Overview of Special Education in California

Overview of Special Education in California GABRIEL PETEK LEGISLATIVE ANALYST NOVEMBER 6, 2019 analysis full gutter AN LAO REPORT LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT Executive Summary Report Provides Overview of Special Education Services for Students With Disabilities. Since the 1970s, federal law has required public elementary and secondary schools to provide special education services to students with disabilities. Parents or teachers typically are the first ones to identify if a student might benefit from special education services. In most cases, children are then referred to school district specialists, who evaluate whether the student has a disability that interferes with his or her ability to learn. If determined to have one or more such disabilities, the student receives an individualized education program (IEP) that sets forth the additional services the school will provide. The IEP is developed by a team consisting of each student’s parents, teachers, and district administrators. The IEP may include various types of special education services, such as specialized academic instruction, speech therapy, physical therapy, counseling, or behavioral intervention. About One in Eight California Students Receives Special Education Services. In 2017-18, 12.5 percent of California public school students received special education—an increase from 10.8 percent in the early 2000s. Compared to other California students, students with disabilities are disproportionately low income. They also are disproportionately African American, with African American students representing 6 percent of the overall student population but 9 percent of students with disabilities. The majority of students with disabilities have relatively mild conditions such as speech impairments and specific learning disorders (such as dyslexia). The number of students with relatively severe disabilities, however, has been increasing— doubling since 2000-01. The most notable rise is in autism, which affected 1 in 600 students in 1997-98 compared to 1 in 50 students in 2017-18. Majority of Students With Disabilities Served in Mainstream Classrooms. Federal law generally requires districts to serve students with disabilities in the least restrictive setting, and the majority of students with disabilities are taught alongside students without disabilities in mainstream classrooms. These students may receive special education services within the mainstream classrooms (for example, having an aide or interpreter) or in separate pull-out sessions. About 20 percent of students with disabilities are taught primarily in special day classrooms alongside other students with disabilities. Typically, special day classes serve students with relatively severe disabilities and provide more opportunities for one-on-one attention or specialized instruction, such as instruction in sign language. Another 20 percent of students with disabilities split their time between mainstream and special day classrooms. About 3 percent of students with disabilities are educated in separate schools exclusively serving students with disabilities. Students With Disabilities Have Lower Academic Outcomes Than Other Students. As the figure shows (see next page), students with disabilities’ average test score on state reading and math assessments was at the 18th percentile of all test takers in 2017-18—notably below that of low-income students and English learners. Students with disabilities also have a lower four-year graduation rate than other student groups; a suspension rate that is almost double the statewide average; and a relatively high rate of chronic absenteeism, with almost one in five students with disabilities missing 10 percent or more of the school year. www.lao.ca.gov 1 analysis full gutter AN LAO REPORT Students With Disabilities Have Low Standardized Test Results Average Percentile on State Tests, 2017 Student’s parent has a graduate degree 76th Student’s family is not low income 64th Student’s family is low income 35th Student’s parent did not complete high school 32nd Student is an English learner 23rd Student has a disability 18th Special Education Funding and Services Typically Are Coordinated Regionally. The state requires school districts to form Special Education Local Plan Areas (SELPAs). Each SELPA is tasked with developing a plan for delivering special education services within that area. Small and mid-sized districts form regional SELPAs to coordinate their special education services. Large districts may serve as their own SELPAs. Charter schools are allowed to join charter-only SELPAs, which, unlike regional SELPAs, may accept members from any part of the state. As of 2017-18, California has 132 SELPAs—consisting of 81 regional SELPAs, 45 single-district SELPAs, 5 charter-only SELPAs, and 1 unique SELPA serving students in Los Angeles County court schools. Excess Cost Associated With Special Education Is Supported by Three Fund Sources. The average annual cost of educating a student with disabilities ($26,000) is almost triple that of a student without disabilities ($9,000). The excess cost associated with providing special education services is supported by state categorical funding, federal categorical funding, and local unrestricted funding. With the exception of a few small categorical programs (such as funding for infant/toddler services and job placement and training for older students), most state and federal special education funding is provided to SELPAs rather than directly to school districts. The largest state categorical program is known as AB 602 after its authorizing legislation. AB 602 provides SELPAs funding based on their overall student attendance, regardless of how many students receive special education or what kinds of services those students receive. Typically, SELPAs reserve some funding for regionalized services and distribute the rest to member districts. School districts use local unrestricted funding (primarily from the Local Control Funding Formula) to support any costs not covered by state and federal categorical funding. Special Education Costs Have Increased Notably in Recent Years. Between 2007-08 and 2017-18, inflation-adjusted special education expenditures increased from $10.8 billion to $13 billion (28 percent). Both state and federal funding decreased in inflation-adjusted terms over this period, primarily as a result of declining overall student attendance. Consequently, local unrestricted funding has been covering an increasing share of special education expenditures (49 percent in 2007-08 compared to 61 percent in 2017-18). We estimate that about one-third of recent increases in special education expenditures are due to general increases in staff salaries and pension costs affecting most school districts. We estimate that the remaining two-thirds of recent cost increases are due to a rise in an incidence of students with relatively severe disabilities (particularly autism), which require more expensive and intensive supports. 