NJ Coalition for Special Education Funding Reform

On March 19, and again on March 21, the Coalition provided testimony before the legislature on Governor Christie’s proposed budget as it relates to special education.

While much attention has been paid to the proposed increased to special education - the proposal calls for raising the per-pupil aid for special education students from $11,900 to roughly $15,000, and to increasing the percentage of students who generate this aid by one tenth of one percent - the fact remains that special education is NOT DEDICATED.

This means that cuts to general education - and there are many - will be offset by special education increases. According to published reports, more than 90% of local school districts will have less state aid under this budget than they did five years ago - only five will see more state aid under this budget than they did in 2007.

While the Coalition welcomes the increased funding, it does not address the structural problems in the state’s special education funding system. Click here to read our 2012-budget-testimony_njcsefr1

The Coalition offered testimony before the Senate Education Committee in opposition to a bill, S-610, that requires the executive county superintendent to designate a county education services agency to assist local school districts in sharing services.

On the face of it, the bill would save money and coordinate a wide range of shared services - from accounting services to evaluation services, to special education placements. But a more critical review of the bill reveals many, many problems, including the potential for higher costs to taxpayers, duplication of services, the potential for violation of IDEA, and multiple conflicts of interest.

The Coalition was not alone in opposing the measure. Other groups including NJEA, ASAH, New Jersey Child Care Association, New Jersey Speech Hearing Language Association, SPAN and Autism NJ also opposed the bill. Click here to read the Coalition’s comments on the bill.

The New Jersey Coalition for Special Education Funding Reform has written to the U.S. Department of Education, urging that they rescind an “informal guidance letter” that would allow local school districts to reduce the amount of funding they commit to special education - a violation of The Individuals with Disabilities Education Act’s, (IDEA) Maintenance of Effort (MOE) provisions. Click here to read our letter.

IDEA ensures that local spending on special education is not routinely raised and lowered at the discretion of a local school district. The law allows a reduction in only TWO instances: when a senior, highly paid special educator retires and is replaced by a qualified but younger, lower salaried teacher; or there is an increase in federal funding to the school district. Only when a school district can show that reduced local funding is attributable to either of these two situations can the district’s MOE level be lowered. The district’s required level of spending then remains at that reduced level until the district increases its special education expenditures.

The informal guidance letter from OSEP, issued last June, allows a local school district (LEA) that reduces local funding for other reasons (not the two conditions authorized by IDEA), to continue spending at a “new” reduced level in future years. Click here to read OSEP’s letter.

According to IDEA Money Watch, “OSEP’s interpretation undermines current law and creates a disincentive for local school districts to comply with the MOE requirements of IDEA, places a significant burden on the SEA which has ultimate responsibility for providing FAPE to all eligible children in need of special education and seriously jeopardizes the right to special education programming and related services to the nation’s 5.9 million students with disabilities.”

OSEP’s letter creates a loophole, allowing districts to reduce local spending for special education, and conflicts with the legislative history of the MOE provision, which makes numerous references to State Educational Agencies and LEAs upholding their financial obligation to educate students with disabilities.

Because the policy shift places added burden on the State Department of Education, the Coalition’s letter was copied to Governor Chris Christie, New Jersey Education Commissioner Chris Cerf, Senators Robert Menendez and Frank Lautenberg, and all members of the New Jersey Congressional delegation.

The New Jersey Department of Education (NJDOE) has released the findings of an independent research firm calling for a sweeping overhaul of the way in which the state distributes aid to local districts to help them cover the costs of special education.

Augenblick, Palaic & Associates, a Denver-based, private consulting firm, was contracted by the Department last fall to analyze New Jersey’s census-based special education funding formula. The report, An Analysis of New Jersey’s Census-Based Special Education Funding System, and its findings strongly support the position of the Coalition for Special Education Funding Reform.

Data “Incomplete and Unreliable”

The report chides NJDOE for its failure to collect and use meaningful data to drive decision-making, and identifies major inconsistencies in the ways in which local districts collect data as it relates to costs. For example, in reporting ‘per pupil expenditure data’ for students with multiple disabilities, local districts report an average excess cost of roughly $28,000, but the specific cost per pupil ranges from $51 for one particular student, to $409,000 for another student. The variance, according to the report, is due to gross differences from district to district in the ways in which certain expenses are allocated across budget lines. Since 1996, the Coalition has urged better and more consistent cost data be used to make decisions.

More Quality Data Needed
The report calls for changes. First and foremost, NJDOE must begin to collect and use data ” in a manner that allows for analysis of both where students are being served, and the costs of serving different types of students. In addition, the report calls on NJDOE to undertake an analysis of special education enrollment patterns and costs associated with services across district sizes and types.

