Analysis of New Jersey's Census-Based Special Education Funding System

Augenblick, Palaich and Associates:

As part of the School Funding Reform Act of 2008, New Jersey changed how special education was funded. Prior to 2008, special education students in New Jersey were funded based on their level of need. Each student was placed into one of four need tiers, with higher per pupil funding associated with the higher need tiers. A study done in 2003 by Center for Special Education Finance (CSEF) showed that New Jersey had higher per pupil spending for special education than the national average. 1 The study suggested switching to a census-based special education funding model might help New Jersey control its spending. In 2008, the state made the switch to a census-based model.

Under a census-based funding model all districts are funded for the same percentage of special education students. For the 2008-09 through 2010-11 school years the funding percentage was 14.69%. (This percentage does not include students receiving only speech services, who are funded separately.) Each district's special education funding, excluding extraordinary aid2, is calculated by multiplying the district's resident student population by 14.69% to determine the number of special education students to fund. This funded count is then multiplied by the special education per pupil funding amount to determine the total special education funding allotted to the district. The new system then wealth equalizes two thirds of this amount, splitting it up into a state and local share, and then funds the remaining third entirely from the state. Wealth equalization is a process commonly used in school funding formulas that determines what percentage of funding the state pays based inversely on the relative wealth of each individual district (the wealthier the district, the lower percentage the state pays). It is important to note that districts also receive extraordinary aid for special education students who are extremely expensive to serve. This aid is beyond the basic special education funding.

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).

Posted by Jim Zellmer at November 6, 2011 1:38 AM
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