How does Ohio finance the education of its highest-need students?

Public education is a brier field of policy issues. Among the thorniest of all is how to educate America’s high-need students—those who are severely disabled, either physically or mentally. Though they make up a small portion of students, the education of high-need students can have widespread impacts.

In order deliver an adequate (if not excellent) education to those students, schools may need to hire instructors with specialized skills and a full-time nurse, or they may need to purchase expensive equipment. For a small school district or a charter school, serving just one high-need student could stress budgets—and crowd out resources that would have been otherwise allocated to general-education students.

Nevertheless, a civil society should provide good educational opportunities for all children, including those with special needs. But this objective presents policymakers with a seemingly intractable problem: How can states and districts provide the necessary resources to educate high-need students without breaking the bank or straining services for general-education students?

A recent brief by Daniela Fairchild and Matt Richmond, my Fordham colleagues, offers sensible solutions to this conundrum. To begin, they define “high-need students” as those who cost at least three times more than a typical general-education student. In Ohio, this definition would cover students who are identified as multi-handicapped, deaf, blind, or autistic or students who have had a traumatic brain injury.

The authors put forth three recommendations for policymakers: (1) Create “cooperatives,” which would serve high-need students from multiple schools, thereby taking advantage of economies of scale; (2) weight funding based on district need—and base those weights on service requirements, not the category of diagnosis; and (3) create an exceptional-cost fund, which would serve as insurance in case a district (especially a small one) finds itself educating a student with especially high-cost needs.

Broadly speaking, Ohio has put into effect the report’s three recommendations in some form or fashion—though, the state still has room to improve across all three.

Cooperatives

Ohio has regional Educational Service Centers (ESCs)—nonprofit but publicly funded entities—that may directly provide special-education services. (The state’s fifty-six ESCs are each comprised of member school districts based on geographic boundaries.) According to the Ohio Department of Education, fifty ESCs reported that, together, they enrolled 4,227 students with IEPs in 2012–13. Still, this represents just a trivial fraction (1.6 percent) of the Buckeye State’s 263,000 students in that category, so a robust role for ESCs in special education remains fairly distant. Could Ohio’s ESCs take on a leadership role in educating high-need students? Possibly. For more on this topic, see our Applying Systems Thinking report from 2012.

Weighted funding based on actual service need

Ohio has a weighted funding system for special education, but the weights are based on a student's category of special need (e.g., whether this student has autism, blindness, ADHD, etc.). From 2000 to 2013, the state used a six-category multiplier system to calculate the additional per-pupil foundation aid for special-need students. The categories are based on the diagnosis of the student (and the estimated cost of servicing a child with those challenges), with the category multipliers ranging from 0.29 to 4.73 in the FY 2012–13 budget cycle. Starting in FY 2014, however, the state has dispensed with the category weights, and it will now assign an incremental per-pupil dollar amount for each of the six disability categories (from $1,503 to $24,407). The upshot: Ohio deserves credit for its longstanding weighted SPED funding model, but it could refine it further by estimating costs based on a student’s actual service needs rather than through their diagnosis, particularly for students in categories 5 and 6—those with the most severe (and expensive) disabilities.

Exceptional-cost fund

The Buckeye State’s FY 2014–15 budget bill earmarked $40 million per year for the state’s catastrophic-cost program, a four-fold increase over the $10 million per year from the last biennium (FY 2012–13). The catastrophic-cost earmark allows a district to seek a reimbursement when its costs exceed a threshold amount for the year. This earmark is a major investment in high-need students, though the $40 million still falls short of Governor Kasich’s budget proposal, which would have created $115 million per year exceptional-cost fund, wherein districts pool their special-education funds. With the new budget bill in place, Ohio has become a national leader in creating a well-funded rainy-day program. Could it do more? Perhaps, and moving towards a pooled-risk approach (akin to Kasich’s proposal) is one area for improvement.

It is clear that our highest-need students require greater supports than the general population. And this investment isn't merely altruistic: With the right education, many of these students have the potential to become contributing members of both society and our economy. But the provision of these higher needs must be balanced with other budgetary priorities. Meeting these twin objectives calls for creative policymaking—and this report offers three solid policy solutions. While the state has inched towards cooperatives and has done well to implement a weighted funding and an exceptional-cost fund, the Buckeye State can still push further in all three areas.

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