CRC Column

Some people believe, mistakenly, that charter schools can be selective with regards to the students they enroll and that this selectivity accounts for the difference in student composition when compared to traditional public schools in Michigan.  One example people point to is the concentration of special education students in charters vis-à-vis traditional public schools.  CRC’s recent report on special education finances sheds light on the common misperception surrounding special education enrollment in charter schools.

Under federal law, public schools throughout the United States have a responsibility to provide a free and appropriate public education (FAPE) to children with disabilities in the least restrictive environment.  Charter schools in Michigan (known as public school academies or PSAs) are considered public schools under provisions of the 1963 Michigan Constitution and state law and must adhere to federal and state special education laws, including the FAPE mandate.  Therefore, the same special education laws, rules, and regulations that apply to traditional public schools also apply to charter schools.  Although many charter schools require students to apply for admission, schools may not categorically deny admission to students on the basis of disability.  Furthermore, once enrolled, a special education student is entitled to all the services required by his/her Individualized Education Plan (IEP). 

Just as general education students are enrolled in both traditional public and charter schools, students with IEPs also attend both types of public schools. However, proportionately more students with disabilities are found in traditional public schools compared to charter schools.  In 2010, 12.8 percent of the total K- 12 students in traditional public schools had IEPs (see table below).  This compares to 9.7 percent of the total K-12 students in the charter school setting.

Compared to 2000, the statewide concentration of disabled students in the traditional public school environment in 2010 was relatively unchanged at 13 percent.  (Between 2000 and 2010 the concentration peaked at 14.2 percent in 2006).  Compared to 2000, the number of students with IEPs in traditional schools in 2010 was down nearly 25,000; however, the total K-12 enrollment in traditional districts also was down proportionately. Therefore, as a percentage of the total, the number of students with IEPs in traditional schools in 2010 was the same as it was in 2000.

In contrast to the decline in the traditional public school setting, the number of students with IEPs in charter schools more than tripled between 2000 and 2010.  Much of this change was attributable to the growth in the number of charter schools and charter enrollment.  Although charter schools were authorized in the mid-1990s, growth in the number of charters and student enrollments did not occur until the early 2000s. Steady growth continued throughout the 2000s until today.

Recent state law changes allowing for a greater number of charter schools will likely accelerate charter enrollment growth in the coming years.  Between 2000 and 2010, the number of charter schools increased substantially, as did the total enrollment in these schools (slightly more than double).  Over the same period, the percentage of students with IEPs enrolled in charters increased from 5.4 percent to 9.7 percent – a greater proportion of students with IEPs chose this educational alternative.  Changing demographics, along with greater school choice options, are likely to further change the composition of student enrollment in both traditional public and charter schools going forward.

One area where school budgets have felt growing pressure over the last decade, during years of constrained revenue growth, is spending on special education.  CRC recently examined special education finances to provide policymakers with a comprehensive review of the issues surrounding this very important topic.

For a ten-year period ending in Fiscal Year 2010 (FY2010), Michigan total special education spending increased at an average annual rate of 4.8 percent per year, double the average annual increase in inflation over the period.  In FY2010 (most recent data), school districts reported $3.4 billion in combined special education expenditures, up 60 percent from the amount in FY2000.  Significant annual spending increases from 2000 to 2006 (between 6 and 8 percent annually) accompanied the growing special education population. As special education annual enrollment growth tapered off and began to decline in 2006, spending growth moderated (around 3 percent per year).  Over the last decade, total spending increased at a 4.8 percent annualized rate or twice as fast as the change in inflation (2.4 percent per year).

Adjusted for inflation, per-pupil special education spending increased from $12,327 in FY2000 to $14,397 in FY2010, or 17 percent. In comparison, total K-12 per-pupil spending, adjusted for inflation, increased 1.4 percent over the same period (from $9,503 per pupil in FY2000 to $9,633 per pupil in FY2010).  Over the last ten years, special education spending grew faster than overall K-12 spending, both in the aggregate and on a per-pupil basis.  Further, this spending exceeded changes in inflation.  A key factor in this growth was the steady increase in enrollment.  Another likely factor that contributed to this growth was the higher costs associated with delivering special education services and running related programs.  These costs are driven by smaller class sizes, the need for special education aides in the classroom, the rising number of specialists, and the costs of diagnostic and professional support services (nursing and various therapies).

Annual spending levels and growth rates result from the state and federal mandates that districts must adhere to.  These mandates require specific services, some costly, and leave little wiggle room for districts to control costs.  Also, the state aid system does not provide any incentive to control costs, which contributes to the moderate growth rates.  The state aid system, a result of the 1997 Michigan Supreme Court’s Durant decision, is a fixed percentage reimbursement model.  Districts are guaranteed the same level of reimbursement (roughly 30 percent) for special education services regardless of the cost.