Allocation of School Funds Spurs Competing Demands : Education: L.A. will have to spend about the same on each student. But there is a tug of war over priorities.

As the Los Angeles Unified School District embarks on a new way of funding its 650 schools, it finds itself stumbling over the most basic of questions: How much does it cost to educate a child?

To find the answer, officials must first decide whether to spend more money on students at campuses with high overhead; whether high schools, with their costly labs and athletic programs, should command more money per child than elementary schools, and who should pay to bus students across town when their neighborhood campuses are full?

And, more immediately, who should get the bill for the expensive special services needed by disabled students? Should the cost be allowed to swamp a small neighborhood school or be shared by all campuses, even those without disabled students?

These issues are being raised by a court order that will soon require each Los Angeles school to spend about the same amount of money per student. That push toward equality comes as the public is clamoring to give schools more budget autonomy, leaving district officials struggling to produce a funding plan that reconciles those competing demands.

Whatever course the district charts will inevitably make some schools winners and others losers. The winners will have more money to reduce class size or add subjects such as music and art; the losers will be forced to economize by hiring less-experienced teachers or cutting programs.

“This budget thing is a lot more complicated than people think,” said John Perez, vice president of the teachers union, which is monitoring the funding deliberations. “It’s not just give every school the money that is generated by that school, because then who pays for the transportation system, who pays for the police, who pays for special ed?”

The state sends every school district a base amount of money for each student who attends; this year Los Angeles Unified received $3,200 per pupil. But only a tiny portion--primarily for classroom supplies and teachers aides--is controlled by the schools. The district uses the rest to pay for such campus necessities as teacher salaries, utility costs and maintenance services.

But three factors have converged to render that funding system obsolete. A 1992 settlement in the Rodriguez lawsuit, which accused the district of spending less on inner-city campuses than on suburban ones, requires that per-student spending be equalized by 1996. Reform is giving principals, teachers and parents more authority over their schools’ budgets. And the growing “charter” movement is allowing schools independence from the district’s cumbersome accounting rules.

The Los Angeles district uses so many accounts to keep track of its $3.9-billion budget that it cannot calculate actual per-student spending for every school. The best it can do is an average by type--$2,806 per student at elementary schools, $3,422 at middle schools, and $3,545 at high schools.

From each student’s share, about $400 is subtracted to help pay the district’s portion of expensive special education and integration services. And it is the bill for those programs--particularly special education--that poses the first challenge to educators trying to sort out new principles of school funding.

“It’s a philosophical kind of issue,” special education administrator Steven Mark said. “Some (school officials) think we should all pay a share, and others say they are not willing to pay for everybody, just their own kids.”

At stake is the $212 million the Los Angeles district must take from school funds each year for integration programs and services for disabled children--everything from specially equipped school buses to extra teachers and aides.

Until now, those costs have been spread equally among all the district’s schools, even though special education and integration programs are offered on only a fraction of the district’s campuses.

“The state does not provide us with enough money for those programs, so if we didn’t (make all schools) share the costs, you might free up money for some schools, but you would end up bankrupting other schools, such as those with a high concentration of special education students,” district budget chief Henry Jones said.

When Vaughn Learning Center in Pacoima became the first district school to take total control of its finances last year, school director Yvonne Chan demanded that it be exempted from contributing to the special education fund and, instead, pay only the actual costs of teaching disabled students at the school.

Chan also contended that as an independent charter school, Vaughn should get the full $3,186 per child that the district gets from the state--giving it $800 per student more than other elementary schools receive.

District officials initially insisted that Vaughn play by the same rules as regular schools and contribute its share of districtwide costs. But after months of haggling, the school board relented and agreed to withhold nothing for special education and other central services, and to give Vaughn an extra $149,000, which put its per-pupil funding close to the $3,186 Chan had sought.

In exchange, Chan agreed to pay for services for the 54 disabled students on campus. That made Vaughn the first Los Angeles school to be freed of its financial obligation to the district’s expensive special education program.

