EDITOR's NOTE: Read the corrected version of this information here.
Over the past several weeks much has been written and said about the budget challenges facing the Dennis-Yarmouth Regional School District. The “Valentine’s Day Layoffs” at Dennis-Yarmouth were blamed on cost overruns in the district’s special education program.
Just scratching at the surface of Cape special education spending yields sobering numbers. When one considers the out-placement tuition ($19 million), funds paid to the Cape Cod Collaborative ($10 million) and the Nauset region’s elementary districts special ed expenditures ($8.5 million) – we found over $37.5 million in special ed expenditures – and that’s without adding in each of the other school districts’ SPED costs.
In order to understand the funding formula for special education, we reached out to Senator Dan Wolf. We received a prompt response, submitted by Senator Wolf’s chief of staff, Elysse Magnotto-Cleary. Ms. Magnotto-Cleary told us she prepared this response after consulting with Rep. Cleon Turner. The statement from Senator Wolf’s office is reproduced verbatim, below.
District pay 4 times the school's foundation amount
First, every school district is expected to pay for special education at four times the school's per pupil foundation amount.
For example, if the per pupil (foundation per pupil) is $10,000 then the school must pay 4 times that, $40,000, before the state will get involved.
Then, the state will provide reimbursement if the total amount of a school's special ed costs for the current year is 125% of last year's special ed costs. The state's involvement is a maximum of 75% of that added cost (depending on budget appropriations).
The state has provided full funding for that 75% for the last three or four budgets. Part of the difficulty for schools is that the school has to spend that money this fiscal year and reimbursement comes in the following fiscal year in four quarterly payments. That is like you total your car in an accident and the insurance company pays you next year in quarterly payments.
Note that a schools per pupil foundation amount is less than the actual per pupil costs. That is because the school's total budget is made up of the foundation amount and the above foundation amount. DY's per pupil cost considering the total budget is $13,859 so its foundation per pupil cost would be something less than that.
Chapter 71B, section 5 describes the issue of a student moving into the district after budgets have been set. That, too, is complicated.
Special ed averages about 20% while the state pays 12%
There is a page on the DESE web site that says that the percentage of school budgets for special ed averages about 20% while the state actually pays 12%.
There is no incentive for schools to exaggerate the number of special ed students because schools lose money on the reimbursement. There is also a disadvantage to some extent for schools such as DY that do as much as possible to keep their special ed students local (in the school rather than out of district) because parents of special ed students may shop around for schools that treat special ed students better or that keep them in the school so they can be at home with their families.
And, for edification, if there is a DY special needs student that goes to a charter school, it is DY that pays the special ed costs, not the charter school. If there is a charter school student with an IEP, it is DY that pays the costs of the IEP, not the charter school.
A chilling take-away from the explanation above is that a town school district has “nowhere to hide” when it comes to special education services.
Prior to the advent of school choice, the parent of a special ed student either accepted the services their hometown school district offered or hired a lawyer to force the issue.
School choice and charter choice offer parents option
School choice and charter choice now offer a dissatisfied parent the option to shop around to find a school that agrees with the parent’s vision of the child’s IEP. The parent can then “choice” their child to the destination school district, with the entire cost of the child’s special ed services falling on the hometown school district.
Thus, if a DY parent is unhappy with the services the district provides to her child, she can move the child to a more malleable school district and literally send the bill to DY Superintendent Carol Woodbury.
In the case of special education, school choice is a perfect escape hatch for the dissatisfied “customer”.
A New Slant on School Competition?
Sooner or later, some smart Cape school district will zero in on special education as the next school choice opportunity. They will build the best special education program in the county and will start recruiting high need students that will benefit from the services they offer. On that day, the cries about school choice will resonate even louder than the current outcry over charter school “losses”.
If “regular day” education has become a customer-satisfaction-centric experience, special education is an even higher stakes game in the school competition ecosystem. Anecdotally, special ed parents tend to be strong advocates for their children and to have an excellent understanding of available services.
Instead of a school choice kid carrying away a few thousand dollars or a charter school student taking $10,000 out of the district, a single special ed student could easily “choice out” with a six figure bill going back to the hometown district. The destination district is free to focus exclusively on the needs of the special ed child and her parent because they won’t be footing the bill.
Many believe that the only “defense” a hometown school district has against “exsanguination-by-special-ed-choice” is to capitulate to the demands of special ed parents, no matter how costly or capricious.