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MICHIGAN SCHOOL CHOICE LEAVES SPECIAL ED. KIDS BEHIND

October 29, 1999

In Michigan's "school choice" program, charter schools appear to be doing as much "choosing" as the parents are, a new study says. The state gives students who want to change schools up to $6,000 per year to attend a charter school or a public school in a different school district, but to keep their costs from rising above that figure, the charter schools are recruiting students who cost the least to educate. In that equation, students with special needs are getting left behind for public schools to educate, driving up the public schools' average cost per student.

The report, "School Choice Policies in Michigan: The Rules Matter," was written by Michigan State University Associate Professor David Arsen and Professors of Educational Administration David Plank and Gary Sykes. They conducted the study in 1998 with a grant from the Michigan Applied Public Policy Research program.

This year, about 49,000 students, or 3 percent of the state's total enrollment, have taken advantage of either the charter schools or inter-district enrollment programs, the study says. Charter schools have gradually popped up across the state since they were first permitted in the 1993-94 school year. This year, the state counts 137 charter schools among its total of 749 public schools, according to the Michigan Department of Education.

Charter schools, independently run public institutions that are funded by the government, have maintained a keen focus on their bottom lines, the researchers say. Because the schools must show fiscal responsibility, as well as academic progress, to keep running from year to year, many avoid offering special education programs and services. For many of these schools, the researchers note, "it would be prohibitively expensive to offer a full special education program." The study even quotes one unnamed founder of a small charter school saying, "If a severely handicapped student enrolls in our school, we'll have to close."

Therefore, according to the study, Michigan charter schools have deliberately avoided recruiting special education students. State rules require that charter schools enroll every student who applies or, if they lack the capacity to do so, enroll students based on a lottery system. However, the state does not police charter schools' marketing and recruiting activities.

In the 1997-98 school year, charter schools across the state had lower average special education enrollments than their neighboring public schools, the report says. Approximately 75 percent of all charter schools offered no special education services at all.

Based on the financial data all schools submit to the Michigan Department of Education, the researchers noted the few charter schools that do enroll special education students appear to provide fewer and less costly services to these students than nearby public schools do. On average, charter schools spent about 1 percent of their current operating budgets on special education services, "far less than traditional public schools," the study says.

Special ed. programs and services for high school students are hardest to find at charter schools, primarily because most charter schools teach the elementary grades. Elementary students do not require specialized teachers, costly lab equipment and other items that drive a secondary school's overall operating cost up.

Because of the cost discrepancies between elementary and secondary education, and general and special ed. programs, both charter schools and public schools that accept students from outside their districts have no incentive to serve students with special needs. Public school districts participating in inter-district choice may be thinking twice about opening their doors to non-district students, thus undermining the purpose of the state's inter-district enrollment policy.

In charter schools operating only at the elementary level, the actual cost of providing education is significantly less than the per pupil grant provided by the state. Some of that extra revenue may turn into profit for the charter schools, or it may be used for other purposes. As this happens, public school districts that maintain secondary schools and special education programs see their actual cost of providing education increase.

"As these schools continue to lose low-cost students to charter schools and other competitors, they are truly required to do more with less," the researchers say.

Despite the study's findings, the researchers say they are not arguing against school choice. "We see no justification for depriving households of the opportunity to choose better schools for their children on behalf of those who fail to make good choices themselves," they say in the study. Instead, the state needs to develop a more specific set of rules for charter schools and public schools accepting non-district students to keep this revenue imbalance in check. "The rules matter decisively in the emerging market for schooling," they say.

For example, charter schools need more government money to build or purchase facilities and educational technology that will help deliver quality education. The up-side for the state is this increased public support "would necessarily imply additional public accountability," the researchers say. In addition, Michigan should establish a uniform process for enrollment at all charter schools, they say, to limit opportunities for schools to discriminate on the basis of cost or other student attributes.8