An email from the Orleans Parish school district early Tuesday morning has charter leaders trying to figure out how they’ll deal with an unexpected shortfall in funding.
The problem? The city has more students, including more who need special education, than it did last year. But it’s unclear why school leaders just learned this week how it will affect the bottom line.
“We were just kind of mystified that the first we were hearing about this was mid-April, when budgets are obviously set and you’re a month away from the end of the school year,” said Bob Keogh of 4th Sector Solutions. The company handles finances for several charter schools, including ENCORE Academy.
The 511-student elementary school stands to be $95,000 short of its budgeted revenue. Keogh said the school will dip into its reserves.
Midyear adjustments are not uncommon, said Caroline Roemer Shirley, the head of the Louisiana Association of Public Charter Schools. “I think some of this could have been better communicated to schools,” she said.
Dominique Ellis, a spokeswoman for the Orleans Parish School Board, declined to answer questions about why schools will get less than they expected and when they learned about it.
“The OPSB administration is working very closely with the state and schools to make sure that everyone has the information they need to revise their budgets for the 2018-2019 school year,” she wrote in an email. “As we move towards unification of the district, the OPSB is committed to making sure this process goes as smoothly as possible for schools.”
Funding designed for a system of charters
Education is funded differently in Orleans Parish than other parts of Louisiana.
The state gives per-pupil funding to the parish school board based on Oct. 1 enrollment. That makes up about a third of the per-pupil education funding for New Orleans schools. The rest comes from local property taxes.
That money is distributed to schools every month based on a formula that provides more for students with certain characteristics: special education, gifted, English-language learner and over-age.
This year, there was a slight increase, about 1 percent, in the number of students in Orleans Parish.
More students need special-education services and don’t speak English as their first language. The percentage of students who need special-education services went up about 7 percent.
So even though schools get more money for students who need special-education services, those with a larger share of those students were hit harder.
Encore also saw an increase in special-education students, Keogh said.
Increase in the number of students in New Orleans
Increase in students who need special-ed services
Eric Seling, chief operating officer for the Orleans Parish school district, explained what happened in the email to school leaders. “As you are aware, the local amount of money available is split by the number of students and thus, as the student count increases, the local amount available on a per pupil basis decreases,” he wrote.
Jay Altman, the CEO of FirstLine Schools, said his five-school charter group is about $630,000 short of its budgeted revenue — about $210 per student. The large adjustment this late in the year will pretty much wipe out the network’s contingency fund, he said.
“We do work in a field where the mission exceeds the resources already,” he said. “So this adds to the strain for sure.”
The shortfall doesn’t appear to be due to a big shift in the state’s share of per-pupil funding, although it did drop about 1 percent this year. Schools typically base their budgets on the prior year’s per-pupil allotment or the state’s projected allotment.
Other factors may have played into this year’s shortfall.
Last year, schools shared about $3 million in one-time funding, which may have blunted the effect of any miscalculation.
Keogh said another issue — though not as significant — stems from the school district’s revision of its funding formula in 2016. That change gave more money for special-ed students and less for gifted students.
Lusher Charter School and Lake Forest Elementary Charter School complained because it would decrease their funding.
The district promised to make sure each school’s per-pupil funding didn’t drop more than 2 percent from what it got in 2014-15. To do that, the district gives those schools a portion of the per-pupil funding allocated to other students in the city.
“The hold-harmless clause obviously brought us down a little bit,” Keogh said.
But Altman said the bigger problem is that state funding hasn’t increased.
“We live in a state where we’ve done some pretty ambitious reforms,” Altman said. “And they all end up, long-term, being in jeopardy if we don’t adequately fund public education.”
*Correction: This story originally quoted a spokeswoman for the state Department of Education, who blamed the shortfall on schools overestimating enrollments. That comment was included in the story due to a misunderstanding between the reporter and the spokeswoman, so it has been removed from the story. (May 4, 2018)