAT. § 125A (2017) (“Special Education and Special Programs”); MINN. STAT. §§ 125A.01, subdiv. 2 (defining “Dyslexia”), 125A.56, subdiv. 1 (2017) (“Alternate Instruction Before Assessment Referral”).  

Remembering the Pawlenty Education Task Force Finance Report

The purpose of this post is to summarize some of the key points one can derive from the 2004 Minnesota education finance commission report, Inve$ting in our Future (2004) and the costing study which followed, Estimating the Cost of an Adequate Education in Minnesota (2006).   Together, the two reports provide powerful ammunition to support the conclusion that Minnesota’s public education finance system is constitutionally inadequate. 

• The two reports taken together suggest that the deficit in special education funding is only part of the total shortfall in state funding required to meet constitutional standards and the actual K-12 education budget.  The shortfall in special education funding is $1.5 billion per biennium, and the Task Force Report is convincing evidence that the constitutional shortfall is greater than that.   
• The two reports support the conclusion that even as of 2006, the shortfall in constitutionally adequate funding was over $2 billion per biennium.  Since 2006, the legislature has added major costly requirements to mandatory requirements in the world’s best workforce, LEAPS Act, and dyslexia law, and there is every reason to believe that the under-funding deficit is even higher today.   
• The two reports support the position that to educate students with higher educational needs, the state must fund additional learning time – more learning time during the school day, and summer learning – for the students with higher educational needs. 
• The two reports support a conclusion that districts with high concentrations of students with higher learning needs disproportionately carry the burden the state's  inadequate funding.
 

In the 1990's there had been a growing recognition that when a state converts to a proficiency based education system, it is essential to adjust state funding to meet the financial challenges required to educate students with higher educational needs to higher levels of proficiency.   In 1998, the National Conference of Legislatures urged its members to shift school finance to an adequacy approach which would require substantially  more funding to educate children with higher educational needs.  (Educational Adequacy: Building an Adequate School Finance System).   

Equal funding among school districts was not a sufficient measure of constitutional adequacy, the Report explained:

An adequate school finance system should provide for and ensure the use of sufficient funds necessary to develop and maintain the needed capacity to provide every student with a reasonable opportunity to accomplish expected education objectives that are clearly articulated and measurable.

 Shortly after assuming the governorship, Governor Pawlenty initiated a school funding task force to study Minnesota's current funding system and to make recommendations on the changes in our school finance system necessary to support a proficiency based regimen. 

In 2004, the Minnesota Task Force issued its report “Inve$ting in our Future.”   (You can read the report itself by clicking on the hyperlink. ) Among other things the Investing in our Future report called for “a rationally determined, learning-linked, student-oriented and cost-based Instructional Services Allocation”.  The Report explained:

The Instructional Services Allocation (ISA) should be an annual revenue amount sufficient to cover full dollar costs of ensuring Minnesota public school students have an opportunity to achieve state specified academic standards. These standards are connected to a comprehensive instructional program offered by schools.

This formula should take into account the added costs included with relevant characteristics of each student (e.g., disabilities, poverty, school readiness, English language learners, and student mobility). In addition, Minnesota’s new funding formula should compensate districts for cost factors beyond their control (e.g., student population sparsity, technology access, and higher costs of living).

If the Governor had followed the task force recommendation, he might have led Minnesota's executive and legislative branches to transform Minnesota's school finance system to a cost based system.  To do that, it would have been necessary to develop data to determine the costs requisite to teach students with higher educational needs and then to advance budgets that included that cost information.  But the Governor, who by then had Presidential ambitions, chose to terminate the Commission's work and pursue a very different course.  In the next post, we'll look in more detail at the Task Force's findings and their implications for Minnesota's current school finance system.  

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