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Amicus Declaration of Washington State Special Education Coalition

IN THE SUPERIOR COURT OF THE STATE OF WASHINGTON
IN AND FOR THE COUNTY OF THURSTON

SCHOOL DISTRICTS ALLIANCE FOR ADEQUATE FUNDING OF SPECIAL EDUCATION, et al.,
Plaintiffs,
v.
THE STATE OF WASHINGTON, et al.,
Defendants.

Case No. 04-2-02000-7

AMICUS DECLARATION OF WASHINGTON STATE
SPECIAL EDUCATION COALITION

I. Identity of the Washington State Special Education Coalition
Organizational History. The Washington State Special Education Coalition (WSSEC) was founded in 1977, and is a non-profit, 501 © 3 organization whose members represent statewide organizations and individuals in support of children and youth with disabilities. The Executive Committee forms the working nucleus and is made up entirely of volunteers. The public policy chair and others work without remuneration. The original incorporators of WSSEC were the authors of HB 90, the 1971 Washington State special education law then codified at RCW 28A.13 and now found at RCW 28A.155. That law was used as the basis for the 1973 initial federal mandatory special education law, PL 94-142 (20 USC 1400 et seq).

Funding formula History. That initial legislation at both the state and federal level (before the "ABCD" formula that was the subject of Doran III) included a requirement that special education be funded on an excess cost funding model. Each special education student was to first receive his or her allotment under the basic education formula. Any costs for a particular student that exceeded the basic allocation were to be met with the excess cost allocation.
The "ABCD" formula, which was the second Washington state special education formula, was replaced in 1995 by the current formula which is an excess cost model plus a safety net provision to support students and Districts that have financial needs beyond the typical. The safety net is a critical component of the formula and WSSEC believes that it is a district's right to apply for safety net funds as well as their responsibility to do so if the need is there. District accountability is required in order to receive these additional funds. The district must demonstrate need by showing all basic and excess education revenue was spent. The district must meet the federal requirement for properly formulated IEP's, and the district must show that it is making an effort to operate within the funding formula. These requirements were set out by the decision in Doran III.
II. Basic vs Excess Cost funding
In the landmark 1988 Thurston County Superior Court decision Washington State Special Education Coalition v. State of Washington No, 85-2-00543-8, the Doran III Court determined that special education is basic education for students who qualify. WSSEC was one of the Plaintiff's in that suit. The Court determined that it is incumbent upon school districts to use all available basic education revenue sources as the primary source of funding to provide an appropriate education for special education students. The special education excess funding was to be in addition to the basic education allocation. Excess funding was intended to cover the costs for special education students that exceed their basic education funding. It is the belief of WSSEC that Washington State School Districts are incorrectly accounting for the revenue and expenditures for special education programs and services. Districts systematically ignore the basic education revenues that special education students generate when calculating special education "deficit spending." Accuracy demands that districts account for all available revenue before they deduct expenditures. WSSEC supports the state on this point. Districts must add up ALL revenue for special education students before subtracting special education expenditures.
The special education funding process that districts go through using the regular head count system to receive up to the 12.7% index number is very easy. There is minimal accountability. The current funding system also includes the possibility of safety net funding if a District has a single student that exceeds the Districts ability to meet program requirements with both basic and excess cost funds under the present formula. The state has never exhausted its legislatively established annual safety net budget. Districts are encouraged to "apply early and apply often." With the help of a specific staff person at OSPI, they can receive assistance with their applications. WSSEC has regularly observed the committee at work since its inception. Application for safety net funds is a much more tightly accountable process which WSSEC believes is totally appropriate.
Recently it has been reported in the news that local districts are using local levy dollars to make up shortages in special education. It appears that districts are choosing to code expenditures to levies in place of basic education to help pay for their special education programs. Special education students should not be blamed for district budget actions due to local decisions on how to code and report their expenditures. Both the "BEA" and the "Excess Cost" revenues generated by special education students should be allocated to the special education program. That is the only way in which to fully account for the total revenue.
From 1995 until 2001, when the funding system for special education changed, the WSSEC tracked the special education expenditures that districts reported to the OSPI. During that time we observed a steady decline in the amount of basic education revenue expended by the districts on special education programs as a percentage of all expenditures and on a per capita basis. There was no consistency to their reporting system, though. WSSEC promoted legislation in 2001 that required districts to account for the expenditure of at least some basic education revenues on special education students for at least the time periods when the special education students may be placed out of basic education settings. However this method of accounting still does not track how the rest of the per student basic education funds generated by special education students is spent and is too similar to the old ABCD system.
