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Flint — A state board of education member and the superintendent of Flint schools are asking the state to investigate special education funding in Genesee County, alleging a formula there shortchanges Flint's special education students and has driven the district into a financial crisis.

The Genesee County Intermediate School District's funding formula has come under fire because it calculates and distributes special education funding for local districts based on all students in a district, both special education and non-special education.

The Genesee ISD formula especially hurts Flint Community Schools, superintendent Derrick Lopez says, because the district has a larger-than-average special education population — 26% — a number that's twice the statewide average of 13.2%. Flint's special education population also has grown every school year since the city's 2014 water crisis.

At the same time, the district has experienced a decline in its general education, or non-special education, population. It's decreased from 85% in the 2014-15 school year to 73% this year.

Under the Genesee Intermediate School District's formula, districts like Grand Blanc and Davison Community Schools, which have a smaller percentage of special education students than Flint but a larger general education enrollment, get more special education funding every year from the Genesee ISD than Flint.

According to data from the intermediate school district, in the 2017-18 school year, Grand Blanc schools received $474,634 in special education funds for 870 special education students, Davison schools received $334,212 for 573 special education students, while Flint schools received $294,066 for 902 special education students.

Lopez says he wants the Genesee ISD to change its formula by removing the number of non-special education students counted and include only special education students.

"We are trying to get the state to step in and change the way they allot per pupil allotment," Lopez said. "It costs double to educate special ed students. I have not seen this formula anywhere else in Michigan."

Each intermediate district in Michigan has its own unique policy for distributing special education funds. Some pay for only center programs. Others only pay local districts to provide services. Some count only special education students when distributing funds, while others count all students.

Lopez filed a formal objection last week over the county's special education formula with the Genesee ISD. He also has asked the Michigan Department of Education to review the funding formula for special education for Genesee County.

"We are unwavering in our commitment to providing an education designed to meet the many needs of our students by seeking to educate the whole child,” Lopez said.

“That especially includes our students with special needs."

Lopez said it's time for Michigan to re-examine special education because districts statewide are severely underfunded for the costs associated with educating children with special needs.

“The State of Michigan must re-examine special education funding not only for Flint Community Schools but for all children in the state ... the state should adopt a new formula for state aid that takes into consideration Michigan’s most vulnerable students,” Lopez said.  

Last week in her proposed K-12 budget, Gov. Gretchen Whitmer said she wants a $60 million increase — a 100% increase over last year's budget funding — in additional funding for special education services to help districts address the wide variety of needs for special education students.

Meanwhile, Flint Community Schools is projected to end the school year with a $12.7 million deficit, which will grow to $25.9 million by the 2026-27 school year, according to a deficit elimination plan filed with the Michigan Department of Treasury.

Part of the district's deficit stems from $3.6 million in special education costs not covered by the state, Lopez said. Every year, the district must dip into its general fund to cover between $3 million to $4 million in uncovered special education costs, Flint school officials said, driving up their deficit annually. Because special education services are required by law, each district must pay for them through general funds.

Pamela Pugh, vice president of the state board, says she also has concerns over funding for Flint schools and has asked the Michigan Department of Education to intervene to ensure the district gets more equitable funding.

"Special needs requires more. We have inequitable funding, and we already don’t supply enough for special needs children. They could close the financial gap," Pugh said of state Education Department. "Flint Community Schools is being harmed by this formula."

Lopez has shared special education funding formula concerns with the Michigan Department of Education, "which we take seriously, and have begun to explore," MDE spokesman Martin Ackley said.

In Genesee County, a special education millage generates about $24.8 million a year. Center programs are funded first and cover only one-third of the cost. The remaining funds — about $3.8 million — are dispersed to 36 local districts in the county to reimburse them for special education costs there.

Steve Tunnicliff, associate superintendent for communication and development at the Genesee ISD, said on Monday that all students are included in the funding formula to comply with federal laws that require districts to locate all children in need of special education services.

Counting general education students is also done to recognize that some students who receive special education services are not in special education settings all day, Tunnicliff said.

Genesee ISD officials said since 2001, Flint Community Schools has received the most in special education of any district — $16.22 million — while Grand Blanc schools is the next largest recipient with $9.47 million.

The formula used to pay local districts in the Genesee ISD was agreed upon by all districts, Tunnicliff said.

Flint schools are the first to file an objection to the formula, he said.

Tunnicliff said there are other issues at play involving special education funding across the state of Michigan. Education advocacy groups have been calling for increased funding for special education in Michigan based on weighted formulas.

"We are empathetic to the financial situation for (Flint), but we have also said we also have a much larger issue to address in the way schools are funded across the state," Tunnicliff said.

How the funding works

Funding for special education comes from countywide millages by intermediate school districts or countywide districts, which can vary depending on ZIP code. In Michigan, there are 56 ISDs, and each one has a different formula for funding special education. Some pay for center programs and some pay districts directly.

Money also comes from state revenue and from the federal government through Medicaid and special education grants from the U.S. Department of Education.

Michelle Saunders, executive director of financial services at Oakland Schools, said special education programs are operated by all local districts within the 28 district ISD. Of the $147 million generated in its county special education, Saunders said Oakland Schools sends $131.7 million directly to the districts that operate programs for all students in the county.

