Family & Community Special Communities
Special Education

Preliminary Study of the Special Education Standard for Services - February 2000

Part 4: COSTS: does Massachusetts' MPD standard result in higher costs?

It is beyond the scope of this report to discuss comprehensively all of the factors associated with costs and comparing costs. This report will point to key pieces of data and commentary on the subject:

The National Center for Special Education Finance (CSEF) states that &$34;There are no comprehensive and accurate data sources that indicate what public schools in the U.S. are spending on special education services. The Office of Special Education Programs (OSEP) stopped requiring the collection of these data after the 1987-88 school year because of concerns over their accuracy and the inability of states to provide this information.&$34; ⁹ Therefore, all conclusions reached in this part of the MPD study report should be treated with caution.

What is the average expenditure for special education students in Massachusetts as compared to other states? Chart D¹⁰ below provides information from a survey conducted by CSEF profiling primarily FY94 data. No such comparative information is available for more recent years. Only 24 states responded with financial information. Over half of the states surveyed were unable to report on the statewide cost of their special education program. Of the states that did report, only 13 had a &$34;high degree&$34; of confidence in their data and another 6 &$34;had confidence.&$34; These 19 states in total form the basis for the &$34;confident&$34; category in the chart. Massachusetts and comparison states in this chart are members of this &$34;confident&$34; category.

CHART D: Average Special Education Expenditure/Per Pupil - FY 94

Even with &$34;confidence&$34; in the information provided, caution should be used in interpreting these figures as comparable. There are differences in the fiscal years, the student count age base, and what is counted by a state as special education expenditures. Data are for 1994 but for MI (95) & WI (93). The special education student count is for ages 3-21 except for MI (0-26), VA (0-22), and MO (3-22).

The exact figures represented on Chart D are: All 24 states: $5,395; &$34;Confident&$34; states: $5,435; MA: $7,131; CT: $8,501; MI: $7,069; MO: $3,597; RI: $5,858; VA: $4,700; WI: $6,593.

• The data suggest that in dollars/per pupil Massachusetts is generally one of the higher-spending states for special education. Economic analyses further suggest that actual dollars spent is a limited indicator of cost and further exploration of cost differences from one state to another is warranted. The following section on geographic variations in costs attempts to provide a more in-depth look.
• Geographic Variations in Public Schools' Costs. Another source of data is available through the National Center for Education Statistics (NCES). Although the report that contains the following data is dated February 1998, most of the spending information is for Fiscal Year 1993¹¹. This delay in information gathered across states continues to complicate our overall assessment. Please note that the NCES spending information is for all of public education (excluding higher education), not just for special education.

There is significant variation in educational services and costs across geographic regions and the variation itself contributes to difficulties in comparing the experience of one state against another. The &$34;geographic cost-of-education index&$34;(GCEI) was created to measure variations in the prices of school inputs (personnel and nonpersonnel items) across geographic locations in the U.S. The NCES report provides the following information through use of the GCEI index (specific references from the report are identified by page number in parentheses):

• There are dramatic differences across states in access to educational resources and services and the relationship between actual spending or real (cost-adjusted) spending. (page ix)
• The next frontier in the arena of education cost analysis involves improving our understanding of the cost effects of &$8230;different student populations&$8230;page xii) [Note: presumably one of the student populations would be special education.]
• School district budget variation - factors: (page 7)
  1. Certified personnel: Teachers account for approximately 50% of school district budgets. Support personnel account for another 10-12%.
  2. Non-certified personnel: clerical, office staff, aides, food service, etc. account for approximately 18-20% of school district budgets.
  3. Purchased services, books, supplies, furnishings, travel, facilities, etc. account for 15-20% of the average school district budget.
• Overall patterns of variation in educational costs are dominated by personnel differences. (page 11)
• Use of the GCEI indicates that in 1993-94 the variation between costs across the United States was as much as 2.6 to 1, or &$34;educational costs in the highest cost districts in the United States are approximately 160% higher than in the lowest cost district.&$34; (page 12)
• Using the GCEI, the five states with the highest costs of education as of 1994 are Alaska, Massachusetts, New Jersey, Connecticut, and New York (in that order). Alaska is significantly higher in cost than the other four and Massachusetts is significantly higher in cost than the remaining three. New Jersey, Connecticut and New York do not significantly differ in their cost index (page 18). This means that to buy the same educational program (including all personnel and non-personnel factors) in Massachusetts costs more than to buy that program in Connecticut.
• The South tends to have the lowest costs of education, the Northeast and far Western states the highest costs, and the Midwestern less-urbanized states tend to fall in the middle to low ranges.
• Table 6 below provides information on comparison states for expenditures in education for 93-94, both actual expenditures and rank in United States and rank when expenditure data is cost-adjusted using the GCEI. NOTE: this information is for public education as a whole (excluding higher education) and is not differentiated for specific student populations such as students receiving special education.