Serious coding errors often occur. The WSSEC recently found that building administrators and counselors were being incorrectly coded by many districts exclusively to the special education budget. Special education parents in the Olympia School District were told two years ago that the special education budget was seriously overspent and that the district was cutting special education programs as a result. Those parents reviewed the district expenditures and found a million dollar coding error. The district had mistakenly coded the million dollars of expenditures to special education although it was a basic education expenditure.
As noted above, excess cost revenue was and is intended to be in addition to the full and total basic education revenue. The state "backed out" a portion of the Basic Education Allocation (BEA) in the old "ABCD" formula, which was, on average, 45% for special education. It was never the intent then, or now, that only a portion of the basic education revenue generated by each special education student be "allowed" to be used for special education programs. In 1994, school districts expressed great enthusiasm for this new formula, but special education directors expressed serious fear of "arm wrestling" the local Superintendent or Business Manager for the special education portion of the budget. The WSSEC worked very hard on the design of the current formula and supported local districts to be able to make local decisions based on the individual needs of their students and as demonstrated on their students' Individual Education Programs (IEPs). WSSEC also thought the new system was more "neutral" from a civil rights standpoint because it provided the same level of funding for all special education students, thus eliminating any incentive to identify students in one category as opposed to another.
When Bill Freund, former Senate Ways & Means budget analyst was working for the Washington Association of School Administrators, he published a report that is on their website. He states that the total 2002-03 special education revenue was $595.7 million. When contacted by WSSEC he confirmed that this amount did not include BEA funds. The same report states that there were total special education expenditures of $775.9 million, leaving a $180.2 million shortfall. However, if one utilizes the missing basic education allocation that would have been generated by those same students in this computation, the total revenue would have really been approximately $1 billion 37 million (using state averages). That leaves over $262 million unaccounted for.
Similarly the Lake Washington School District claims to have lost $2,134,712 in unfunded special education costs. The district added up all of their special education revenue ($11,855,652) and subtracted it from their special education expenditures ($13,990,364) and came up with a loss of $2,134,712. However, they did not count over $10,801,604 in basic education revenue that was generated by their special education students. So, the total revenue was approximatly $22,657,256, using state averages and assuming a 12% population for that year. That leaves $8,666,892 unaccounted for.
A review of other districts reveals the same type of miscalculation where the failure to add basic education revenues creates the appearance of under funding.
III. Conclusion
The Washington State Legislature has enacted and supported adjustments and positive changes to the current funding system, including the establishment of the safety net. This is due, in part, to WSSEC's participation with the Legislature, with parents and with educators to encourage change to make the special education system more functional. WSSEC was involved in the formulation of the JLARC special study, supported the elimination of line 25 of the safety net application, and the elimination of some of the categories. It is entirely appropriate that the safety net system has evolved to meet changing needs and challenges rather than remaining stagnant.
Judge Doran clearly emphasized and explained the importance of a "properly formulated IEP" as a basis for determining what the appropriate amount of funding should be for these students. He referred a safety net structure but suggested that the District must meet certain standards when requesting the extra funding. He stated, "that the district requesting the funding beyond the funds generated by the formula are in fact operating a reasonably efficient program of education for the handicapped students, that the IEPs are properly prepared and formulated, and the district is otherwise making an effort to provide the program requested within the funds generated by the formula." (pg. 31 of Oral Opinion) WSSEC supports a process that requires a determination by the OSPI Safety Net Committee that District's are "operating a reasonable efficient program". It also supports that Committee's independent determination that the District's IEPâ€™s are "properly prepared and formulated". WSSEC has observed both the assistance given to local districts to fix problems that can be fixed on the spot, and to allow re-application for those that require new IEP meetings in order to meet legal requirements. The local District's desire for flexibility cannot trump the federal IEP requirement or the requirement that the District operate in a responsible manner. District "flexibility" cannot become a euphemism for "when we get around to it" or "if it is available". Each parent and educator has the right to know exactly how much service the child will receive. As an advocacy organization, WSSEC supports strict adherence to IEP requirements and to careful accounting of all revenue.
WSSEC knows that there is not enough basic education money available for all. There is no accurate data, however, to support a change to the current special education funding system. Districts should not blame special education for the under funding of basic education as a whole and should not expect special education funding to meet the requirements of what is a basic education responsibility. Special education students should not be used as objects of pity in order to sell a funding crisis.
If the Court issues any order in this case, we recommend that it require the distribution of both the total basic education and special education revenue into the special education budget before any further effort is made to determine if a funding deficit for special education exists. The information that would be generated in the wake of such an order would lead to the possibility of a more comprehensive evaluation of the true excess cost of special education.

DATED this 20th day of November, 2006.

MARY E. MCKNEW, WSBA No. 22532
President, WSSEC

DUSSAULT LAW GROUP
WILLIAM L.E. DUSSAULT, WSBA No. 04611
Attorneys for the WSSEC