2 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT INTRODUCTION Over the past decade, the share of students directed the Legislature and administration to work identified with disabilities affecting their education collaboratively over the coming months to consider has increased notably. Over the same period, changes in these areas, with the overarching intent inflation-adjusted per-student special education to improve special education outcomes. expenditures also have increased notably. Today, In this report, we aim to inform these fiscal and nearly 800,000 students in California receive policy conversations by providing an overview special education services at a statewide annual of special education in California. We begin by cost of $13 billion. Despite this spending, state describing major special education requirements, accountability data show that school districts then present the latest data on students served, have poor outcomes for their students with outcomes achieved, and dollars spent. We disabilities. These trends have motivated many conclude by describing oversight activities and district- and state-level groups to take a closer dispute resolution. Throughout the report, we refer look at how California organizes, delivers, and to several of our other products that delve into funds special education. Recent legislation greater detail on specific special education topics. SPECIAL EDUCATION LAW In this section, we identify major federal and Districts Evaluate Whether Students Have state requirements for serving students with Disabilities Requiring Special Education. Federal disabilities. law charges school districts with making proactive efforts to identify all children with disabilities in their Major Federal Requirements service areas (a responsibility commonly known as Federal Courts Ruled Public Schools Must “child find”). In practice, many children are referred Educate All Students, Regardless of Disability. for special education by their parents, perhaps in Prior to the 1970s, public schools did not serve response to districts’ public awareness campaigns. some children with severe cognitive or physical In most other cases, children are referred by disabilities. Even those schools serving children teachers or other school officials (Figure 2, see with severe disabilities sometimes offered only page 5). After a child is referred, specialists basic daycare services with little or no educational conduct a formal evaluation to determine whether benefit. Starting in the early 1970s, federal (1) the child has a disability and (2) the disability courts declared all children have a right to public interferes with the child’s ability to learn. Children education regardless of disability. that meet both of these requirements qualify for special education. In addition to special education Federal Law Establishes Formal Special services, federal law requires certain other services Education Process. Federal lawmakers responded be provided to children with disabilities, as to these court rulings by establishing a process for explained in the box on page 6. identifying and serving children with disabilities. Enacted in 1975, the federal law now known as the Students’ Individualized Education Programs Individuals with Disabilities Education Act (IDEA) (IEPs) Define Their Special Education Services. set forth a three-step process (Figure 1, see next Once determined eligible for special education, page). IDEA authorizes federal funding to all states students with disabilities receive IEPs specifying the agreeing to implement this process. Currently, all support their school districts will provide. At least states participate in IDEA. (For a brief overview of once per year, each student’s parents, teachers, IDEA, see our video Overview of Special Education and district administrators meet to develop his or in California.) her IEP, which includes specific goals and actions www.lao.ca.gov 3 AN LAO REPORT Figure 1 Three-Step Process for Identifying and Educating Students With Disabilities Step 1: Identify Affected Students School districts must identify children with the following conditions (size of boxes represents prevalence among California students with disabilities): Speech Impairment Autism Learning Disability Intellectual Health Problem Disability Step 2: Develop Program Within 30 days of identifying a child with a disability, school districts must convene a meeting to develop an Individualized Education Program (IEP). Meeting must include: Step 3: Provide Services School districts provide a free and appropriate public education based on the IEP from age 3 until graduation or through age 21. tailored to that student’s abilities and needs. who do not have disabilities. As with all elements of Figure 3 provides some illustrative goals and a child’s IEP, the least restrictive environment must actions that may be included in students’ IEPs. be determined collaboratively by each student’s Districts Must Serve Students With parents, teachers, and district administrators. Disabilities in the Least Restrictive Environment. School Districts Must Offer Special Education Federal law generally requires districts to serve Services Even to Students Enrolled in Private students with disabilities in whichever educationally Schools. About 7.5 percent of California’s appropriate setting offers the most opportunity to school-aged children (roughly 500,000 