overview of issues w/ trend of out of district placement and impact on local schools budgets

1. Massachusetts
Foundation Budget
Recommendations
EQUITABLE AND ADEQUATE FOR ALL STUDENTS IN ALL DISTRICTS
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2. Situation
 Special education costs are the accelerating cost drivers for many districts - state reimbursement is
insufficient
 There is an increasing gap between foundation budget and actual school spending
 Actual special education costs are an increasing percentage of Chapter 70 funds
 Chapter 70 funds are, in essence, subsidizing special education costs
 This challenge is magnified with flat or low Chapter 70 growth. Districts face:
 A rapid increase in the need for local funding
 A drop in offerings for rest of student body in these schools
◦ A risk of a downward spiral in middle class districts if more regular education students choice out of the system and the
percentage of special education and out of district placements increase
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Our aid has declined while our costs continue to grow

3. Communities with excessive out of district costs
District CEY%
Out of District
Placment as % of
Foundation
Budget FY 07
Out of District
Placment as % of
Foundation
Budget FY 13
FY 07 Out of
District
Placement as
% of CH70
FY 13 Out of
Distric
Placement as %
of CH70
% change in CH 70
% change in out of
district placement
Change in
CH70 dollars
Change in
Placement dollars
SOUTHBOROUGH 129.75% 8.34% 16.86% 35% 76% 2.0% 121.7% $53,209 $1,128,777
NORTON 62.51% 8.79% 16.60% 17% 34% 0.7% 103.6% $84,969 $2,132,345
AMESBURY 61.64% 7.50% 13.21% 17% 34% -0.8% 96.4% ($66,461) $1,412,892
LEICESTER 46.86% 7.34% 12.74% 12% 23% 1.9% 94.3% $177,741 $1,035,174
TEWKSBURY 71.51% 7.13% 12.01% 20% 34% -0.3% 69.7% ($41,773) $1,739,251
SHREWSBURY 74.56% 7.41% 11.74% 20% 34% 17.9% 97.4% $2,849,514 $3,102,970
FRANKLIN 57.43% 7.22% 10.30% 14% 22% 6.3% 68.5% $1,616,799 $2,391,593
DEDHAM 111.69% 12.80% 17.93% 80% 121% 10.4% 67.6% $366,593 $1,904,913
WEBSTER 50.06% 7.98% 11.10% 16% 22% 21.3% 67.5% $1,742,604 $885,042
MASHPEE 129.33% 7.95% 10.63% 30% 42% 3.1% 45.0% $126,607 $554,033
LONGMEADOW 86.43% 11.05% 14.60% 66% 88% 8.2% 43.2% $318,496 $1,116,135
SUDBURY 104.53% 7.99% 10.52% 48% 61% 17.6% 48.3% $648,226 $858,795
While our most expensive students increased, our actual state aid went down.
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4. The Foundation Budget formula assumes 2.75% of the Foundation Budget
will go to out of district special education costs
 This 2.75% grossly underestimates the actual costs
 out of district Special Ed does not happen consistently across districts.
 out of district costs have grown across many districts
For example Amesbury: FY 13
 $ 620,355 - out of district in budget per Foundation Budget formula
 $ 2,878,513 – real out of district costs - what Amesbury paid
 $237,968.18 – actual reimbursement per formula
 $1,104,197.59 – reimbursement if Foundation Budget reflected actual costs
 $866,229.41 – underfunded gap placed on district!
 Circuit breaker covers some of this gap but not nearly enough.
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Actual out of district costs as a % of Foundation
Budget 2007 - 7.5%
Foundation Budget estimate for out of
district 2.75% of foundation budget (before
Circuit Breaker)
Out of district costs as % of Foundation Budget
2013 - 13.2%
Foundation Budget continues to calculate
out of district at 2.75% of Foundation
budget
Click to add text
The formula does not meet the needs of districts with many high needs students.

5. How does our out of district as % of foundation budget
compare to other local districts
In smaller districts a few additional students going
out of district usually means the loss of
programming for the rest of the district
 this increasing local burden creates potential
tension between special education and the rest of
the town population.
Costs are going up but availability and
range of academic offerings is decreasing in
many districts
More regular education students leaving
would exacerbate the problem
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Compared to neighboring and like communities, Amesbury is facing a heavier burden on the local tax base.
Fiscal year
Out of District $ as % of foundation budget

6. Example(s) of Consequences:
Amesbury FY 2014
- Foundation Budget estimates = 620k - Actual Out of District costs = 2.8 million
Amesbury CH70 aid based on 620k number = 238k
- If the Foundation Budget used actuals, Amesbury would receive aid based on the costs at 2.8 million equaling 1.1 million dollars
Out of district costs as a % of Foundation Budget 2007 7.5%
Out of district costs as % of Foundation Budget 2013 13.2%
Operating Budget increase from 2007 to 2013 25%
Foundation Budget increase from 2007 to 2013 11%
Out of district Special Ed cost increase 2007 to 2013% 96%
% Difference between Foundation Budget and Actual Operating Budget
2007 = 22% 2013 = 37%
Out of district costs are rising faster than Foundation Budget funding and are a
key driving the growth of the operating budget
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With shrinking state funds, the schools have had to find ways to compensate.

7. Amesbury Middle School, for example, has lost :
• 1 tech ed. teacher
• 2 life skills teachers
• 1 computer teacher
• 1 music teacher
• 2 Spanish teachers grades 6-8 with 8th grade counting as a CORE academic
• An ISS (in-school suspension) teacher
• Math lab where a teacher did math remediation
• A copy room secretary
• Lunch monitors - principal and assistant principals now spend 2 hours doing lunch duty
• A late bus so that students could stay after for clubs and extra help
• Admin secretarial position
Staff and programming losses while the Operating Budget increased and
Foundation Budget remained steady
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The cuts to AMS are just one building. All schools have suffered similar layoffs and cuts to programming.

8. What if Foundation Budget actually accounted for Special
Education students and costs?
1%
Amesbury school
enrollment 2348
Actual Out of district
students 39 1.66%
Out of District Tuition $2,484,518 cost
Special Ed Per Pupil
budget $23,351
State Out of District
Funding (Per Formula_ $548,281 revenue
out of district SPED
funding per formula 23
out of district not
counted per census
formula 16
how are these 16
funded - what is
rate.. Let's
assume funded at
regular ed rate
Out of district not
counted per census
formula foundation
budget $108,640 revenue 7000
transaportation $217,500 cost
admin share cost
circuit breaker
reimbursements revenue
Gap $2,045,097
Gap per Pupil $52,438.38
• State assumes 1% of district enrollment will be out of district
• Actual out of district for Amesbury 1.66%
- 16 out of district students are not counted in the CH70 formula
• State reimburses for out of district at $23.500 a student in the
formula
• Actual out of district costs average $63,705.60 per student
• Total out of district tuition = $ 2.5 million
• CH 70 Aid = $ 548k
We have a $2 million gap the state is not funding up
front
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9. Recommendation
Option 1 - provide supplemental funding for districts where:
• The change in CH70 dollars for the last 5 years have been below the average growth for all districts
(approx. 24% in the 6 year sample I'm looking at which excludes big cities, regional and vocational
schools)
• Have seen increases in out of district Special Education as a % of higher than the average increase (
spending increases greater than 22% over 6 year period that I looked at)
• This would provide necessary aid to approximately 57 districts
Option 2 - look more closely at districts not receive equitable or adequate funding
◦ Add in additional criteria that out of district as a % of foundation budget is more than 10% of
foundation budget
◦ This would capture about 12 districts (slide 3)
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