The Wayne Regional Educational Service Agency also  does not send separate funds to local districts, superintendent Randy Liepa said.

Some ISDs in Michigan, such as Kent, Saginaw, Macomb and Lapeer, do use K-12 total enrollment in their funding formulas.

Brian Marcel, an assistant superintendent at the Washtenaw ISD, said in his county, the special education millage pays for center programs, administrative costs and local district services.

Money sent to local districts is based only on the number of non-special education students there.

"Any student can get referred for an IEP (individualized education plan)," Marcel said. "Whether they have a disability or not, they can get referred for it and the staff have to take time to evaluate. Our feeling was using the K-12 count made a lot of sense there."

School finance expert David Arsen said ISDs in Michigan are given latitude to decide how to disperse county-generated special education funds.

"There is a fair amount of discretion left to ISDs in how to allocate. They only have to come up with a plan," Arsen said. "The state could have oversight over this. They could narrow acceptable practices. The state should monitor that the allocation of funds are done based on principles of equity."

Arsen, a professor of education policy and K-12 educational administration at Michigan State University, said another factor is counties like Genesee, which have low taxable values, cannot generate funds that richer counties can to help pay for special education services.

"The ISD are unequally situated to help out," Arsen said. "Genesee has a low tax base. It’s a relatively poor county and has big needs in Flint."

Rising special needs

Flint schools have suffered from declining enrollment and shrinking state aid for decades. In 1968, the district had 47,000 students. In 2019, enrollment was about 3,800 students.

The number of special education students in Flint schools has increased from 14.88% in the 2014-15 school year — as the lead-tainted water crisis began — to 20.3% in the 2018-19 school year when there were 862 special education students in the district.  Lopez has said the district's current special education population continue to grow during the school year, hovering around 26-27%.

According to Michigan health officials, children are at higher risk of harm from lead because their developing brains and nervous systems are more sensitive. Lead can cause health problems for children including learning problems, behavior problems including hyperactivity, a lower IQ, slowed growth and development and hearing and speech problems.

School officials decided to address their deficits by asking local taxpayers to approve a $30 million bond request this March. Lopez said the district decided to place the millage request on the ballot because its 4-mill sinking fund is expiring at the end of this year. The $30 million bond request, if approved, would not increase the current 4-mill rate paid by district taxpayers.

School officials came up with the idea of asking voters to divide the 4 mills between fiscal stability bonds and a sinking fund renewal. Flint voters will be asked to adopt a new millage of 2.82 mills for 25 years and reduce the sinking fund millage to 1.18 mills.

"This is the better option at no additional costs to taxpayers," Lopez said. "We just want to invest in Flint Community Schools going forward."

Flint resident Arthur Woodson said he supports the bond request because it will allow the district to invest in infrastructure.

Woodson also wants the Genesee ISD to change its formula to allow Flint schools to have a larger share of special education funds.

"They are using a formula that was good back in the day when Flint had 30,000 kids. It didn’t change with the depopulation of Flint and the Water Crisis," Woodson said. "There is still a serious health crisis going on here."

Flint parent Ebony Cargile says she plans to vote no on the bond request after growing frustration with the school district led her to remove her son, who qualifies for special education services.

Cargile says the decision to pull her son from Flint Community Schools came in October after the district moved his special education teacher to another school and did not replace her.

The district then moved her son from his full-time general education setting — where he received special education services — into a full-time special education classroom that Cargile believes violated his right to a free and appropriate education.

She filed a complaint against the district with the state and enrolled her son into an online charter school at home where she says he is thriving. The state education department later determined a violation occurred when the district moved her son based on information outside his individualized education plan. Another part of her complaint is pending.

"I would vote no because I don’t think it's fair they get to get the money and get to misuse it or blow it," Cargile said. "This is all happening at the same time when children in special ed aren't getting the services they need, including my son."

'Frustrated'

As the district seeks changes to special education funding at the county level, it continues to defend itself in a civil lawsuit filed in 2016 by Flint parents for its alleged failure to comply with special education laws.

The federal case, which is expected to go to trial this summer, could also impact how special education is funded in Flint and Genesee County.

In the lawsuit in U.S. District Court, attorneys from the ACLU Fund of Michigan, the Education Law Center and White & Case law firm allege the state education department, the Genesee Intermediate School District and Flint schools failed to provide adequate financial and staffing resources and support to help Flint schoolchildren meet the challenges they were facing in getting special education services.

Kelly Rossman-McKinney, a spokeswoman for the Attorney General's Office, said discussions are ongoing about a possible resolution, but she could not comment on the case.

Greg Little, chief trial counsel for the Education Law Center, said the case has been on hold for a year while attorneys attempted to settle with the state, intermediate school district and Flint schools.

"We were optimistic with a new administration coming into power that campaigned on doing the right thing for the children of Flint that we would see the state doing the right thing for these kids," Little said.

"Instead, we continue to be frustrated. ... The state has poisoned them, the state has abandoned them and now they are not giving them the resources they are entitled to in schools."

jchambers@detroitnews.com 

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