House Education Committee Hearing on HB 704 - Wednesday, May 6

Pennsylvania Legislative Services has a recap of yesterday’s Education Committee Hearing.

COMMITTEE NEWS
House Education Committee
9:00 a.m., 5/6/09, Room G-50 Irvis Office Building
By Matt Hess
The committee held a public hearing on HB 704.
HB 704 Sturla – (PN 1651) Amends Public School Code, in reimbursement by Commonwealth and between school districts, further providing for definitions; and outlining a funding formula for special education for student achievement and instruction of eligible students in regular classrooms; and providing for special education accountability to Commonwealth taxpayers. The Department of Education shall submit a report to the Governor and General Assembly recommending increased standards and the General Assembly shall consider legislation revising the criteria, in any year in which 75% of all school districts meet the criteria and qualify for the 1.15 factor for funding. The Department of Education shall determine the form and manner in which school districts shall submit a special education plan and revisions, updates and amendments to the special education plan.

Members in attendance included: Chairman James Roebuck (D-Philadelphia), Minority Chairman Paul Clymer (R-Bucks), Rep. Scott Conklin (D-Chester), Rep. Lawrence Curry (D-Montgomery), Rep. Pat Harkins (D-Erie), Rep. Rich Grucela (D-Northampton), Rep. Mark Longietti (D-Mercer), Rep. Barbara McIlvaine Smith (D-Chester), Rep. Ken Smith (D-Allegheny), Rep. Jake Wheatley (D-Allegheny), Rep. John Yudichak (D-Luzerne), Rep. Mike Fleck (R-Huntingdon), Rep. Daryl Metcalfe (R-Butler), Rep. Duane Milne (R-Chester) Rep. Bernie O’Neill (R-Bucks), Rep. Tom Quigley (R-Montgomery), Rep. Kathy Rapp (R-Warren), Rep. Mike Reese (R-Westmoreland), and Rep. Will Tallman (R-York).

Rep. Mike Sturla (D-Lancaster) provided the members with a historical overview of special education funding and highlighted the need for the new formula contained in House Bill 704. He explained that when he joined the legislature eighteen years ago, special education was funded through an “excess cost” system, in which schools were reimbursed for excess special education costs. He said this system was the fastest growing line item in the budget and was heavily abused. Consequently, Rep. Sturla explained, the General Assembly developed a formula to fund special education which was based on the fact that 16% of all students are special needs students. He said this formula did not work because all schools were funded based on 16%, even though some schools had special needs populations well above 16% and others did not reach this percentage. He said that overtime this formula has grown more and more unfair. As a result, he has introduced HB 704, which contains a special education funding formula that is based on the actual cost to educate special needs students. The cost was determined in a costing out study last year.

The formula would distribute funding to schools based on the actual cost of educating special needs students and the actual number of special needs students at that school, Rep. Sturla concluded.

The committee then heard from a panel which included Roy Galloway, Children’s Policy Coordinator/Staff Attorney, Disability Right Network of Pennsylvania; Baruch Kintisch, Director of Policy Advocacy, Education Law Center; Dr. Thomas Neuville, Associate Professor, Special Education Department, Millersville University; Kenneth Oakes, Adjunct Professor, Special Education, Arcadia University, Chair, Education and Early Childhood Committee, The Arc of Pennsylvania; Dr. Sheri Smith, Superintendent, Lower Dauphin School District; and Sandra Zelno; School Reform Associate, Education Law Center.