students) interact with peers who do not have disabilities. are enrolled in private schools. Federal law For students with relatively mild disabilities, this requires school districts to identify and offer typically means receiving instruction in mainstream special education to all qualified children residing classrooms. For students with relatively severe in their service areas, regardless of whether these disabilities, this may mean receiving most of children attend public or private schools. Although their instruction in special day classrooms (which school districts must offer special education to exclusively serve students with disabilities) but these children (for example, by offering to pay for participating in lunch or recess alongside students instructional aides to work alongside them in their 4 LEGISLATIVE ANALYST’S OFFICE Disturbance Emotional of Hearing Impairment Other Deaf or Hard Orthopedic a analysis full gutter Relatively Mild Disabilities Relatively Severe Disabilities a “Other” consists of students with multiple disabilities, traumatic brain injury, visual impairments, or both deaf and blindness. • Child’s parents • A general education teacher • A special education teacher • Other specialists • Child (when appropriate) • School administrator analysis full gutter AN LAO REPORT Major State Figure 2 Requirements Most Students Are Referred to Special Education By Parents or School Staff State Law Goes Somewhat Special Education Referrals by Source, 2017-18 Beyond Federal Requirements. Though states technically can opt out of IDEA, all states currently Physicians adhere to its rules and receive or Other associated IDEA funding. (A state opting out of IDEA is still Parents legally responsible for serving all students with disabilities.) Upon Other School opting into IDEA in the mid-1970s, Officials California lawmakers enshrined most provisions of IDEA into state law. Following each subsequent reauthorization of federal law, Teachers California has made corresponding changes to state requirements. In a few areas, California law private school classes), their parents may choose imposes additional requirements to refuse the offer and pay directly for special beyond IDEA. For example, state law imposes education services. In 2017-18, California schools maximum caseloads on some service providers. In provided special education services to about 2,300 addition, although IDEA only requires the provision students attending private schools. of special education until students turn age 22, IDEA Is Long Overdue for Reauthorization. state law allows students enrolled in special Between 1975 and 2004, IDEA was reauthorized education programs to finish out that school year. four times, or about once every seven years. The State Requires School Districts to Form last reauthorization (in 2004) was intended to Special Education Local Plan Areas (SELPAs). extend the act through 2010. To date, Congress Perhaps the most notable feature of California has made no notable effort towards a new special education law is its requirement that school reauthorization. The most recent reauthorization districts participate in a SELPA. Each SELPA remains in effect so long as Congress continues to is tasked with developing a plan for delivering authorize annual appropriations to the states (as it special education services. Small and mid-sized has every year since 1975). districts form regional SELPAs to coordinate their Figure 3 Students With Disabilities Receive Individualized Education Programs Illustrative Goals and Actions Age: 6 Age: 12 Age: 18 Disability: Speech Impairment Disability: Dyslexia Disability: Autism Goal: Clearly Articulate Words Goal: Read at Grade Level Goal: Develop Job Skills Action: Weekly Speech Therapy Action: Weekly Work With Specialist Action: Subsidized Part-Time Work www.lao.ca.gov 5 analysis full gutter AN LAO REPORT Other Federal Laws Affecting Students With Disabilities School Districts Must Address Specific Student Health Needs. Section 504 of the federal Rehabilitation Act of 1973 provides certain rights to students with any condition that affects one or more major life activities, including walking, seeing, breathing, and concentrating. Qualifying conditions range from disabilities that also qualify students for special education, such as autism, to conditions that do not typically qualify students for special education, such as diabetes or severe allergies. Students with qualifying conditions are entitled to an individualized “504 plan” that specifies how schools will accommodate their medical needs. For example, a 504 plan could explain how the school will administer prescribed insulin treatments to a student with diabetes throughout the school day. Schools Must Ensure All Facilities and Events Are Accessible to Individuals With Disabilities. The federal Americans with Disabilities Act (ADA) of 1990 requires public spaces, including schools, to be accessible to individuals with disabilities. This act also requires schools to make all activities accessible to individuals with disabilities, for example, by providing ramps for wheelchair access or sign language interpreters upon request. Although many of these protections overlap with those provided by the Individuals with Disabilities Education Act (IDEA), they apply in some situations where IDEA may not. For example, ADA requires access to after-school events that may not be included in students’ individualized education programs. special education services. Figure 4 Large districts are allowed to serve as their own SELPAs. Regional SELPAs Serve Majority of Students With Disabilities Charter schools are allowed to join charter-only SELPAs, which, Share of SELPAs, 2017-18 unlike regional SELPAs, may accept members from any part of the state. As of 2017-18, Charter-Only California has 132 SELPAs— 5 SELPAs 19,000 Students With Disabilities consisting of 81 regional SELPAs, 45 single-district SELPAs, 5 charter-only SELPAs, and 1 unique SELPA serving only students in Los Angeles County Single-District court schools. As Figure 4 shows, Regional regional SELPAs serve the majority 45 SELPAs 81 SELPAs 282,000 Students of students with disabilities. With Disabilities 465,000 Students The objective of