The Differentiated Funding Formula – Where are we?

On Tuesday night, by a vote of 7-0, the Orleans Parish School Board (OPSB) directed their superintendent to allocate MFP money to schools as required by law. The impact will be to enact a new differentiated funding formula for OPSB charter schools, a formula that will also be used by the RSD for its New Orleans charters.

In response, Lusher and Lake Forest Elementary are now suing OPSB in federal court arguing that if OPSB funds them using this formula, the board will be violating their operating agreements and their rights under federal contract law.

How did we get here?

Last year, the Louisiana Legislature passed Act 467, which requires a single, differentiated funding formula for all OPSB and RSD charters.

The essence of Act 467:

Part 1 – Act 467 requires that RSD and OPSB charters be funded using a differentiated formula.

“The total amount of minimum foundation program formula funds allocated to charter schools that are located within the district shall be allocated using a district-level computation based on student characteristics or needs as determined by the state board.”

Part 2 – The Louisiana Department of Education (LDOE) will help bring together district stakeholders to develop the district level allocation.

“The state Department of Education shall facilitate a collaborative process that includes representatives from the Recovery School District, the Louisiana Association of Public Charter Schools, any affected local school board and any organization representing its authorized charter schools, and advocates for students with disabilities in the development of the district-level allocation policy that shall take effect on July 1, 2016.”

Part 3 – Implementing the allocation: Most accounts in the media suggest that Supt. Henderson Lewis, Jr.was left holding the bag, after first BESE and then OPSB refused to approve a new formula.

Educate Now! has a different take.

BESE and OPSB did what they needed to do to comply with state law.

Educate Now!’s reasoning:
  • Every year, a statewide Minimum Foundation funding formula developed by BESE (the MFP) is used to establish the pot of money each school district is to receive to provide a “minimum foundation” education to its students.
  • Act 467 requires the district (OPSB) to allocate the MFP funds it receives to the OPSB and RSD charter schools located in the district based on student characteristics or needs as determined by the state board.
  • On March 3rd, BESE approved the “student characteristics and needs.” Educate Now! has been asked why BESE did not approve the formula. BESE is constitutionally prohibited from interfering in the business affairs of a district. OPSB is responsible for its own budget.
  • On March 15th, OPSB took action by directing its superintendent to distribute its MFP funds as required by law, which in this case means according to the collaborative process facilitated by LDOE (the Act 467 Committee).

The Lawsuit

Educate Now! cannot opine on federal contract law, but there are some important facts that could diminish Lusher and Lake Forest’s argument.
  • Charter schools are a creation of, and subject to, the state charter law. The Legislature has the right to tell school districts how to fund their charter schools, and has done so for many years. Act 467 changed the section of the charter law that dictates to districts how to fund their charter schools.
  • Another section of the charter law deals with future amendments and changes to the law. It expressly states:

“All charter schools shall be governed by the law in effect on August 15, 2003. Thereafter, if the provisions of this Chapter are amended, all charter schools shall comply with the law as amended within ninety days of its effective date.”

  • Additionally, Lusher and Lake Forest’s operating agreements acknowledge that they “shall comply with all federal and state laws and regulations that are applicable to charter schools, unless the Charter School shall have received a waiver from such laws and regulations.
  • So, the law requires that charter schools located in Orleans Parish (types 1, 3, 4, 5 and 3B) be funded per Act 467, and Lusher and Lake Forest’s operating agreements say they have to comply with all state laws unless they get a waiver, which they don’t have.

Educate Now! reasons that: the charter law was in effect before the contracts for Lusher and Lake Forest were executed; both the law and the contracts state that the charter schools must adhere to law, even if it is amended; and, the law now requires charters in Orleans parish to be funded using a “district-level computation based on student characteristics or needs.”

Educate Now! expects the opponents’ attorneys will be relentless in their quest to find a way to void this action, and the legal arguments will be complicated. It will now be up to the courts to decide.

As for public opinion …

Leaders representing 90% of the city’s public schools are pushing for adoption of the formula approved by the Act 467 Committee. In addition, leaders from the African-American community wrote an open letter to OPSB in support of the formula; students from Lusher and Clark urged OPSB to approve the formula; Barbara MacPhee, veteran principal and current charter board member, said the formula corrects a “seriously flawed” system; and Benjamin Marcovitz, CEO of Collegiate Academies, wrote of his own experiences as a father of a special needs child and his schools’ commitment to serving students with physical and intellectual disabilities.