How the Christie Administration hopes to control rising special education costs

Last week I blogged here about three reports issued by the Christie Administration’s Education Task Force over the last three years. In large part, the reports attempt to extract the Department of Education (DOE) from the paperwork-festooned corner it’s painted itself into over the last decade, stuck in the thankless role of monitoring school districts’ compliance with endless regulations instead of overseeing the improvement of N.J.’s public school system.

Example: one of the regulations meticulously monitored by the DOE mandates that school districts hire one janitor for every 17,500 feet of building space. Is that a matter for the esteemed DOE? Not really. So, recommends the Task Force, eliminate the regulation and instead concentrate on substantive issues that address student achievement.

But not all of the reports deal with eliminating regulations or diminishing governmental oversight. In fact, the last Report takes on the complex issue of special education. Here, instead of recommending diminution of the DOE’s oversight, the Task Force recommends that the DOE take a much stronger role, particularly with regulating the tuition increases charged by N.J.’s healthy industry of private special education schools.

How N.J. works with students with special needs  

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First, a little back story. When a child is determined by a team of specialists to be eligible for special education services – in NJ, 16.8% of students are eligible, the 5th highest rate in the nation — the next step is crafting an Individualized Education Plan (I.E.P.) and deciding on necessary services and accommodations. Does a child need speech, occupational, and/or physical therapy to benefit from the school curriculum? How about Braille books or amplified sound equipment? Does he or she need specially-designed reading programs for language processing disorders? What about small class size to accommodate emotional or behavioral challenges? Kids with developmental disabilities might need modifications to the curriculum; kids on the autism spectrum might require social skills training and specialized teaching techniques. All needs are listed in the I.E.P., which serves as a contractual agreement between student and district.

Once specialists and parents agree to appropriate services, the next step is deciding where those services will be supplied. According to federal law, school districts must place special needs kids in the “least restrictive environment,” or LRE. LRE’s run a gamut from least restrictive – placement in a regular education classroom – all the way to full-time residential settings. New Jersey historically has a predilection for placing children in restrictive settings, particularly private special education schools.

Out-of-district schools can be expensive

This expensive habit of placing kids in private special education schools is due to our fragmented school system infrastructure of 590 school districts. Compared to the rest of the country, New Jersey ranks 1st in the number of school districts per square mile. While charming little schools reflect our penchant for local control, this affinity for home rule also buys us inefficiency (in municipalities as well as school districts). In the area of special education, inefficiency means that your typical little district is incapable of putting together enough kids to fill up a class of kids with autism or developmental disabilities. Thus, we rely on a variety of out-of-district placements to meet a child’s needs, including county-run schools and private non-profits.

New Jersey School Boards Association published a great report in 2007 that estimated N.J.’s expenditures on special education at $3.3 billion. (It’s higher now.) The major cost drivers are tuition to out-of-district private special education schools and transportation. According to NJSBA, out-of-district special education placements “involve 10% of New Jersey’s special education population, but make up 40% of the total cost of special education.”

(For counterpoint, ASAH, a great organization that represents private special education schools, has done its own cost-analysis. And here’s an index of private special education schools in NJ.)

The plan to control costs

So the Task Force’s long-term plan is for the education department to “identify ways to improve student achievement” and manage special education’s “rapidly escalating costs.” While there are plenty of short-term suggestions that involve tweaking various regulations, in large part the Task Force’s proposals for special education focus on those private schools.

In particular, the most recent Report takes aim at the “egregious pay” awarded to employees at private special education schools and the DOE’s inability to monitor and audit tuition there. The Task Force acknowledges that “the demands of an effective review and reconciliation of rates for every [private special education school] strains the capacity of the Department’s finance staff.” The lack of oversight of tuition rates has led to “ill will”; “taxpayers are suspicious” that the schools “are deliberately and artificially increasing their costs.” The schools themselves “are suspicious that they have been targeted for extreme scrutiny and have been given an automatic presumption of dishonesty; and school districts are made party to a payment system over which they have little control…”

The Task Force recommends that tuition rates – which in a few cases top $100,000 per year –– be determined by committee. Typical, right? To be fair, our special education system, like our regular education system stymies all attempts at efficiency and cost-control. Welcome to New Jersey.


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