During a hearing that could determine the future of the financially embattled Chester Upland School District, lawyers for the district's major charter schools on Monday hammered at the Wolf administration's rescue plan, which hinges on a $24.7 million cut in state payments to the charters.
Before a Delaware County Court judge, the attorneys spent about 21/2 hours grilling the district's state-appointed receiver, Frances Barnes, about the need for such steep cuts.
Barnes, along with Gov. Wolf and top officials of his administration, has said the way that charters are reimbursed for students in special education or online academies is so unfair that Chester Upland will not be able to afford to open in September without changes. He said the ailing district already has an accumulated deficit of $23.7 million, in part because of an unfair funding formula that has led to a spike in charter school payments.
"It has crushed the budget of Chester Upland School District," Barnes said.
He and other witnesses said that special ed students at the district's three charter schools are less severely disabled than those in traditional district schools, and therefore cost less to educate.
The lawyers for the charter schools pointed out that the district does not know exactly how much the charters need to teach special ed students. They argued that the administration's appeal before Judge Chad F. Kenney was an end run around the 1997 state law designed to fix the reimbursement formula, and sought to portray the proposed cuts in payments as both arbitrary and not sufficient for the charters to operate.
If the judge rules in the district's favor, "what's going to happen on Wednesday of next week, and all of the children show up at Chester Community Charter School - and there won't be money for special ed students?" asked Clifford Haines, representing that school, the district's largest.
The hearing, which will continue Tuesday in Media, is the latest battle over the growth of charter schools. The administration has portrayed the Chester Upland case as singular - more than half the district's students attend charters - but state Education Secretary Pedro Rivera on Monday told reporters in Harrisburg that the case shows the state's current funding formula doesn't work.
The state and its receiver want the judge to approve a $20.7 million reduction in how much the district must pay charter schools for special ed students. The changes would cut the reimbursement rate by more than half, from $40,315 per student to $16,152, and stem from a formula devised in 2013 by a bipartisan legislative panel seeking to bring the payments in line with what it actually costs to teach students in special ed.
In addition, the administration is asking for steep cuts in the reimbursement rate for students in cyber charter schools, which would save an additional $4 million in the coming school year. Wolf has proposed a statewide cut in payments for online charter schools, but his measure has stalled amid the state budget stalemate.
Officials say the proposed changes would turn a projected $22.8 million deficit for 2015-16 into a nearly $3 million surplus in Chester Upland. And, they argue, it will help end a decades-long cycle of mounting budget gaps, layoffs, and declining enrollment in the district. Without relief from the court, district officials say, it will be the traditional schools, not the charters, that won't open next week.
David E. Clark Jr., CEO of Chester Community Charter, has said the proposal "makes no sense, legally or morally."
He attended the hearing, as did other charter school advocates. About 300 staffers from Chester Community, some carrying signs such as "No Funding, No Peace," rallied outside the courthouse before the gavel came down. Many wearing T-shirts with the slogan "#chesterstudentsmatter" filled the courtroom, but filed out when the clock struck 3 p.m., the end of their workday, even as the hearing continued.
Chester Community is managed by Montgomery County attorney and entrepreneur Vahan Gureghian, the largest single donor to the campaign of former Republican Gov. Tom Corbett, whom Wolf, a first-term Democrat, defeated last November.
Among Chester Upland's supporters at the hearing were school board members. One, William Riley, said the board agrees the formula for paying charters needs to be reduced. If it isn't, the district will never be able to balance its budget.
"This is about money. This is what it's all about," he said.