Kintisch argued that it is the right time to fix the state’s special education funding system. He stated “if we do not fix the system, the upward pressures on local property taxes will continue” and added “federal stimulus dollars for special education make it possible to implement changes to the state formula without incurring excessive obligations.”
Oakes gave an overview of special education in Pennsylvania and described the excess cost system, which was in place prior to 1991, and outlined the switch to the “census system.” He also described the system used in the 2008-2009 school year, which is broken down into three parts: Base Supplement, Inflation Index Supplement and Minimum Increase.
Galloway affirmed “money matters to the quality of special education that a school district can afford to provide” and indicated that student outcomes in wealthy districts are much better than in the poorest districts. He said that Pennsylvania’s state share of funding for special education is “low” and that “puts pressure on local property taxes in many communities.” Galloway said, “HB 704 will increase funding for special education by 24 percent in gradual increments over at least six years…that’s about half of the total funding gap, with local districts also picking up their share.”

Neuville discussed why special education costs more than basic education. He said “costs have increased over the years as science has progressed, identification and treatment have improved, and shortages of trained professionals have deployed.” He indicated that special education enrollment has increased by more than 25,000 students since 2002 and there are nearly 280,000 special education students in Pennsylvania. He also argued that the lack of special education resources forces schools to “spread insufficient resources across all programs.” Neuville said, “Under-funding special education diminishes the quality of programs for all students while marginalizing students with disabilities…such deficiencies need to be addressed by the state.”

Oakes indicated that in 2008 Augenblick, Palaich and Associates Inc., updated it’s 2007 costing out study to further evaluate the cost of providing special education in Pennsylvania. The findings concluded the following:
• 391 school districts have a potential shortfall in annual spending for special education. 110 districts do not have a shortfall.
• Statewide, the total gap in annual funding for special education is $380 million. The average per pupil shortfall is $1,947, based on a total of 194,862 students in districts with a funding gap.
• Eliminating the spending shortfall for special education in Pennsylvania would greatly increase the ability of districts to meet the basic needs of students with disabilities.

Zelno affirmed that HB 704 is a good solution to funding problems for special education. She said the bill “counts real students” and “fairly divides costs between the state and local districts.” Zelno added that the legislation also provides “improved accountability for special education expenditure.”
Dr. Smith said that added resources could provide the following: personnel; professional development and training; assistive technology devices, services and materials; and specialized programs.

Kintisch concluded “HB 704 provides an excellent opportunity to adopt a new formula and strengthen the accountability system.”
Minority Chairman Clymer questioned if the panel had information on states that have adopted a similar formula. A researcher from the Education Law Center said that he examined special education funding in other states and discovered several “themes”. He said that funding in many states stress “accuracy and simplicity” and indicated that Pennsylvania’s is “simple but the count is inaccurate.” He noted that New York and Maryland use a “single weighted system” and South Carolina and Texas measure the exact number of services each individual student needs. He affirmed that no state has the level of accountability that HB 704 would provide.

Minority Chairman Clymer asked what states have implemented funding formulas. Kintisch said that many states have two funding formulas, one for basic education and one for special education. He indicated that HB 704 would allow it to either “stand alone or merge.”

Rep. McIlvaine Smith questioned how Pennsylvania is doing in academic terms right now in special education. Dr. Smith said that inclusion practices are being implemented throughout the state and there have but improvements, but he warned “we still have a long way to go.” Rep. McIlvaine Smith questioned how the bill will affect student outcomes. Dr. Smith said the legislation would provide resources and reiterated that funds are currently “spread too thin.” Kintisch said that under-funding “severely” affects special needs students. He stated HB 704 would provide the necessary resources to provide federally required inclusion practices and indicated that research shows that all students are able to do better when it is implemented correctly. He also said the bill would provide an accountability system that would give the General Assembly more oversight on the special education.

Rep. McIlvaine Smith inquired about the level of funding predictability the legislation would provide. Oakes said that the majority of special education students have a “mild disability” which often involves a reading disability. He said that reading specialists are often the first to be cut and additional funding would put “a core program back in place.”