SELPAs is to With Disabilities increase the effectiveness and efficiency of special education services by achieving certain economies of scale. (The box on page 7 provides more information about special education in charter schools.) SELPA = Special Education Local Plan Area. 6 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT Special Education in Charter Schools Charter Schools Are Nontraditional Public Schools. Charter schools are established by petition, typically authorized by local school districts, and sometimes managed by independent parties (typically nonprofit groups). Charter schools are exempt from most state education laws and are intended to provide innovative alternatives to traditional public schools. Many charter schools are small and rely on their authorizing districts to provide basic services such as processing payroll. Charter Schools Must Decide How to Participate in Special Education Local Plan Areas (SELPAs). State and federal law allow charter schools to function as a part of their authorizing districts for special education purposes. In these cases, charter schools are not responsible for developing and implementing individualized education programs (IEPs), rather this responsibility falls to their authorizing districts. These charter schools receive no special education funding and have no formal decision-making authority within SELPAs. In effect, these charter schools are treated like any other school of their authorizing district. Charter schools, however, may choose to provide special education services directly, thereby becoming responsible for their students’ IEPs. In these cases, charter schools receive special education funding and may vote in SELPA decisions. These charter schools may join either a collaborative SELPA (alongside other school districts) or a charter-only SELPA (exclusively alongside other charter schools). As the figure below shows, the most common arrangement is for charter schools to remain a part of their authorizing districts for special education purposes. Charter Schools Must Accept Students With Disabilities, but Serve a Smaller Share. State law requires charter schools to accept all interested students as long as their school sites have available room. Both state and federal law specifically prohibit charter schools from refusing to accept a student based solely on a disability. Despite these requirements, available data suggest charter schools are somewhat less likely than traditional public schools to serve students with disabilities. For example, about 10 percent of students attending charter-only SELPAs have IEPs, as compared to about 12 percent of students in regional and single-district Many Charter Schools Are a Part of Their SELPAs. Further, about 2 percent of Districts for Special Education Purposes students attending charter-only SELPAs Share of Charter Schools, 2017-18 have relatively severe disabilities (meaning any disability aside from learning disorders, Regional SELPA speech impairments, or health problems), as compared to about 4 percent of students in regional and single-district SELPAs. In conversations with various stakeholders, many indicate that parents of students with Charter-Only disabilities (and, in particular, parents of SELPA Part of students with relatively severe disabilities) School District often prefer the special education programs offered by their districts to those offered by nearby charter schools, and thus choose not to enroll their children in charter schools. Because most charter schools are small, they are often less equipped than their authorizing districts to provide a full array of SELPA = Special Education Local Plan Area. services to students with disabilities. www.lao.ca.gov 7 analysis full gutter AN LAO REPORT SELPAs Provide Administrative Support and prohibitively costly to serve at the local level. For Regionalized Services. State law requires all example, a SELPA may operate a special day SELPAs to collect and report certain data related classroom for all students with severe emotional to their members’ legal compliance. In addition, disturbance within the region or may employ an most SELPAs provide basic support such as itinerant teacher to work with all students who in-house legal assistance and teacher trainings. are deaf or hard of hearing within the region. (For Some regional SELPAs also directly serve students more information on SELPAs, see our video How Is with severe conditions—conditions that can be Special Education Organized in California.) STUDENTS WITH DISABILITIES Share of California Students Receiving more likely to be low income. Income status may Special Education Services Has Been correlate to disability status, as research has linked Increasing. After remaining at 10.8 percent poor maternal health care and nutrition to higher throughout the early 2000s, the share of students incidence of child learning disabilities. In addition, receiving special education has increased steadily many researchers believe cultural differences and every year since 2010-11. In 2017-18, 12.5 percent biases contribute to racial differences in special of California public school students received special education identification rates. Whereas Asian education. Though rates have been increasing in students have a relatively low identification rate, California, all but seven states still have higher black students have a relatively high identification rates. In 2017-18, the median state provided rate. The patterns across racial/ethnic groups in special education services to 14.3 percent of its California are similar to patterns in other states. students. Majority of Students With Disabilities Have Certain Student Groups Have Relatively Relatively Mild Conditions. Figure 6 shows High Special Education Identification Rates. the prevalence of specific disabilities by grade. Figure 5 compares students with disabilities in The majority of California students who qualify California to the state’s overall student population for special education have one of two types by income and race/ethnicity. Compared to other of disabilities: speech impairments (such as California students, students with disabilities are stuttering) and specific learning disorders (such as Figure 