1. SPECIAL EDUCATION FINANCE POLICY
Sheldon Berman
Massachusetts Association of School Superintendents

2. THE DILEMMA
The foundation formula was built on the assumption that school districts were not effectively containing costs and were inappropriately identifying children as having special needs.
In contrast, MASS found that for most of the 1990s school districts reduced the percent of students in special education programs.
However, districts were still experiencing cost increases that seriously compromised their regular education program and the goals of education reform.

3. SPED ENROLLMENT prototype data fy85-06 CHART.xls
The decline in enrollment in FY02 was due to the Department of Education changing the reporting date for special education from December 1 to October 1. This caused a reduction in the special education enrollment because it did not include those students who would have previously been identified in the months of October and November.

4. COST TRENDS REG-SPED STATE wo VOC 90-05 chart2.xls
The total school district expenditures do not include vocational and agricultural schools due to the fact that most special education costs are covered within the vocational program and are not differentiated. This is true for the analyses throughout the PowerPoint with the exception of the analysis of the adequacy of the state foundation budget.

5. HEALTH COSTS
Health costs fy90fy05.xls

6. COST INCREASES
REG-SPED STATE wo VOC xls (Contains complete expenditure data)

7. CONTINUED COST INCREASES
PER PUPIL COSTS xls
In FY05, the Department of Education eliminated documentation of costs for ELL students in the end-of-the-year financial report completed by districts. Costs that had been in that category were rolled into the calculation of per pupil regular education costs thereby significantly increasing the regular education per pupil rate. Therefore, the last viable comparison of per pupil costs available is for FY04.

8. COST TRENDS REG-SPED STATE wo VOC 90-05 chart2.xls
The regular education calculation estimates the continuing cost to provide ELL programs in FY05 and deducts that from the total expenditures on regular education.

9. TRANSPORTATION COSTS ESCALATING
MA sped trans costs95-05.xls

10. TRANSPORTATION COSTS 95-05
MA sped trans costs95-05.xls

11. SPECIAL ED AND ED REFORM
The cost increases were equivalent to a large share of new ed reform aid from FY93 to FY99.
For 56% of districts SPED increases exceeded 50% of new state aid.
For 29% districts SPED increases exceeded 100% of new state aid.

12. OMINOUS PRESCHOOL TRENDS
FY85-FY01: 199% increase in special needs preschool enrollments in contrast to a 20.4% increase for all other sped prototypes
In FY02, the DOE reporting date was moved back from Dec. to Oct., thereby reducing the number of preschool enrollments
FY02-FY06: 15% increase in special needs preschool enrollments in contrast to a 7% increase for all other sped prototypes

13. OMINOUS PRESCHOOL TRENDS

14. OTHER OMINOUS TRENDS
FY92-FY06: 197% increase in 0-3 year olds with significant disabilities served by Early Intervention
CY83-CY05: 181% increase in confirmed child maltreatment cases
FY90-05: 213% Increase in nursing and health related care costs

15. OTHER OMINOUS TRENDS
In FY05 and again in FY06, Early Intervention tightened the eligibility criteria and discontinued their categorization of students into mild, moderate and severe delay designations. In FY05, A child was eligible if the developmental age was more than 25% below the mean score for children of the same age on any domain of functioning. In fiscal year 2006 EI allowed the use of another assessment tool for the determination of eligibility based on developmental delay. Therefore the reduction in the percentage of students who are more seriously involved in 05 and 06 is due to this change in eligibility. However, these more seriously involved students represent approximately 87% of all children served by Early Intervention.

16. OTHER OMINOUS TRENDS

17. OTHER OMINOUS TRENDS
OSD approved salary relief for private sped schools
$2.5 million increase for FY07 for tuition to 18 schools
$??? Million increase for FY08 for tuition to potentially 180 schools
Notification deadline for FY08 will be Dec. 15
OSD is the Operational Services Division. OSD is the rate setting board for private special education schools.

18. THE REALITY
A significant factor in the increase in costs has been the rapid rise of children with moderate and serious disabilities in early intervention and preschool programs.

19. FINDINGS
The cost of special education increased at a significantly greater rate than that of regular education from FY90 to FY05.
Special education consumes a significantly higher percentage of most school districts’ budgets and a disproportionate share of new funds allocated to education.
Increases in the number of children and severity of disability of children served by Early Intervention and special needs preschool programs indicate that these trends will continue.

20. MAJOR CAUSES OF INCREASED COSTS
Advances in medical technology
Deinstitutionalization of special needs children and privatization of services
Consequences of a higher percentage of children living in poverty
Increase in families experiencing social and economic stress.

