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How Student-Based Budgeting Is Revolutionizing Special Education

Student-Based Budgeting (SBB) is the fairest way to use limited resources to best help students. Nowhere is this clearer than in special education funding, where traditional models fund schools based on the adults in the system, not the kids.

The status quo in education finance keeps most parts of a school budget under district control. Based on rough enrollment quotas, the central office funds staff salaries and programs but this process does not address the actual student needs of each school. Inevitably, districts artificially create needless inequality by sending different amounts of per-student resources to their individual schools that do not necessarily reflect student needs. Staff-based funding’s problems acutely affect special education students, who need our support most but who benefit least from the current system.

Schools get the same average funding from their district based on their number of special education students. In a field where attention to individual needs should be paramount, districts that don’t use SBB limit their opportunities for flexibility and accountability and cut off possibilities for their special education students.

Benefits of SBB

Student-Based Budgeting keeps the focus of education resources where they belong: on the students. Under SBB, funding follows every child wherever they go to school and gives increased budget control for individual principals. Students with increased needs, particularly those in special education, get extra funding weights to ensure their school has the resources to help them. This way, a school’s budget reflects what its student body looks like, not how it compares to arbitrary quotas. When the money follows the child, it’s easier for parents, schools, and districts to scrutinize how their dollars are spent and ensure they’re used to benefit students at the school level.

Boston’s creation of tiered special education weights show how SBB keeps the focus on student needs. Just as a disorder like autism has a spectrum of severity, so too can districts using SBB tailor their funding weights by the degree of student disability. Boston created 11 special education categories with weights from 1.6 to 6 times the base per-pupil funding. By devolving special education funding to its schools, Boston transferred $83 million of additional special education resources to principals with local knowledge of their students’ needs.

Hartford, like Boston, tiers its special education funding weights. Hartford has a four-tiered special education weight with the first tier receiving an extra .8 percent of the base funding formula and the fourth tier receiving an extra 4.08 of the base level. A 2012 study by Public Impact found that when SBB was fully implemented, schools in the highest-need categories, including schools with the highest number of special education students, consistently received more funding than schools in the lower-needs group as compared with the school-level funding before student-based budgeting.

The bottom line is that in Hartford, moving to student-based budgeting and attaching special education funds to the student actually increased school-level resources for those students. One school took advantage of the extra funds student-based budgeting provided to create a better-equipped center for students with disabilities to replace their previous special education classroom. The school was able to staff the room with more adults than possible before the SBB reforms.

No district has gone further than New Orleans in using student-based budgeting to more equitably meet the needs of special education students and demonstrate the potential of student-based budgeting to improve equity and transparency for special education funding. Before Hurricane Katrina, Louisiana in general and New Orleans in particular were in the national spotlight for failing to serve special education students. The city only graduated 5% of its special education population while Louisiana was 49th in the nation in its overall percentage. After the storm, the state-run Louisiana Recovery School District rebuilt New Orleans’ education landscape, making 98% of school funding follow the child via SBB.

Results

The results have been clear. In 2013, special education graduation rates have shot up to 48%, while special education students continue making gains in reading and math scores along with the rest of the city’s students.

In a recent second wave of special education reform, schools in the Recovery school district will now receive student-based funding according to both a student’s disability type and the amount of time he or she receives extra services.

The new formula has five tiers, ranging from $1,500 to $20,000, and is tied to both diagnosis and the total number of minutes students spend receiving services each week. For example, schools will receive either $13,000, $15,000 or $20,000 for a student with autism; for students with developmental delay, the extra money will range from $8,000 to $15,000. All students with speech/language impairments will still be in the lowest tier: $1,500. The state education board analyzed several hundred special education plans and found the service minutes didn’t vary much for students in the lowest tier.

In addition, the Orleans Parish School Board and RSD have developed a Citywide Exceptional Needs Fund to help schools share catastrophic costs across schools and fund particularly high-cost students. OPSB has contributed $5 million to the fund and will provide $1.4 million each year.

The New Orleans SBB special education funding formula offers the most decentralized funding system of special needs students in the United States and allows principals to make decisions about how best to allocate funds at the school level. As the Center for Reinventing Public Education (CRPE) explained in their comprehensive January 2015 report on special education funding in New Orleans:

“Unlike the more prescriptive approach embedded in most traditional school finance systems around the country—which fund a specific classroom configuration or staffing set up—New Orleans grants schools the flexibility to use the resources in the way they think best supports a student. New Orleans’s move takes student-based budgeting into the special education realm, expanding the possibility of finding more innovative ways to serve students with special needs.”

As former Louisiana Board of Elementary and Secondary Education board member Leslie Jacobs explained in her feature on some of these innovative solutions: Charter Schools Help Improve Special Education in New Orleans:

“ReNEW Schools offers a program for students with moderate to intensive emotional disturbance and related disabilities. Collegiate Academies has a Special Education Transition Program to support job-skill development for students with intellectual disabilities. FirstLine Schools offer a therapeutic gardening program for students with emotional and behavioral disabilities. And more innovation is in the works. Next fall, in collaboration with OPSB and Tulane Medical School, the RSD will open a therapeutic program for students with mental and behavioral health needs that affect their ability to succeed in a traditional school setting.”

Beyond anecdotal success, student-based budgeting structurally treats special education students as important members of a school community. SBB gives school administrators added incentive to integrate special needs students into school life. Schools that win a reputation for delivering special education effectively stand to attract new students and funding to use their services. This truly puts the financial focus on the needs of special education students rather than prescriptive centralized special education services – and it creates a better future for those students in the process.

About the Authors

Image of Tyler Koteskey

Tyler Koteskey is an education policy analyst at Reason Foundation, a non-profit think tank advancing free minds and free markets. He studies the rise of school choice across America, focusing on portable funding strategies such as student-based budgeting.

Image of Lisa Snell

Lisa Snell is the director of education and child welfare at Reason Foundation, a nonprofit think tank advancing free minds and free markets. She has authored policy studies on school finance and weighted student funding, universal preschool, school violence, charter schools, and child advocacy centers. Snell is a frequent contributor to Reason magazine, School Reform News and Privatization Watch. Her writing has also appeared in Education Week, Edutopia, The Wall Street Journal, USA Today, San Francisco Chronicle, Orange County Register, Los Angeles Times, and numerous other publications.

March 16, 2016