Fiscal Note & Local Impact Statement
127 th General Assembly of Ohio
STATE FUND |
FY 2008 |
FY 2009 |
FUTURE YEARS |
General Revenue Fund |
|||
Revenues |
- 0 - |
- 0 - |
|
Expenditures |
- 0 - |
Increase in administrative
costs for ODE |
Increase in administrative
|
- 0 - |
- 0 - |
Potential increase in
state aid for primary and secondary education |
Note: The state
fiscal year is July 1 through June 30.
For example, FY 2007 is July 1, 2006 – June 30, 2007.
·
The
Ohio Department of Education (ODE) is required to establish rules for the
Special Education Scholarship Pilot Program that are effective by January 31,
2009. The scholarship program begins in
FY 2010 and ends in FY 2015. ODE
is also required to administer the scholarship program. This administration includes registering
private providers, reviewing and approving scholarship applications, and making
scholarship payments. These duties will
increase the administrative burden of the agency.
·
ODE
is required to conduct a formative evaluation of the scholarship program that
includes both quantitative and qualitative analyses. ODE is also required to develop and maintain a document comparing
a parent's and child's rights if the child remains enrolled in their school
district with their rights if the child accepts a scholarship. These requirements will also increase ODE's
administrative costs.
·
If
the scholarship program attracts students who are not currently in the state's
public education system, state aid may increase.
·
State
aid may increase since kindergarten students receiving a scholarship will count
as a full-time student in the resident districts' average daily memberships
(ADM) whereas currently, kindergarten students generally are counted as a
half-time student.
LOCAL
GOVERNMENT |
FY 2008 |
FY 2009 |
FUTURE YEARS |
|
School Districts |
||||
Revenues |
- 0 - |
- 0 - |
Decrease in state aid of
approximately $7,500 to $20,000 per scholarship student |
|
Expenditures |
- 0 - |
- 0 - |
Decrease for each
scholarship student equal to the cost of educating that student |
|
Note: The school district fiscal year is July 1 through June 30.
·
Scholarships
may range from approximately $7,500 to $20,000 in FY 2010, depending on the
student's disability and the fees charged by the alternative provider. The scholarship amount is capped at $20,000
each year, but the lower end of the range will increase in future years as the
base cost per pupil increases, until the program ends in FY 2015. School districts will have the scholarship
amount deducted from their state aid for each resident student who obtains a
scholarship. A portion of this amount
may consist of the district's local share of the additional special education
weighted costs calculated for the student.
·
Districts
may be able to realize a decrease in expenditures since they will not be
required to provide special education and related services to scholarship
students.
|
The bill creates the Special
Education Scholarship Pilot Program, which provides scholarships to special
education students whose parent chooses to enroll the student in an approved
public or private special education program other than the one offered by the
student's school district. The pilot
program runs from FY 2010 to FY 2015 and the number of scholarships
awarded in each year is capped at 3% of the number of children with
disabilities in the previous year. If
the program had been active in FY 2008, the number of scholarships would have
been capped at a little over 8,000.
The scholarships are funded
by counting the scholarship students in the average daily membership (ADM) of
the resident school district in order to calculate the district's state aid,
and then deducting the amount of the scholarship from the state aid sent to the
district. The bill specifies that the
amount of each scholarship is the lesser of:
(1)
the
total fees charged by the alternative provider;
(2)
the
amount calculated for the student by the school funding formula for total base
cost and special education weighted funding; or
(3)
$20,000.
Formula funding for special education
students
Through the school funding
formula, each special education student in a
district's ADM generates the base cost per pupil (which is made up of the base
cost formula amount and the base cost funding supplements) and the special
education weighted cost applicable to the student's disability. In FY 2009, the base cost formula amount is
$5,732 per pupil and the base cost funding supplements total approximately $51
per pupil for a total base cost per pupil of $5,783. In order to calculate special education weighted costs, the
formula recognizes six categories of special education students, each with its
own weight. These weights are
multiplied by the base cost formula amount and by the phase-in percentage (90%
in FY 2009) to obtain the additional weighted cost of a student in each
category. The table below shows the
total of the base cost and the additional weighted cost per ADM for each
special education category in FY 2009.
Base
Cost and Special Education Weighted Cost per ADM by Special Education
Category |
||||
Category |
Base
Cost per ADM |
Weight |
Additional
Weighted Cost per ADM with 90% Phase-in |
Total
of Base Cost and Additional Weighted Cost per ADM |
1. Speech only |
$5,783 |
0.2892 |
$1,492 |
$7,275 |
2.
Specific learning disabled, developmentally handicapped, other health
– minor |
$5,783 |
0.3691 |
$1,904 |
$7,687 |
3.
Hearing impaired, vision impaired, severe behavior handicapped |
$5,783 |
1.7695 |
$9,128 |
$14,911 |
4.
Orthopedically handicapped, other health – major |
$5,783 |
2.3646 |
$12,198 |
$17,981 |
5.
