State Explores Linking Special-Ed Funding to Community Wealth

State Explores Linking Special-Ed
Funding to Community Wealth

The Commissioner of Education is exploring a special-education funding method that would take into account a district’s ability to pay—a concept that’s termed “wealth equalized funding.”

That was one of the proposals suggested by Commissioner of Education Lucille E. Davy during a meeting on Friday with education stakeholders and advocacy groups. Such meetings are being held as the commissioner works to develop a new school funding formula. Last week’s meeting focused solely on the special-education aspect of a new formula.

Currently, school districts receive state funding for special education as “categorical aid” allotments for each eligible student—without regard to community wealth. The commissioner is broaching the idea of factoring a district’s wealth into the distribution, which would likely result in higher-wealth communities experiencing a reduction in special education aid.

Some of the stakeholders at Friday’s meeting said any move toward wealth-equalized funding should apply to only limited aspects of special-education programming and not across the board.

NJSBA policy supports using wealth as a factor in distributing all aid, except those that are distributed on a categorical basis. Based on this policy, NJSBA would oppose the idea of wealth-based special education aid.

The commissioner said other changes are being explored, such as:

Incentives to bring special-education students back into districts. The federal government has criticized New Jersey for high rates of out-of-district special-education placements.
Altering the current system of four funding tiers for special education students, based on the level of services needed.
Targeting aid to high-cost services.

The governor wants to propose a new school funding formula to the Legislature, and have it in place by next school year.

NJSBA expects to release next month a major study, “Financing Special Education in New Jersey.” The study will address the funding of special education, as well as major cost drivers and local school district placement practices.