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NC Legislative Panel Hears Call For Changing How Special Education Students Are Funded

The Joint Legislative Education Oversight Committee (JLEOC) met Wednesday and received recommendations from the Department of Public Instruction (DPI) about revamping the special education funding formula to reflect actual “levels of service” provided to exceptional children rather than continuing with the state’s 13% funding cap.

Sherry Thomas, DPI’s Senior Director in the Office of Exceptional Children, told JLEOC members that this recommendation has been in the works for several years and stems from multiple studies that have delved into the state’s funding of special education services. In her presentation, Thomas told lawmakers the need for changing this funding formula is needed now more than ever, as school districts and charter schools are serving more students with special needs, the costs of those services are escalating, and public schools are no longer able to stretch their state special education dollars as far. Due to shortages of many types of licensed service providers who serve exceptional children – including school psychologists, speech pathologists, occupational therapists, and others – many school districts are being forced to contract with private providers who in same cases are “charging $100 per hour and their total costs are more than double what school districts would pay an employee for those services.”

Thomas said DPI convened a workgroup from August 2015 through 2017 that ultimately recommended a matrix for determining funding based on the level of services needed. That sample matrix, which was shared recently with the JLEOC in DPI’s report on special education funding, indicates that lawmakers should “establish a baseline” for special education funding and then add funds determined by the level of services needed. In addition, Thomas said this transition should ensure funding levels do not drop below those now provided under the state cap.

The DPI workgroup’s 2017 recommendations were reinforced by a study the Friday Institute for Education Innovation at N.C. State University in 2021 and in a study conducted this year by RTI International. Both studies indicate that the sample matrix from 2017 should be updated to reflect current service provider costs and employee salary ranges.

The JLEOC will now determine whether to send this recommendation forward for action by the 2023 General Assembly that convenes in January.

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