The NJ State DOE has just released a report commissioned by Denver-based Augenblick Palaich and Associates (APA), which seeks to answer the question, does the School Funding Reform Act adequately fund district costs for students with disabilities? Here’s a press release from Education Law Center, which points out that the study was mandated by the Legislature in response to a lawsuit filed by the NJ Statewide Parent Advocacy Network, which is represented by ELC. The press release also notes that the study was released 16 months later than “the required completion date of June 30th, 2010.” Here’s the full report.

So what’s the problem?

Get out your abaci.

First, a little back story. New Jersey currently has about 185,000 kids who are eligible for special education services, out of a total enrollment of about 1.3 million. Before SFRA, costs for special ed kids was calculated based on the individual level of need. But after the passage of SFRA, we went to a census-based model which calculates state aid for kids with disabilities based on a percentage above cost-per-pupil of 14.69%. The idea behind the census-based model was that we could control our special ed costs, which are among the highest across the nation.

The formula is also weighted for high high cost-disabilities (like autism, emotional disturbances, deaf/blind, severe cognitive impairment); moderate-cost disabilities (like moderate cognitive impairment, auditory); and low-cost disabilities (like specific learning disabilities or communication-impaired).

First problem right off the bat: a census-based model assumes that all of our 591 school districts have about the same number of kids with disabilities and that our costs are similar. Anyone familiar with NJ’s public education system knows that there are inequities among districts, specifically between richer and poorer ones. Also, poor districts tend to have much higher kids who are classified for special education services. (Camden Central High, for example, lists 33.6% of their students as disabled.)

APA sought to analyze whether SFRA underfunds kids with disabilities. But the firm encountered a number of roadblocks. First, some of the data necessary (and specified as necessary in APA’s proposal to the DOE), was either unavailable or unreliable:

Once we received the data, however, it became clear that the districts were not reporting these disability category expenditures lines consistently. As Table V-2 in the data analysis section shows, many districts reported no expenditures at all into the categories and when expenditures were reported the per pupil amounts were inconsistent and difficult to interpret…Certain student-level disability information was not possible to obtain.

Data collection was also hindered by the lack of consistency among districts in reporting data to the State. Another obstacle was districts’ reluctance to participate in interviews. The report notes,

Prior to presenting the results of the interviews, it is important to note the climate that they were conducted in. The interviewees were identified both by the DOE and through APA data analysis. Regardless of how participant districts were identified, it proved to be difficult to get districts to participate in the interviews. Underlying this problem seemed to be the perceived relationship between the districts and the state. Though many districts simply did not return calls and emails requesting interviews, those that did often mentioned that the consistent budget cuts have created some animosity about participating in state run studies. They also mentioned that they found it difficult to find the time to participate in outside studies. At least one district mentioned participation in a court case against the state as reason not to participate. Ultimately, we were able to get a third of all districts we contacted to participate.

When APA was able to interview districts, they found that staff members felt that a census-based model was unfair. For example, one district is located near a military base and staff members told APA that the military “sends families with high needs children to that base and thus the district gets a large number of high needs students.” Also, some districts get a reputation for great special ed services (particularly in wealthy districts) so “families hear about and will specifically pick the district to move into.”

In other words, a census-based model, predicated on the assumption that each district will enroll approximately the same number of children with high-cost disabilities, is fundamentally flawed. Elementary schools spend more than high schools. There are variations in the number of kids sent to out-of-district placements. In addition, richer districts (I and J DFG’s) spend more on than poorer districts (A and B DFG’s), which is a whole other post.

Here are APA’s “tentative conclusions:”

(1) New Jersey might need to consider funding special education based on the actual enrollment of special education students in districts and
(2) the state might need to consider some differentiation of funding for higher cost students before the extraordinary aid threshold is reached.

And, finally,

If it is found that the census system creates these higher burdens then adjustments need to be made to the special education funding system to addresses the inequities created by the census based funding. This might include differentiating the current census based system by type of district or eliminating the current system and funding districts based on actual special education students with regard to the higher costs associated with certain students.