Reforms
Based on existing data, the researchers conclude that New Jersey should do two things:
1) Return to a system that funds special education based on actual enrollment, not a statewide census. This was also recommended by the non-partisan Office of Legislative Services (OLS) last spring.
2) Return to a system that differentiate funding for higher cost students before the threshold for “extraordinary costs’ kicks in.

These are consistent with the position of the Coalition.

New Jersey Governor Chris Christie’s Education Commissioner, Chris Cerf has convened a team of nearly a dozen academic experts to to look at the the way in which the state funds education under the School Funding Reform Act (SFRA). The task: help the Department come up with changes. While not specifically mentioned, the issue of funding for special education is likely to be discussed. The group is tasked with conducting an extensive review of the ‘flaws’ of SFRA, and may propose changes either to the formula itself and/or to state rules and regulations.

Cerf said he would like to see more money steered toward specific programs and reforms. He indicated that the group will propose something “unique and distinct”, and that budget simulations will be used to test out different ideas.

To read Jon Mooney’s coverage of the announcement, click here

The U.S. Department of Education has written a letter to Governors across the country, including New Jersey Governor Chris Christie, to let them know that they have federal funds that must be obligated before the end of September.

According to IDEA Money Watch, a project of The Advocacy Institute, only 4 states have obligated all of their IDEA Part B ARRA (American Recovery and Reinvestment Act) funds. New Jersey’s balance is $67M.

The American Recovery and Reinvestment Act (P.L. 111-5) provided $787 billion in federal spending focused on addressing the nation’s economic difficulties. Of that amount, $115 billion was designated for education related purposes.

While almost half ($53.6 billion) of the education funds in the Recovery Act were allotted to a fund called the State Fiscal Stabilization Fund (SFSF), several education programs also receive significant funding, including $12.2 billion for the Individuals with Disabilities Education Act (IDEA).

Many districts have explored ‘outsourcing’ as a way to cut costs. Most services that get contracted out for hire in an effort to save money do not directly affect children - things such as janitorial services and building maintenance, purchasing, administrative support, and food services.

Recently, however, districts have begun to outsource direct services - including paraprofessional support for students with disabilities - with mixed results.

In at least one New Jersey school, the community is concerned about what happened to a 5-year old.

While it may be smart to hire experts to help guild and run specialized programs, outsourcing special education services to low wage contractors in an effort to save money can cut into program quality, reduce accountability and hurt children.

The State’s non-partisan Office of Legislative Services has issued a report calling changes in the New Jersey’s special education funding system.

When the School Funding Reform Act (SFRA) was enacted, it dramatically changed the way in which state special education aid gets distributed to local districts. The old formula provided aid based on the number of children identified in each district, and the intensity of the services needed by each child. The new formula provides state aid based on a statewide average rate of classification, and a statewide average excess cost. It does not consider the number of children with disabilities in a particular district or the nature of their disability. As a result of this change, some districts received a windfall in special education aid, while others took dramatic cuts.

OLS recommends that the actual classification rate in a local district, not the statewide census average, be used for state aid purposes. They write, “Actual funding needs for special education programs may not be adequately provided under the current formula. Many districts will continue to be over or underfunded at that state level as long as the average classification rate is utilized.” OLS calls on the Department to seek legislation allowing for actual classification rates to be used.

In a response letter, Yut’se Thomas, Acting Commission in the Division of Finance & Regulatory Compliance “respectfully disagrees,” citing that the policy decision to change the formula was upheld by the Courts in 2009.

The state has yet to issue the funding study, which was required by SFRA and was to have been provided to the legislature a year ago.

The New Jersey Department of Education has published the guidelines that the state used to determine the aid amounts for next year. State law requires that, for students with disabilities placed in locally operated in-district classes whose special education services and supports cost over $40,000, the state would pay from 75 percent to 90 percent of the additional cost, depending on services. For students placed in out-of-district schools, the threshold is $55,000, after which the state would pay 75 percent.

The new guidelines say that after the computation, districts will receive only 84 percent of the full eligible amount, due to the state’s “limited funds.” To read the memo from NJDOE, click here.

Amounts for each district vary considerably. To see how much extraordinary special education aid will be sent to each district, click here.

Click here to read John Mooney’s article on NJ Spotlight.

The Education Law Center (ELC) has filed a lawsuit on behalf of The Statewide Parent Advocacy Network (SPAN) with the Superior Court of New Jersey, Appellate Division. The suit challenges the New Jersey Department of Education’s failure to comply with a statutory mandate to complete an independent study of New Jersey’s current special education funding method.

The New Jersey Coalition for Special Education Funding Reform has been urging a comprehensive, independent funding study since 1996.