5 Students With Disabilities Disproportionately Belong to Certain Groups Share of Students, 2016-17 All Students With Students Disabilities Low Income 60% 66% Latino 54% 56% White 24% 25% Asian 6% 11% Black 6% 9% 8 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT Figure 6 Most Common Disability Varies Among Grades Share of Overall Student Enrollment, 2017-18 15% All Other Disabilities 10 5 Learning Disorder Speech Impairment K 1 2 3 4 5 6 7 8 9 10 11 12 Grade dyslexia). The prevalence of these disabilities varies by grade, with Figure 7 speech impairments being more common in the early grades and Share of Students With learning disorders more common Relatively Severe Disabilities Has Increased in the later grades. Serving Share of Overall Student Enrollment students with these types of 4.0% disabilities tends to be less costly compared to students with other 3.5 types of disabilities. (For more information on the prevalence of 3.0 specific disabilities, see our video 2.5 Who Receives Special Education?) Number of Students With 2.0 Relatively Severe Disabilities Has Increased Notably. As 1.5 Figure 7 shows, the prevalence 1.0 of students with relatively severe disabilities has almost doubled 0.5 since 2000-01. This increase is due largely to a notable rise in autism, which affected 2000-01 2009-10 2017-18 about 1 in 600 students in 1997-98 compared to about 1 in 50 students in 2017-18. www.lao.ca.gov 9 analysis full gutter AN LAO REPORT Incidence of Students With Disabilities Varies some more likely to designate students with by Region. The overall incidence of students relatively mild academic or behavioral challenges with disabilities varies notably among SELPAs— as having a disability. Second, geographic factors ranging from 4.5 percent to almost 20 percent. sometimes directly affect the incidence of certain Large differences are evident both in the incidence disabilities. For example, certain birth defects are of students with mild and severe disabilities. more common in areas heavily impacted by drug The incidence of students with relatively mild use. Third, some areas serve as “magnets” for disabilities ranges across SELPAs from 4 percent to parents of children with specific disabilities, either 15 percent, whereas the incidence of students with because their school districts are known to have relatively severe disabilities ranges from less than high-quality special education programs or because 0.5 percent to 5 percent. The incidence of students other community organizations (for example, with disabilities varies for at least three reasons. hospitals) provide high-quality services to such First, SELPAs vary in their specific practices for children. identifying students for special education, with SPECIAL EDUCATION SERVICES School Districts Offer Students With day class with a teacher specifically trained to Disabilities Specialized Instruction and educate such children. In addition to specialized Services. Specialized academic instruction is the instruction, many students with disabilities receive most common special education service school support services such as speech therapy, physical districts provide. Specialized instruction could be therapy, counseling, or behavioral intervention familiarizing a student’s general education teacher services. Figure 8 shows the most common special with certain instructional techniques designed to education services for students with specific help that student or serving a student in a special disabilities. Figure 8 Most Common Services Differ Depending on Disability Share of Services Provided by Disability, 2017-18 Other Health Impairment Specialized academic instruction College/career preparation Autism Speech therapy Speech Counselinga Impairment OT/PT Learning Other Disorder 10 20 30 40 50 60 70 80 90 100% a Includes psychological services and behavioral intervention services. OT/PT = occupational therapy/physical therapy (includes adapted physical education). 10 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT Majority of Students With Figure 9 Disabilities Are Served in Majority of Students With Disabilities Mainstream Classrooms. Are Educated in Mainstream Classrooms Figure 9 shows the settings in which students with disabilities Share of Students in Each Setting by Disability, 2016-17 are taught. The majority of students with disabilities are All Students taught alongside students With Disabilities Mainstream Classroom without disabilities in mainstream Split Time Special Day Class classrooms. These students Speech Separate School may receive special education Impairments services within these mainstream classrooms (for example, having an aide or interpreter work with Learning Disorders them one on one) or in separate pull-out sessions. Students with speech impairments or learning Autism disorders are especially likely to be served in mainstream classrooms. 20 40 60 80 100% Some Students With Disabilities Are Served in Special Day Classes. About 20 percent of all students with disabilities are taught primarily in educated in separate schools exclusively serving special day classrooms alongside other students students with disabilities. Typically, these students with disabilities. Typically, special day classes serve attend nonpublic schools or state special schools. students with relatively severe disabilities. Some A variety of agencies operate about 300 nonpublic special day classes provide instruction to the entire schools, which provide services to students with class using specialized techniques, for example disabilities under contract with school districts. sign language. Other special day classes are Almost three-fourths of the students served by organized around individual instructional modules these schools have been diagnosed with either at which students complete activities with intensive autism or emotional disturbance (the remainder one-on-one attention. having various other health impairments or intellectual disabilities). In addition to nonpublic Some Students Split Their Time Between schools, the state directly operates two residential Settings. Another 20 percent of students with schools for students who are deaf and one disabilities split their time between mainstream and residential