Tag: special education funding

Testimony: Special Education Finance in California

Paul Warren, research associate at PPIC, testified today (March 28, 2019) before the Senate Education Budget Subcommittee, as part of a hearing on district financial conditions. Here are his prepared remarks.

The committee asked PPIC to help them understand why district special education costs are rising so quickly.

First, some background. The AB 602 formula provides about $500–600 in state special education funds per student in each district, based on average daily attendance (ADA). The number of students with disabilities in a district does not affect state funding amounts. Each year, that amount is increased by the change in ADA and by a cost-of-living adjustment.

In the PPIC report, Special Education Finance in California, my colleagues and I identified several reasons why AB 602 funding has not kept pace with district costs:

  • Changes in the rate and type of disabilities. We estimated that these changes increased annual district costs by around $1.1 billion. The state formula is currently based on average district costs from the late 1990s.
    • The share of students identified with disabilities increased by 5.7 percent from 2010–11 to 2015–16.
    • Disabilities that are, on average, expensive to address have increased. Autism, in particular, continues to increase as a share of students with disabilities.
  • Growth in preschool for children with disabilities under the age of 5. This population grew about 10 percent from 2005 to 2015. The AB 602 formula does not adjust district funding for changes in this group, as pre-school children with disabilities do not count toward ADA.
  • Higher district salaries since the Great Recession. The large LCFF increases during the economic recovery shaped salary negotiations. But AB 602 did not adjust to the higher costs for special education teachers and administrators.

In a report from last year, Revisiting Finance and Governance Issues in Special Education, we provide two options for modifying the AB 602 formula:

  • Increase AB 602 by the same percentage amount as LCFF funding. This makes sure that state funding for special education increases at the same rate as LCFF.
  • Increase AB 602 by the actual increase in special education costs. This would hold the state share of special education costs constant over time.

We also recommend caution when considering proposals to base state special education funding on counts of students with disabilities. Differences in district identification practices affect the share of students identified for special education services. We found that the county with the lowest rate of students with disabilities reported that about 8.8 percent of students were in special education. In contrast, the county with the highest rate reported that about 17.6 percent of students were in the program. This disparity strongly suggests that district practices affect district caseloads, and basing state funding on the number of students with disabilities could create financial incentives to identify more students.

Our two options would avoid this identification problem while better aligning state funding for special education with LCFF and district costs.

Thank you for the opportunity to discuss these important issues.

Improving Special Education in California

What are the most significant challenges in California’s K–12 school system today? A new report, Getting Down to Facts II, recently released comprehensive findings. PPIC was asked to weigh in on the topic of special education.

We contributed an update to our 2016 report, Special Education Finance in California. This report concluded that state funding for services to students with disabilities is inequitable, inadequate, and lacks transparency. It also fails to provide the same level of local control as other state funding programs. In addition, preschool services to infants and toddlers with disabilities are lacking.

Our new report, Revisiting Finance and Governance Issues in Special Education, expands the analysis of these issues. Overall, we suggest that weaving greater accountability into governance and finance of special education has the potential to improve equity for students with special needs.

Specifically, we find:

  • The state has several good options for revising the special education funding formula so that it better reflects district costs. However, we find that basing funding on the number of disabled students in each district could create negative incentives for districts.
  • Better funding for services to infants and toddlers with disabilities would encourage districts to increase the number of children receiving early services, which would improve behavioral and cognitive skills in some children.
  • Current accountability measures for student success do not acknowledge the unique program factors that can affect district performance data. We find the growth of individual student outcomes is a better measure of progress than the average group scores for all students with disabilities.

We also revisit the role of regional Special Education Local Plan Areas (SELPAs) in special education finance. SELPAs provide support to districts and students in a number of ways, including in the allocation of state and federal funds. We find that district superintendents strongly support their local SELPA, although they provided numerous suggestions for improvement. And we discuss ways that SELPAs could give districts greater autonomy when districts determine that SELPA financial arrangements do not meet local needs.

Debate over How Special Education Is Funded

Last month the state Department of Finance held meetings in Los Angeles, Sacramento, Fresno, and San Mateo to get input on improving special education, the state’s largest K–12 categorical program. The Department of Finance asked PPIC to kick off these meetings with a presentation of findings and recommendations from our recent report on special education financing. The report calls for folding state special education funding into California’s new Local Control Funding Formula as a means of improving local flexibility and accountability. Currently, state and federal funds are distributed to regional administrative entities known as Special Education Local Planning Areas (SELPAs).

The one consistent theme at the public meetings was a call for more money from local educators and parents. Beyond that point of agreement, though, these discussions did not lay out a clear path for the state to follow in its effort to improve services for disabled students.

Our report is not the only one to call for major changes in special education. A study published by the Statewide Task Force on Special Education in 2015 concluded that California’s special education program suffers from “systemic dysfunction.” It says that, too often, students miss opportunities to grow because they are served in separate programs outside the regular classroom. The task force encourages changes at both the state and local level to integrate special education with the programs that serve nondisabled students. The report also recommends earlier services to children with disabilities, an integrated state and federal accountability system for special education, and more funding for local programs.

The Department of Finance staffers made it clear that the reports were a starting point, and that they were looking for suggestions about how to make special education more effective and efficient. Many who attended the meetings argued that special education is underfunded by both the state and federal government. Many also commented on the need to improve the way infant and preschool services for children with disabilities are funded.

PPIC’s recommendation to send funds to districts rather than SELPA was mostly opposed by the educators, parents, and administrators who spoke at the meetings. These participants often voiced support for SELPAs, and worried that our recommendations would hurt small districts or the network of regional services that SELPA funding supports. Larger districts, on the other hand, noted that they may bear a disproportionate cost of these small district subsidies and regional services. Several parents also voiced concerns about the proposed shift in funding, because they believe district administrators are less supportive than SELPA staff.

The meetings demonstrated the difficulty of developing a funding system that will be effective in every district in our large and diverse state. They underscore the logic behind the Local Control Funding Formula: Improving performance requires giving school districts greater control over critical program and funding decisions, but that control must be balanced by a broad accountability system and monitored by parent and community oversight. As we argued in our report, only school districts can address the systemic dysfunction of California’s system, and the state needs to give them the control and accountability to do so.

With the March outreach meetings concluded, the ball is in the Brown administration’s court. It will be worth watching whether the governor proposes any program changes during budget discussions later this year or in next year’s budget.

Learn more

Read the report Special Education Finance in California