As the state considers the risk of adding a new casino, Connecticut must beware of another plan to gamble with funds for students with disabilities. Based on its flawed analysis of special education, the plan could be a jackpot for profiteers and charter school entrepreneurs. We must stop this scheme and consider better alternatives.
Over the last several years, special-education costs steadily and predictably increased for most districts. At the same time, Connecticut’s support for public schools and special education has not kept pace with the increasing needs of students with disabilities. Related to cost is the issue of quality. Thus, local towns and cities have increasingly felt crunched.
There are several possible responses. Connecticut could increase funding for general and special education. Districts could partner for more regional efficiencies. Early intervention, pre-k, and better support in general education could reduce the need for outplacements. These responses, many of which were proposed by the MORE Commission in 2015, match the problem.
However, the Legislature is considering a plan to gamble with special education funds. The details are murky, but here’s a rough outline of the plan:
Step 1: State withholds up to $600 million in grants that help pay for special education in local public school districts.
Step 2: State decides how much each district receives for special education and sends at least a portion of the grants back to districts as a “new” grant.
Step 3: State confiscates $50 million of special education funds to start a private investment/insurance fund to pay for any future cost increases.
Step 4: Repeat steps 1-2 and districts contribute a yearly fee to investment/insurance fund.
Initially proposed by the Connecticut School Finance Project to help districts face the “ups” and “downs” of special education costs, the governor’s administration, as well as other education reformers, have now endorsed the plan. Yet, as Deborah Richards from the Capitol Region Education Council stated, “the primary issue is cost” of special education, not volatility.
If this plan sounds like a scam to you, then you are not alone. Special education advocate Dianne Willcutts, stated that it, “does not ensure that Districts will be in compliance” with special education law. Attorney Andrew Feinstein warned “this bill (SB 542) does nothing to help children with disabilities” and voiced concern that it would “actually harm children with disabilities.”
Even potential supporters were unsure. The Connecticut Association of Boards of Education called for more details. Others called the plan “unclear.” Two parents claimed this offers more equity, but shared only personal anecdotes.
So who benefits?
The State: By moving money around and adding some dollars in the first year, the administration will claim in public and court that it has an “innovative” method of funding special education.
Profiteers: The plan creates a “captive insurance company” to insure the state against future special education costs (e.g. Step 3). The fund would pay salaries and fees to manage the plan. Because captive insurance companies are often misused, the American Bar Association and U.S. Department of the Treasury have raised concerns and the FBI includes “captives” on the “Dirty Dozen” tax scam list.
Charter school entrepreneurs: One of the barriers to a school voucher system, supported by charter lobbyists, is that public districts must pay for all students, including those with disabilities. Per-pupil vouchers do not cover all costs.
With local and state funds, public-school districts pay special education costs for their own districts and at charter schools. This cost-sharing system makes it difficult to implement vouchers or similar plans (e.g. money follows child, weighted student funding, student-based budgeting).
If the state directly funds special education students at public or charter schools as a per-pupil grant or voucher, as proposed, then it will be easier to implement vouchers for the whole system down the road. This is the jackpot for charter school entrepreneurs.
It’s one thing to gamble with your own coins in a slot machine, but it’s another to risk public dollars intended for children’s special education services.
What if the state decides to keep all or part of the withheld funds and interest?
What if a state-appointed manager were pressured to underfund the account in lean budget years?
This big gamble could become a full-blown Ponzi scheme.
As the old saying goes, “the best throw of the dice is to throw them away.” Connecticut must throw this plan away and do better for special education.
Robert Cotto Jr. is an elected member of the Hartford Board of Education and a lecturer in the Educational Studies program at Trinity College.
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