school for students who are blind. The special day classrooms. For example, a student state also funds three diagnostic centers (one each may spend their mornings in a special day class in Northern, Central, and Southern California) that and afternoons in a mainstream class, or may evaluate students with particularly challenging attend a special day class for some subjects (such disabilities and assist with the development of IEPs. as reading) but a mainstream class for others (such (For more information on the California Schools for as math). the Deaf, see our report Improving Education for Relatively Few Students With Disabilities Deaf and Hard of Hearing Students in California.) Are Served in Separate Schools. Whereas Older Students With Disabilities Receive special day classrooms are typically located on Transition Plan. When students with disabilities the same campus as mainstream classrooms, reach 16 years old, IDEA requires their IEP teams about 3 percent of students with disabilities are www.lao.ca.gov 11 analysis full gutter AN LAO REPORT to develop a transition plan to help prepare them with local employers to provide part-time work for life after high school. These plans may focus opportunities for students with disabilities prior on transitioning to postsecondary education to graduation. Transition plans also can focus on or developing specific employment skills, like improving life skills, such as managing money or operating a cash register or performing automotive using public transportation. maintenance. In some cases, schools work OUTCOMES FOR STUDENTS WITH DISABILITIES Students With Disabilities Score Lower on students with disabilities have a notably lower Reading and Math Tests Than Other Students. four-year graduation rate than other student As Figure 10 shows, students with disabilities’ groups. Some students with disabilities, however, average test score on state reading and math just take longer to graduate. Of the students assessments was at the 18th percentile of all test with disabilities exiting high school in 2017-18, takers in 2017-18. This percentile ranking is notably 76 percent left with a high school diploma. Of below that of other student groups, including the remaining students, 13.6 percent dropped low-income students (who score at the 35th out, 3.4 percent aged out (reaching age 22), and percentile) and English learners (who score at the 7 percent received a certificate of completion 23rd percentile). (discussed below). Students With Disabilities Have Worse Some Students With Disabilities Receive Discipline and Attendance Outcomes. As Certificates of Completion in Lieu of High Figure 11 shows, students with disabilities’ School Diplomas. When an IEP team determines suspension rate is almost double the statewide that a student is unlikely to meet all requirements average. Students with disabilities also have for high school graduation, the team may elect to relatively high rates of chronic absenteeism, with have the student seek a certificate of completion almost one in five students with disabilities missing instead of a high school diploma. Each IEP team 10 percent or more of the school year. is responsible for setting individual standards Students With Disabilities Have Relatively for awarding a certificate of completion. Such Low Graduation Rates but Most Still Receive certificates are sometimes accepted as the a High School Diploma. As Figure 12 shows, equivalent of a high school diploma. For instance, Figure 10 Students With Disabilities Have Low Standardized Test Results Average Percentile Ranking on State Tests, 2017 Student’s parent has a graduate degree 76th Student’s family is not low income 64th Student’s family is low income 35th Student’s parent did not complete high school 32nd Student is an English learner 23rd Student has a disability 18th 12 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT Figure 11 Students With Disabilities Have Relatively High Suspension and Chronic Absenteeism Rates 2017-18 8% 20% 18 7 16 6 14 5 12 4 10 8 3 6 2 4 1 2 Students Low-Income English All Students Low-Income English All With Students Learners Students With Students Learners Students Disabilities Disabilities Suspension Rate Chronic Absenteeism Rate some (typically private) colleges and some State Created New System of Support employers accept them, but they are not accepted for Districts With Poor Special Education by the military or for federal student aid. Most Outcomes. Starting in 2018-19, California is students receiving certificates of completion have providing $10 million annually for seven SELPAs to relatively severe cognitive disabilities. provide statewide assistance as well as targeted About One in Five Districts Have Especially Poor Outcomes Figure 12 for Their Students With About Two-Thirds of Students With Disabilities Disabilities. California recently Graduate in Four Years began implementing a new Four-Year Cohort Graduation Rate, Class of 2017 school district accountability system. As with previous 90% accountability systems, district 80 performance is measured 70 overall as well as for specific student groups. In fall 2018, 60 343 districts (out of approximately 50 1,000) were identified as having 40 poor performance with one or 30 more of their student subgroups. Of these districts, 219 were 20 identified because of poor 10 outcomes for their students with disabilities. Statewide Low-Income English Learners Students With Students Disabilities www.lao.ca.gov 13 analysis full gutter AN LAO REPORT assistance to districts identified as having poor government requires all states to annually survey outcomes for their students with disabilities. The students with disabilities who exited high school the SELPAs were selected through a competitive previous year. The most recently available survey grant process. Three of the selected SELPAs results for California students indicate that about are tasked with providing assistance in the core half of all students with disabilities are enrolled in areas of (1) ensuring data integrity and conducting higher education one year after high school. By data analysis, (2) implementing effective special comparison, we estimate about 60 percent of all education practices, and (3) instituting schoolwide California students are enrolled in higher education processes to support continuous improvement. one year after graduation. About a quarter The remaining four SELPAs are tasked with being of students with disabilities are competitively statewide hubs of expertise in particular special employed, and slightly less than 10 percent are in education areas (including autism and special other types of employment or training programs education for English learners). (typically subsidized). We do not have good data on Limited Data on Long-Term Outcomes student outcomes beyond the first year out of high for Students With Disabilities. The federal school. SPECIAL EDUCATION FINANCE In this section, we focus first on the fund sources types of special education services. (For more and programs that support special education, then information on state funding for special education, turn to special education costs and recent cost see our post History of Special Education Funding trends. in California.) Federal Special Education Funding Follows Funding Three-Part Formula. As Figure 14 shows, Most State Funding Allocated Based on most federal special education funding (about Overall Student Attendance. Special education 60 percent), like most state funding, is allocated is supported by state categorical funding, federal based on overall student attendance, regardless categorical funding, and local unrestricted funding. of how many students receive special education or As Figure 13 shows, California has 11 special what kinds of services those students receive. Of education categorical programs, with a total of the remaining federal special education funding, almost $4 billion in associated state funding. The most is allocated on a hold harmless basis largest of these state special education programs according to the amount provided to California is known as AB 602 after its authorizing legislation. in 1998-99 (the last year before the federal AB 602 provides SELPAs funding based on their government revised its funding formula). The rest is overall student attendance, regardless of how allocated based on census counts of children living many students receive special education or what below poverty. As explained in the box on page 17, kinds of services those students receive. The California allocates the majority of federal special state shifted most special education funding education to SELPAs, while reserving some funding into AB 602 when the program was enacted in for state-identified priorities. 1997—following concerns that the state’s previous Federal Funding Falls Short of Aspirational special education funding formula (which provided Target. Starting in 1977, federal law established SELPAs differentiated rates based on the types a maximum grant amount for each state equal to of special education services they provided) had 40 percent of the national average per-student become too complicated and incentivized SELPAs educational spending amount (including special to inappropriately identify and serve some students. education expenditures) times the state’s Other special education programs provide funding population of students with disabilities. This based on alternative formulas and/or for specific 14 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT Figure 13 California Funds Many Special Education Programs 2018-19 (In Millions) Program Distribution Method Spending Restrictions Funding AB 602a Overall student attendance Any special education expense $3,163 Mental Health Services Overall student attendance Mental health services for students 374 with disabilities Out-of-Home Care Location and capacity of Licensed Any special education expense 140 Children’s Institutions SELPA Administration Overall student attendance SELPA-level servicesb 97 Infant/Toddler Services Number of infants and toddlers with Early intervention services for infants and toddlers 80 special needs served with special needs Workability Number of students enrolled in Job placement and training for students 40 employment training programs with disabilities Low-Incidence Disabilities Number of students who are deaf, Services and materials for students with qualifying 18 hard of hearing, visually impaired, conditions or orthopedically impaired SELPA Leads Competitive Support services 10 Extraordinary Cost Pools Individual student placements Expenses associated with very high-cost residential 6 or nonpublic school placements Necessary Small SELPAs Attendance in SELPAs serving SELPA-level servicesb 3 fewer than 15,000 students Professional Development Overall student attendance Staff development 1 Total $3,932 a Special education program named after authorizing legislation—Chapter 854 of 1997 (AB 602, Davis). b Includes coordination, data management, required reporting, and fiscal administration. SELPA = Special Education Local Plan Area. aspirational funding level is commonly referred This “local share” is intended to encourage schools to as “full funding” for IDEA. As Figure 15 shows to contain special education costs even while (see next page), actual federal funding to California ensuring adequate services. schools has long fallen short of this target. It was Federal Law Requires “Maintenance of Effort” $3.2 billion below the target in 2018-19. (MOE) on State and Local Spending. In order Most Categorical Funding Is Provided to receive federal special education funding, both to SELPAs. With the exception of a few small categorical programs (such as funding for Figure 14 infant/toddler services and job placement and training for older students), most state and federal Federal Special Education Funding special education funding is provided to SELPAs Allocated Based on Three Factors rather than directly to school districts and charter 2018-19 (In Millions) schools. Typically, SELPAs reserve some funding Distribution Method Amount for regionalized services and distribute the rest Overall student attendance $707 to member districts. School districts use local Amount received in 1998-99 323 unrestricted funding (primarily from the Local Number of children below poverty line 125 Control Funding Formula) to support any costs not Total $1,155 covered by state and federal categorical