Some school board members say they were intimidated by San Fernando Valley politicians into giving Vaughn a bigger pot of money than other elementary schools, and they worry that their decision set the district on a course that cannot be sustained.

“I think we drifted into giving them special treatment because of political pressure,” said Jeff Horton, who voted for the arrangement. “We wanted them to succeed, but we may have set a precedent that will be harder to undo than we realize, and we can’t afford to extend it to everyone.”

Letting Vaughn opt out of the special education pool this year had little districtwide impact because there are more than 600 schools to absorb Vaughn’s portion. But if that policy were extended to other schools, the pot of special education funds could quickly be depleted.

Almost every school offers some services for students with mild disabilities, but special classes for severely disabled children are concentrated in only a handful of campuses throughout the district.

Because students are bused to those campuses from around the district, allowing each school to pay only its own way, as Vaughn does, “becomes an issue with great implications,” Mark said.

“It’s fine to say let each school pay for its own kids, but who are its own kids?” he said. “What about kids who are from that area but go to another school? Which school pays for them?”

The same question dogs the debate over how to distribute the district’s integration costs. More than 56,000 students are being bused this year to magnet and other integration programs. The state pays 80% of the bill, but the remaining $33 million is divided equally among all students.

If each school had to pay its own tab for busing, schools such as Taft High in Woodland Hills--where more than one-third of the 2,850 pupils are bused in--would take staggering hits on their budgets.

Board President Leticia Quezada said the school board is struggling to decide how to apportion the costs of educating its children--and to discern exactly how much it costs for each student.

“Philosophically, there are some responsibilities that the entire district has to respond to . . . and how we divide the cost is what we have to decide,” she said.

On May 16, the board took its first step toward a new budgeting system, approving a pilot plan to give schools in the district’s reform program the right to decide how to spend some of the money set aside for staffing their campuses and buying classroom equipment.

But the board deferred a decision on the question of funding special education programs, as well as other sticky issues, such as whether elementary and high schools should be funded at the same level and whether small schools should receive more than large schools.

Elementary school principals argue that their student spending should not suffer to subsidize high schools, which have more expensive programs but also have larger student enrollments to generate more revenue.

And small schools, which must spend a larger portion of their budget on fixed costs, are lobbying for extra funding to keep their classroom spending on a par with the larger, more economical campuses.

Some schools would fare well under a plan allowing them to pay only for the services needed by disabled children on their campuses. Vaughn saved $120,000 this year by not paying into the special education pool.

The school spent $180,000 to hire additional teachers, aides and a recreation director to work with disabled students. Had it paid its per-student assessment to the district, it would have cost Vaughn $300,000.

But by opting out of the district fund, Vaughn shifted more of the cost of special education onto other campuses. In effect, the decision burdened schools such as nearby Chandler Elementary in Van Nuys.

With three classrooms of children in wheelchairs and on respirators, Chandler would find its budget devastated by the kind of pay-your-own-way policy that produced a windfall at Vaughn.

But in the scramble for local control, each school is campaigning for the funding solution that best fits its needs, district officials say.

“Obviously, if I’m a school that has only two special ed kids, I only want to pay for those two. But a school down the street that has 100 special ed kids would not be able to pay for those in their budget,” Quezada said.

“At the local school level, everybody wants the kind of flexibility Vaughn has, as long as that doesn’t work against their interests. Then they start backing off.”

BACKGROUND

Two years ago the Los Angeles Unified School District agreed to settle a lawsuit filed by public interest lawyers on behalf of black and Latino parents. The suit contended that the district spends up to $400 less per child on schools that serve poor and minority children, primarily because suburban campuses attract more experienced, higher paid teachers. The settlement in Rodriguez et al. vs. LAUSD requires that spending be roughly equal by 1996.

* ACCELERATED SCHOOL: Grants aid new facility. B3