Rep. Rapp said the Special Education Subcommittee held a hearing last year and she asked an administrator from Maryland if it’s funding formula improved students outcomes, and her response was that it did not. She questioned how changing formulas would produce better student outcomes. Dr. Neuville affirmed that inclusion produces improved “life outcomes.” Rep. Rapp expressed concern about the bill, she said the child’s placement “should be driven by the IEP team and not the state” and said the bill would give school districts money based on how many students are included in the classroom. She stated that there is special education monitoring and a requirement that school districts must submit a three year plan to the Department of Education. She said that the Department also has the power to have a superintendent removed for balking at inclusion practices. Kintisch agreed that there are penalties in place but the Department is hesitant to enforce them because the state provides a low level of funding and they know that the districts do not have the resources in place to implement the plans. He reiterated that the bill is “workable” and “district friendly.”

Rep. Longietti called the bill a “laudable approach” to special education funding but said he noticed disparities in the level of funding the school districts will receive. He asked “why the disparities?” Kintisch said that HB 704 is “not just asking for more money…it improves the delivery of special education.” He stated that the formula actually counts how many special education students are in each district. Rep. Longietti said he noticed that Philadelphia has 13.2 percent of its students classified as special education and questioned if there is concern about undercounting kids. Dr. Smith said that many districts adopted a “support and intervention model” which focuses on helping students improve academically as opposed to “identifying.” Kintisch said that many school districts were “forced to cut corners” and did not identify some students because they don’t have the resources to provide an appropriate education.

Rep. Youngblood stated “Philadelphia is severely undercounting special education students” and said “children are just skating through the system.” She indicated that there are many cases where a student is illiterate and still receives a high school diploma and reiterated that many students are “never identified.”

Jane Carroll, Senior Fellow, The Education Policy and Leadership Center on behalf of the Pennsylvania School Funding Campaign, expressed support for the proposal but did want the Legislature to consider the following:
• Finances: “Nothing that the General Assembly considers concerning HB 704 should be allowed to detract from the need to fully fund with $418 million the second year of the basic education formula and maintain support for all other basic education line-items.”
• Single Formula: “While it may be expedient to use the approach of HB 704 for the time being, it is most important that basic education and special education be addressed in language and principle that will easily be combined at some future date.”
• Statute vs. Regulation: “Some members are concerned that including all of these provisions in statute will make them more vulnerable to future alterations through a legislative process that at times is less transparent and scrutinizing than the length regulatory process.”
• Gifted Students: “Currently, gifted students fall into a crack, unaddressed by both the existing basic education and the proposed special education formulas.”

Andrew Faust Esq. from Sweet, Stevens, Katz and Williams, LLP. prepared testimony for the Pennsylvania School Board Association and Lisa Landis Government Relations Specialists, PSBA presented it to the committee. The PSBA supports the six-year phase in of the special education but took issue with the “aggressive new accountability standards” and penalties that the bill provides. “HB 704 diverts from federal law by asserting a standard of inclusiveness that may not be aligned with current federal language,” she read. The PSBA also is concerned about a “permitting the withholding of up to five percent of all Federal IDEA funding for causes not recognized under the IDEA itself for withholding IDEA sub-grant dollars.”

Janis Risch, Executive Director, Good Schools Pennsylvania, expressed support for the bill. She said currently “Pennsylvania continues to drive out special education funding based on erroneous assumptions about school districts.” Risch affirmed “without fixing how we fund special education, the new school funding formula will retain a dangerous flaw that threatens to undermine the good that we are doing to support students, strengthen schools, reduce pressure on local property taxes, and revitalize communities.”

Chairman Roebuck questioned what the relationship is between special education and gifted education students. Carroll indicated that Pennsylvania was one of the first states to include gifted students under special education and made a school code change. She said since that time the relationship has been “fuzzy.”

Rep. Longietti inquired what the Governor’s position is on the bill. Rep. Sturla said that the Administration is proposing a zero percent increase in this year’s budget. He believes that the stimulus money could be applied to the proposed formula with $32 million the first year and the rest in year two. He also downplayed member concerns about a “cliff” the stimulus money would create in year three.