After months of hearings over the escalating fees that the Chester Upland School District pays to its three main charter schools, a judge Friday agreed the payments should be cut by $20 million, or nearly a third.
But to cover the cuts, he also ordered the state to kick in an extra $20 million in subsidies to the bankrupt district.
Delaware County Court President Judge Chad F. Kenney approved a recently negotiated deal that would slash the amount the district compensates charters for special education students, and wipe out debt owed to the schools. But he said that wasn't enough to eliminate the district's ongoing structural deficit.
Kenney called on the state to match the $20 million that the district would save by increasing its subsidy once the long-delayed state budget is enacted.
"The commonwealth needs to find a proper level of state funding to educate children from poor families in a poor district that cannot fund its own children with local property taxes," Kenney wrote.
It was unclear what authority the judge has to order the state to increase funding.
"His authority is to either approve or disapprove" the plan submitted by the state-appointed receiver but he is not authorized to create his own plan, said Michael Churchill, an attorney with the Public Interest Law Center.
Kenney said he based his findings partly on the fact that Chester Upland lost $25.6 million after Gov. Tom Corbett eliminated reimbursements for charter schools in 2011. While the Wolf administration has proposed restoring some of that amount, Chester Upland would still be $19.2 million in the hole.
"The question then becomes ... where do you make up the $19.2 million," Kenney wrote.
The district's plan to save money on charters, which has the backing of Gov. Wolf and the eventual consent of the charter schools, reduces tuition from $40,000 to $27,028 per special-education student.
The district spends $64 million to educate nearly 4,000 charter-school students.
Kenney blamed the government for underfunding the district and for turning "the charters into culprits." He rejected a previous plan that cut charter spending even more.
Mark Nicastre, a spokesman for Wolf, said state officials "are pleased that the court has ordered a significant reduction in the special education charter rate."
Chester Upland receiver Francis V. Barnes said in a statement that the order "will benefit all of the children of the school district, including those in the district's charter schools."
But it may create "legal issues," he added without elaborating.
Donna Cooper, executive director of Public Citizens for Children and Youth, said the settlement showed that the actual cost to educate special education students is lower than what the state mandates charters be paid.
"Why else would they accept that?" she said of the cut rate. "They're not in the business of losing money. It's in line with their costs. ... We've been overpaying all these years."