21. THE PROBLEM
Is not caused by district policy and practice but rather medical, economic, and social factors.
Is exacerbated by the lack of adequate funding at a state and federal level for special education and early childhood programs.

22. THE DILEMMA
Children are entering our programs with significantly greater special needs and these needs are often identified at a very early age.
We need a solution that addresses the financial crisis emerging in many districts while at the same time meeting the real and substantial needs of these children.
We need a solution that does not blame the children or those working with these children and does not place the primary burden on local communities, but addresses the real causes of the problem.

23. THE LONG TERM SOLUTION
Provide financial relief to school districts and communities for the rising special education costs through increased aid
Address the medical, social, and economic issues that cause children to require special education.

24. THE CIRCUIT BREAKER
Provided significant state relief for children requiring high cost special education services
For the first time, provided aid for in-district students and private day placements
Significantly increased state funding for special education
Proposed: 90% above 3x foundation ($23,712)
Passed: 75% above 4x foundation ($31,616)
In FY05, it was 11.5%of total special education spending
In FY06, it is likely to be 10%.

25. INCREASED STATE AID FY05 data & CB chart.xls
FY04 10,675 students were covered by the circuit breaker
FY05 12,034 students were covered by the circuit breaker
FY06 11,874 students were covered by the circuit breaker
FY07 appropriation 207.7M

26. CIRCUIT BREAKER AND SPED EXPENDITURES
FY05 data & CB chart.xls
11.5% of sped spending

27. CIRCUIT BREAKER AND SPED WITH SPED TRANSPORTATION EXPENDITURES
FY05 data & CB chart.xls
10.4% of sped spending

28. INCLUDING SPED TRANSPORTATION IN THE CIRCUIT BREAKER
Foundation budget for special education covered only 48.8% of sped expenditures including sped transportation in FY05.
There is no state support for sped transportation in spite of the regional nature of transportation for out-of-district special education students.
Special education transportation costs have been growing at almost 2x the rate of regular education transportation and doubled between FY95 and FY05, creating serious hardships for districts.
Special education transportation is a basic component of serving high cost special education children and, therefore, should be part of the Circuit Breaker formula.

29. SPED FOUNDATION BUDGET ISSUES
Locks in the percent of students in special education in-district (3.75%) and out-of-district (1%)
Seriously underestimates special education services and tuitions
Expenditure on services is 284% of foundation in FY04
Expenditure of sped tuitions is 319% of foundation in FY04

30. FOUNDATION BUDGET ISSUES
Pupil services covers more than just special education services.

31. FOUNDATION BUDGET INADEQUACY
foundation and sped FY05.xls
54% of actual spending
54% of actual spending

32. FOUNDATION BUDGET INADEQUACY
foundation and sped FY05.xls
48.8% of actual spending

33. POLICY RECOMMENDATIONS
Increase the circuit breaker for FY08 to address OSD approved salary upgrades for private 766 schools
Adjust the foundation budget to accurately account for special education costs
Lower the circuit breaker threshold to 3x or 3.5x foundation or increase the reimbursement to 80%
Include special education transportation in the circuit breaker
Restructure out-of-district special education transportation with the hub being the private school

34. RESTRUCTURING SPED TRANSPORTATION
Currently, districts rely on themselves or on education collaboratives for out-of-district sped transportation
Collaboratives transport or contract for transportation services for all students within the collaborative region to all private sped schools attended by these students.
Therefore, there are overlapping routes going to the same private school

35. PROBLEMS WITH THE CURRENT SYSTEM
Overlapping routes and inefficiencies
Diverse vehicles from taxis to handicapped accessible mini-buses
Planning is complex: multiple students to multiple schools
Traffic congestions and delays at the private schools
Lack of training for drivers and transportation monitors

36. CORE CONCEPTS OF A RESTRUCTURED APPROACH
Each private school serves as the hub for planning services for all students at the school
Each collaborative would provide or bid transportation for the private schools in its region for all students at the school
The collaborative becomes the central point of contact and organization

37. CASE STUDY

38. BENEFITS Fewer routes and more efficient routing that saves costs
With routing based in one school, larger groups of children can be transported together, reducing the number of vehicles
Eases congestion at the school
Easier to provide higher quality drivers and monitors
One stop complaint management for parents and school
Potential for multiple uses for busses such a field trips
Improves quality of students’ education experience

39. PILOT PROGRAM 3 Collaboratives 3 year transition to new structure
Assabet Valley Collaborative
ACCEPT Collaborative
Lower Pioneer Valley Collaborative
3 year transition to new structure
Includes evaluation to determine cost effectiveness
Requires $300,000 each year

40. This PowerPoint is available at the MASS website.