Multihandicapped |
$5,783 |
3.1129 |
$16,059 |
$21,842 |
6.
Autistic, traumatic brain injury, both vision and hearing disabled |
$5,783 |
4.7342 |
$24,423 |
$30,206 |
Effect on school
districts
In general, by counting the
scholarship student in the resident district's ADM, the resident district's
state aid will increase by the base cost per pupil plus a percentage of the
additional special education weighted cost.[1] The base cost portion of the scholarship, therefore,
is funded generally by the state, whereas the additional weighted cost of the
scholarship is funded by both state and local dollars. The percentage of the weighted cost paid
with state funds is equal to the percentage of the base cost paid for by the state
for each district, referred to as the district's "state share
percentage." State share
percentages range from more than 80% in some low wealth districts to 0% in some
very high wealth districts.
For an average wealth district the state share percentage
is approximately 50%. For this average
wealth district, therefore, an additional special education student would
increase the district's special education weighted cost by the student's weight
multiplied by the base cost formula amount per pupil. State special education weighted cost funding, however, would
only increase by 50% of this amount. If
this student receives a scholarship, the base cost and the entire weighted cost
up to the lesser of the fees charged by the alternative provider or $20,000 is
transferred to the parent. For example,
if a hearing impaired student who is a resident of this average wealth district
receives a scholarship, the student will generate $5,783 in state base cost
funding and $4,564 ($9,128 x 50%) in state special education weighted cost
funding, or a total of $10,347 in state aid for the school district. In this case, the amount deducted for the
scholarship could be as much as $14,911, depending on the alternative
provider's fees, so the district may experience a net loss in state aid of up
to $4,564 ($14,911 - $10,347), which must be made up for with the resident
district's local funding.
On the other hand, some districts may be credited
with more state aid through the formula than the amount that is deducted for
the scholarship. For example, suppose a
district with a state share percentage of 75% had a student with a traumatic
brain injury accept a scholarship. The
student will generate $5,783 in state base cost funding and $18,317 ($24,423 x
75%) in state special education weighted cost funding, or a total of $24,100 in
state aid for the school district. In
this case, the amount deducted for the scholarship could be as much as $20,000
depending on the alternative provider's fees, so the district experiences a net
gain in state aid of at least $4,100 ($24,100 - $20,000).
Districts will be responsible for developing each
scholarship student's individualized education program (IEP), but districts may
be able to realize a decrease in expenditures since they will not be required
to provide special education and related services to scholarship students. For students with severe disabilities,
savings on related services may be immediate.
Some savings, however, will be more difficult to realize if the
scholarship students are spread out over different schools and different grade
levels, as a reduction of one or two students (especially high-incident,
low-cost students) in a class may not decrease the costs of that class
significantly. In addition, the
scholarship program may attract students who are eligible to attend school in
the district, but who are currently attending an alternative program using
private funds. As the district is not
currently educating these students, they do not currently receive any state aid
for them. However, the district may
lose its local share of the weighted cost while not realizing any savings if
the students receive scholarships.
State administrative costs
The bill requires that ODE conduct a formative evaluation
of the pilot program and report its findings to the General Assembly. The bill specifies that the evaluation
include quantitative and qualitative analyses.
ODE is also required to develop and maintain a document comparing a
parent's and child's rights if the child remains enrolled in their school
district with their rights if the child accepts a scholarship.
In addition, the bill requires the State Board of
Education to adopt rules including application procedures and deadlines and
standards and procedures for the registration of private providers of special
education programs. The Superintendent
of Public Instruction and ODE are also responsible for registering private
providers, reviewing and approving scholarship applications, and making
scholarship payments. These requirements
will increase the administrative burden of ODE. As an example of the potential administrative costs of the
program, Am. Sub. H.B. 119 of the 127th General Assembly as passed by the
General Assembly established a similar pilot program beginning in FY 2009
and appropriated $50,000 in FY 2008 and $250,000 in FY 2009 for the
evaluation and administrative costs.
These provisions were vetoed by the Governor.
Potential
increase in state aid
As mentioned previously, the scholarship program may
attract students who are currently attending an alternative program using
private funds. As these students are
not currently in the state's public education system, they do not currently
receive any state aid. State aid will
generally increase by the base cost per pupil and the state share of the
additional special education weighted costs for each of these students. In addition, scholarship students in
kindergarten are counted as a full-time student in the resident district's ADM,
whereas district kindergarten students are generally counted as a half-time
student to reflect the traditional half-day kindergarten program. Counting these students as full-time
students may also increase state aid.
LSC fiscal staff: Andrew Plagenz, Budget Analyst
[1] A district that receives
transitional aid may not receive an increase in state aid when its ADM
increases. Such a district already is
receiving more state aid than the formula would otherwise allocate based on its
current ADM. A district that is so
wealthy that its local share covers the base cost amount for its current ADM so
that its state share percentage is 0% may also not receive an increase in state
aid when its ADM increases.