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Legislators Hold Hearing on Special Education Funding 

March 9, 2018

A joint informational hearing on February 28 with California’s Senate and Assembly education budget subcommittees and education committees reviewed the latest reform in special education funding, Assembly Bill 602, which readjusted the distribution of special education funding. The hearing was the latest consideration of how special education is funded in the state - one that has occurred several times over the previous decades.

Experts at the hearing were in agreement that the current funding model, established in 1998, is an improvement over previous methods, which supplied funds through about a dozen disability-specific special education categories, each with its own eligibility criteria and funding rules.

Instead, AB 602 funds special education based on the Average Daily Attendance of the entire student body, not in relation to the number of students with disabilities in a particular district. These funds are distributed through education agencies called Special Education Local Plan Areas, or SELPAs, that allocate money, provide services and oversee operations. The previous system incentivized districts to classify students into the disability categories that generated the most funding, according to a report presented at the hearing by the Legislative Analyst’s Office.

However, when special education costs increase and consume a larger part of the budget than what state and federal funds provide for, local districts end up footing the bill. “Imagine special education funding as a three-legged stool,” said CSBA Legislative Advocate Erika Hoffman. “Ideally, each leg would contribute an equal amount: federal funding, state funding and local funding. However, that is just not the case. Federal contributions come in at about 10 percent, the state contributes somewhere between 30 and 40 percent and the rest is funded by the local districts.”

Ryan Anderson from the LAO cited some of the pressing concerns with the current funding model during the hearing. These include:

  1. SELPA per-student rates vary notably, from $488 to $936 per student in 2017-18;
  2. SELPA special education identification rates also vary notably: The AB 602 system assumes ADA is a good proxy for students with disabilities, however, SELPA identification rates are not always consistent with ADA;
  3. Special education per-student expenditures are rising faster than funding: Adjusted for inflation, per-student special education expenditures increased 12 percent between 2005-06 and 2015-16. Over this same period of time, inflation-adjusted, per-student Proposition 98 funding increased 2 percent; and
  4. State does not provide special education funding for preschool-aged children with disabilities, even though SELPAs are required by federal law to serve all 3- and 4-year-olds with disabilities.

"AB 602 succeeded at its initial policy goals, which was simplifying the system and specifically eliminating disincentives for serving students with severe disabilities in mainstream environments,” said Anderson. “One area the state has moved away from is being as precise in how it targets special education funding for special education need. That is certainly an area for the Legislature to think of ways they can improve upon it."

Several representatives from the special education field spoke about their experiences with special education funding at the hearing. Director of Santa Clara County SELPAs Anna Marie Villalobos also pointed to the need for equalization in funding. “I oversee five SELPAs and the base funding ranges from $496, the second lowest in the state, to $676, the sixth highest in the state," she said. "As a result of the way the state funds special education each year, [due to declining overall enrollment] we are enrolling more students with disabilities, and each year we receive less funding to serve them."

The hearing closed with comments from Maureen Burness, co-executive director for California’s Statewide Task Force on Special Education and Senior Consultant for Special Education at Total School Solutions. "The equalization issue is absolutely one of the most critical issues of continuation," she said. "The other is that we went to a K-12 model, but are responsible in special education from birth to age 22." She referenced a 2015 report in which the task force made several recommendations to the state, all of which are still relevant.  Highlights include:

  1. Equalize the state’s support for special education across California by overhauling the system of special education financing to give districts more control over how they spend their money and to hold them accountable for adequately meeting the needs of students with disabilities;
  2. Ensure the availability of early intervention programs and services for all eligible students with disabilities and address the disparity of early intervention programs and services among early childhood care and education entities;
  3. Fund SELPAs based on ADA, but increase the amount allocated per ADA so that SELPAs are more equitably funded;
  4. Revise the special education funding formula so that the growth or decline in the enrollment of multi-district SELPAs is based on the growth or decline of ADA for each individual district, charter school or county office of education instead of on these changes in the SELPA as a whole;
  5. Update the electronic data systems that account for special education income and expenditures, which would allow current California Department of Education staff to devote more time to analyses, while also allowing SELPA staff to better target funding;
  6. Increase the funding for WorkAbility programs so that all SELPAs are receiving adequate WorkAbility funds; and
  7. Provide sufficient funds to LEAs to meet their mandated special education transportation costs.

This informational hearing marks the beginning of another push to reform special education funding in the state. CSBA will keep our members updated throughout this process.

Source: California School Boards Association

A Total School Solutions publication.