Duluth Edison Charter Schools on Monday said it isn't responsible for the Duluth school district's financial crisis.
The district has pinned a big piece of a $2 million mid-year deficit - calling it unexpected - on the special education spending of Edison, coupled with a state funding formula increase. State law dictates that the Duluth school district must pay 90 percent of the unreimbursed special education expenses for its students who attend Edison.
Edison head of school Bonnie Jorgenson said the $1.2 million increase that's been characterized as unexpected by Duluth school district Superintendent Bill Gronseth is mainly a result of a funding formula change, and not increased spending. She also said that the formula increase in effect for 2016 was announced by the state education department in 2014.
Edison, she wrote in a statement, "should not be made the scapegoat for a complexity of issues and needs in ISD 709's budget that resulted in the deficit the local school district is now facing."
The deficit also stems from planned curriculum spending and a loss of funds related to declining enrollment. To fix its shortfall, the Duluth school district is asking its employees to accept two days of leave without pay. If everyone participates, the move would save about $645,000. Another $1.3 million in savings would be found through deferred projects and purchasing.
Who would agree to a furlough - and exactly how much money would be saved - is being determined this week, and a plan to fix the deficit will be voted on by the School Board on Thursday.
Jorgenson defended Edison's spending, citing an increase in students who receive special education services at the school. At the start of the 2014-15 school year, that number was 203 students. The start of last school year showed 250 receiving services, with many students coming to the school already with an individualized education plan directing a need for special education.
The district's portion of Edison's special education costs was $1.4 million for the 2013-14 school year. The next year those costs were $1.6 million, and in 2015-16, the number was about $2.5 million.
Jorgenson said that Edison alerts Duluth within 60 days of enrollment when it takes new students from the district with special education needs, and also provides it with individualized education plans of students who come from the district. That is something Duluth has requested, but Edison isn't required to do.
Gronseth said that information doesn't indicate expenses, and noted that while administration knew about the formula change, staff didn't know how that would translate for the district until this fall. Special education funding runs two years behind, and the district learned of Edison's 2015-16 expenses only recently, Gronseth said.
Financial data show that Edison, in recent years, has spent significantly more per special education student than the Duluth school district. For example, in 2014-15 - the most recent year data is available from which the two can be fully compared - Edison spent about $4.7 million educating 219 special education students, or $21,461 per kid. The Duluth district in 2014-15 spent $18.7 million educating 1,483 special education students, or about $12,600 per kid.
Those overall numbers do not show the wide range of services both school systems provide to students, some who need services that are more expensive than others.
Edison is not required to report any of its expenses to Duluth ahead of time, and Jorgenson said no one inquired.
Gronseth has indicated there is an effort afoot by Duluth and other districts to attempt to change legislation around special education funding.
The larger issue of the cross subsidy - what districts pay from their general funds toward special education expenses that aren't met by federal and state sources - is something some districts want to change. The Association of Metropolitan School Districts - which includes Anoka-Hennepin, St. Paul and Minneapolis - approved a position this month saying the state should reimburse school districts for such unreimbursed special education expenses incurred by charter schools.
Duluth's cross subsidy - for all of its special education expenses, in its own schools and not - was $9 million last year, according to a state education department report. The slightly larger St. Cloud district had an $11.6 million cross subsidy.
An argument often made by charter school supporters surrounding this issue, however, is that charter schools don't have the option of seeking taxpayer money through referendums as traditional public schools can.