Send special ed funding directly to districts, not regional agencies, report says

November 29, 2016
A music student places her hand in the music teacher's palm.

A mixed class of students, some with special needs, learn music in the Coronado Unified School District.

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The state should dismantle its system for distributing special education funding for California’s 718,000 students with disabilities and send the money – billions of dollars – directly to local school districts, according to a much anticipated report that’s expected to draw the attention of Gov. Jerry Brown and state education leaders.

The recommendations, made by researchers at the nonpartisan Public Policy Institute of California and released Tuesday, would upend the way special education finance has worked in the state for nearly 40 years and potentially put out of business 133 regional special education agencies known as Special Education Local Plan Areas, or SELPAs.

State money for special education would be folded into the Local Control Funding Formula, completing Brown’s goal of creating a unified funding system for all children. Funding earmarked for students with disabilities would continue to be spent for general special education, but districts would have “no firm restrictions on use,” the report recommended. Districts would have more flexibility to respond to individual needs earlier, before formally designating students as having disabilities.

“We recognize some may find this option threatening,” said the PPIC report’s authors, led by Laura Hill and Paul Warren. “Nevertheless, we view it as a critical step towards a more integrated system of special and general education.”

If Brown and the Legislature were to adopt the recommendations, school districts would face new challenges to ensure students are properly identified as needing services, provide the necessary services, and report data on the demographics of students in special education to state and federal governments.

State Board of Education President Michael Kirst called the recommendations “bold and provocative.” He is to participate in a panel discussion on the proposal at noon Tuesday at PPIC’s Sacramento office.

Special education has long been an island in education. Because of financing complexities and federal and state special education mandates, Brown left special education out of the Local Control Funding Formula law in 2013. The $12 billion special education budget in California in 2014-15 – a mix of district, state and federal funds – inadequately served students, according to the final report of the Statewide Task Force on Special Education this past year.

The rights of students with special needs and their families are dictated by complex federal laws. And the academic performance of students – the majority of whom are not intellectually impaired but must overcome speech and language disorders or learning disabilities – lags their peers. The Statewide Task Force on Special Education issued a call for training teachers to co-teach with special education teachers to meet the needs of many students in one classroom.

The task force cited the same major financing problems that the PPIC report identified.

Inequitable funding: SELPAs are funded based on outdated 20-year-old formulas. There are wide disparities, with the top fifth of SELPAs getting 40 percent more funding per student than the bottom fifth.

Inadequate funding: In order to discourage overidentifying students with disabilities, SELPAs are funded based on districts’ overall student enrollment, not the percentage of special education students – a formula PPIC wouldn’t change. However, Brown has put more money into the Local Control Funding Formula and kept special education funding flat over the past decade, PPIC said. And funding has not responded to the increase in students with severe disabilities, such as autism.

PPIC estimated that raising per-student funding to the level of better-funded SELPAs and addressing higher costs generated by rising caseloads would cost between $670 million and $1.1 billion annually.

Poor accountability: “California does not hold SELPAs accountable for student success in any formal way,” PPIC wrote. The state doesn’t set performance goals for special education, and SELPAs aren’t required to track student performance, the report said. Each SELPA has its own formula for distributing state and federal funding. “We were unable to find budget and administrative plans on the internet for more than half of the state’s multidistrict SELPAs,” the report said.

Districts would be held more accountable by incorporating special education into school districts’ three-year spending documents, known as Local Control and Accountability Plans, the report said. Districts would be asked to set goals and chart the progress of students receiving special education services. Parents would be better able to share their perspectives, the report said.

The task force did not recommend the demise of SELPAs. In a paper last month, the task force’s co-executive directors, Vicki Barber, former director of the El Dorado County SELPA, and Maureen O’Leary Burness, former director of four different Northern California SELPAs, suggested that fixing the current system would be the preferable option.

“Troubling issues would have to be addressed to avoid unintended consequences” of moving toward direct district funding, Barber said in an interview Monday. She said SELPAs negotiate contracts for services, spread the costs of serving students with very expensive needs, and provide expertise and administrative services. Most of the state’s districts have fewer than 2,500 students and would struggle to provide these functions on their own, she said.

PPIC said the possible roles of SELPAs, without directly funding them in the future, would need to be redefined and clarified. Under the new approach, districts presumably could choose to keep funding reconstituted SELPAs for some functions, create new multidistrict agreements or contract services with providers of their choice.

Kirst had encouraged PPIC to do the study, which was funded by the Dirk and Charlene Kabcenell Foundation and the Stuart Foundation.

Cid Van Koersel, program director for WarmLine Family Resource Center in Sacramento, a federally funded parent training and information center for special education, said parents don’t know much about how special education is financed.

“Ninety percent of the time, families have never heard the word ‘SELPA,’” Van Koersel said. But she said they do know the services they want and need, and she wondered what would happen if the SELPA funding system disappeared. The local planning areas fund programs through county offices of education, she said, including programs for students who live in districts that are too small to provide services.

“What about the SELPA-run preschool for children with autism?” Van Koersel asked. “Who is going to provide that program?”

EdSource receives funding from several foundations, including the Dirk and Charlene Kabcenell Foundation and the Stuart Foundation. EdSource maintains sole editorial control over the content of its coverage. 

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