GARDEN STATE COALITION OF SCHOOLS/GSCS                                                   STATE BUDGET FY’16 Assembly Budget & Appropriations Committee 3-24-15               

The School Funding Reform (SFRA) formula has been held flat, as well as not updated, in recent years. Special Education funding consequences, as a result of flat funding and stale enrollment numbers, distorted 'reach' of aid, and census-based average methodology for distributing special education aid, is not meeting expectations of the School Funding Reform Act (SFRA). Inequity and unsustainability are a growing result.

The method of special education funding that is based on statewide averages, known as census-based averages per the SRFA formula, is not working as predicted. Children with special needs are individuals, as are their disabilities. The SFRA has been touted as a formula that follows the individual child but this is not how it works for special need students. . It violates the SFRA rule – i.e. “money follows the individual child” - by awarding aid to districts (approx. $15K/per pupil) according to the averaged rate number for so-called special education students in each district. (The 14.69%, average is based upon the average statewide number of disabled children in the ’08-09 School Year - five years ago. Simple but not sensitive at all to differing types – and cost – of disabilities, nor to variances in special needs student populations within districts. The consequences:

• Districts receive no funding for the number of individual children that exceed the statewide average of 14.69% multiplied by the district enrollment, and for whom the district is mandated to provide services.

• The $15,600 per pupil does not acknowledge the cost variation between the mildly disabled student and the severely disabled student for whom the district generates an Individual Education Prescription (IEP), a document that legally obligates the district to provide a highly specific, individually based constellation of services regardless of aid.

The ‘Census Based’ method has become a budgeting ‘Catch 22’ – Statutory and regulatory mandates have protected children with disabilities by ensuring the provision of services to children with special needs. Regardless of the ‘Census Based’ method and its original state intent to prevent over-classification, it has become a ‘Catch 22’ for districts that are legally required to provide services based upon the individual student’s disabilities. The consequences are as follows:

• There are 9,188 ‘phantom’ students, that do not exist, but for whom a district receives aid, and 166 districts where phantom students are counted for such Special Education aid awards;
• While the existence of 9,188 phantom students indicates a ‘disincentive’ to classify, more importantly, there are 25,323 disabled students in 379 districts that the state has mandated to receive services for whom no Special Education Aid is available from the state per the census-based method. These special needs students are literally ‘invisible’ to this method of funding. FYI since the SFRA has been in place for nearly 7 years, one would have to conclude (by virtue of this real time test) that the IEPs are real and the incentive concept to over-classify used as rationale for the census-based average method simply does not apply.

Flat funding has exacerbated the negative consequences set forth in (1) and (2) above. Overall, school funding has been frozen for several years while school communities grapple with fiscal pressures that are compounded by additional issues, such as rising health care costs and long term effects of 2% caps among others. Financially these factors are destabilizing for local districts as is. However, this picture, when combined with the negative impacts caused by the special education census-based averages that have not been updated and underfund so many, leads to exacerbating the cracks in fiscal needs at the local level. Not sustainable over time. Certainly not good for N.J.’s special education, nor regular education students…This issue must be, should be, and - equally important - can start to be addressed now.

Attached- Context of School Funding 2014-2015; Charts - 11 Columns; Statewide Funding 8 years; Statewide Total Enrollments Decrease/Increase ’09 to ‘14