• The use of cost-adjustment indices helps to clarify that a dollar spent in Massachusetts for special education did not buy as much as a dollar spent in most other states, including all of our identified comparison states in FY 94. This suggests that the MPD standard in Massachusetts does not result in higher spending or more services. Moreover, other states that report high expenditures for education in both &$34;cost-adjusted&$34; and absolute dollars, such as Connecticut and New Jersey, operate under the FAPE standard. However, the weaknesses in available comparative financial information suggest treating these findings with caution.
• State, local or federal, who pays? Additional information from the survey conducted by the CSEF provides information on who pays. Chart E reports on state, local and federal contributions during FY93, although there is variation from FY91-94 in the data. This variation in information from state to state is only one element that makes comparison difficult.

  CHART E: Special Education -- Source of Funding - FY 93
  

• The data¹² indicate that prior to the Education Reform Act of 1993, Massachusetts' share of the funding for special education appears to show slightly less state-level commitment than in most of the comparison states. However, this indication must be viewed with caution since although the reporting states indicate confidence in their data, many variables affect reporting on cost. For instance, we know that Massachusetts reported revenues come from aggregated information provided by the school district end-of-year reports. These reports do not include state spending on special education that does not flow through the districts. Thus, for example, the account known in Massachusetts as the 50/50 account (through which the state directly funds 50% of the cost of tuition in private special education residential schools) would not be reflected as a state contribution.
• Has Education Reform increased the state contribution of funds for special education? Although this question is not specifically related to the MPD standard, the amount of funds contributed by the state is a related concern in the debate. The following chart does not differentiate between education funding as a whole and that part of the funds that may be attributed to special education. Further, the spending reported is limited to the spending reported by the public school districts; to the extent that the state pays directly for certain special education or educational services, such spending is not reflected in this chart.

Chart F below shows the sources of funding for Massachusetts Public Schools for FY95-98 with an estimate of funding sources for FY99¹³.

Chart F: Sources of Funding for Massachusetts Public Schools - FY95-99

• The data show that Massachusetts has increased its commitment to funding education consistently since Education Reform was enacted. Comparative data from the nation or other states is not available to determine if Massachusetts' increasing commitment parallels increasing or decreasing commitment on the part of other states.

Comparison difficulty. All comparative financial information should be treated with caution. There is good evidence to suggest that state reporting of financial information is not comparable from one state to another. For instance, some states have different funding mechanisms for services such as counseling or related mental health services. Some states report supportive services such as compensatory education or programs for students with limited English proficiency as &$34;special education.&$34; Some states operate state schools for students with disabilities and others rely more heavily on private programs. Some states include students who are gifted and talented in the category of special education. Age ranges of students served in special education vary from state to state.

In sum, it appears that the cost of education in Massachusetts is high. There is evidence to support such a statement in FY 94 and it is likely that the relative cost of services has not dramatically changed in relation to other states. It is difficult to link the MPD standard to higher spending for special education in Massachusetts as compared to states using a FAPE standard, since other high-spending states, such as Connecticut and New jersey, operate under the FAPE standard. All analysis of comparative education costs and spending is complicated by the fact that the cost/spending data are highly variable and generally out of date.

It is worth noting that many Massachusetts school districts report that a significant portion of new state aid provided to them since the Education Reform Act of 1993 has gone to fund increased special education costs. Further study of Massachusetts special education expenditures in comparison to other states may reveal whether the MPD standard drives up costs in Massachusetts.

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