funding. www.lao.ca.gov 15 analysis full gutter AN LAO REPORT Figure 15 Federal Special Education Funding Falls Short of Aspirational Target Federal Special Education Funding for California (In Billions) Aspirational Funding Level $4.5 4.0 3.5 3.0 $3.2 Billion Difference 2.5 2.0 1.5 1.0 Actual Funding Level 0.5 1989-90 1999-00 2009-10 2018-19 states and school districts must spend at least imposes specific special education costs, such as much on special education each year as they as the cost for smaller classes, additional teacher did the preceding year. States and districts may support, speech pathologists, audiologists, choose whether their MOE is calculated on the basis of total Figure 16 special education spending or Special Education Is Relatively Costly per-student spending. By “locking Average Expenditures Per Student, 2017-18 in” increased expenditures, this requirement offers an additional $30,000 incentive for the state and districts to contain special education 25,000 costs. Local Unrestricted Expenditures 20,000 Special Education Special Education Imposes Federal Categorical Additional Costs Above and 15,000 State Categorical Beyond General Education. Figure 16 illustrates the average 10,000 cost of educating students with and without disabilities by General Education General Education 5,000 funding source. Students with disabilities receive some general education resources provided to All Students Students With Disabilities all students, such as teachers, textbooks, and administrative support. In addition, each IEP 16 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT therapists, and tailored instructional equipment. In other students. Whereas a school district might 2017-18, special education costs averaged about spend $1,000 annually to provide periodic speech $17,000 per student with disabilities, as compared therapy sessions to a student with a speech to general education costs, which averaged impairment, it might spend more than $100,000 about $10,000 per student. Accounting for both annually to house a student with severe emotional general and special education costs, students with disturbance in an out-of-state nonpublic school. disabilities cost on average more than two times Service costs can vary notably even for students as much to educate ($27,000) as students without with the same type of disability. For example, we disabilities ($10,000). estimate schools annually spend between $15,000 Special Education Costs Vary by Student. and $100,000 per student who is deaf or hard Special education is highly individualized, with of hearing, with costs varying based on what some students requiring notably more intensive particular services each student is provided and in support and thus being more costly to serve than what educational setting. Federal Funding for State-Identified Priorities Some Federal Funding Used for State-Identified Priorities and Administrative Activities. States may reserve a certain share of their federal special education funding for two types of activities. First, states may allocate some federal funding for state-identified priorities. As the figure shows, California currently reserves California Uses Some Federal Special Education Funding for $104 million of its federal Select Priorities funding for these priorities, 2018-19 (In Millions) which include supporting Use Description Amount mental health services Mental Health Fund SELPAs to provide mental health services to $69 and dispute resolution. Services students with disabilities. California’s allotment for State-Level Services Support CDE and OAH in their special education- 20 these types of activities is related activities, including monitoring and litigation. $25 million less than the State Special Schools Partially pay for transporting students between home 4 maximum amount allowed Transportation and state-run residential schools for students who are blind or deaf. for such uses under federal Specialized Produce and disseminate instructional materials in 4 law. The state currently Instructional braille, large print, audio book, or American Sign allocates this $25 million Materials Language video book formats. directly to Special Family Empowerment Support 14 nonprofit agencies to help educate parents 3 Education Local Plan Areas Centers about special education law and services. for their services. Second, Alternative Dispute Help resolve disputes between parents and 2 Resolution administrators without proceeding to a formal states may reserve some hearing. funding for administrative Focused Monitoring Fund 11 consultants responsible for coordinating state 1 activities, such as collecting and Support efforts to monitor district compliance with federal and reporting data on education law and assist those failing to comply. district compliance with State Systematic Develop resources for implementing the state’s plan to 1 Improvement Plan improve compliance with federal law. federal law. California Total $104 currently spends the SELPA = Special Education Local Plan Area; CDE = California Department of Education; and OAH = Office of maximum amount allowed Administrative Hearings. on these administrative activities ($25 million). www.lao.ca.gov 17 analysis full gutter AN LAO REPORT Special Education Expenditures Vary by inflation-adjusted special education expenditures Region. In per-student terms, special education increased 20 percent, from $10.8 billion to expenditures vary notably among SELPAs. In $13 billion. With the exception of an increase to 2017-18, we estimate SELPAs spent an average of federal funding as a result of stimulus legislation about $2,000 per student (spreading costs across in 2009-10, both state and federal funding has all students in the region). Per-student spending decreased in inflation-adjusted terms over this among SELPAs ranged from about $600 to more period largely as a result of declining overall student than $4,000. Special education expenditures vary attendance. Consequently, local unrestricted by region for at least three reasons. First, the funding has been covering an increasing share overall incidence of students with disabilities varies of special education expenditures (49 percent in across the state. Second, even SELPAs serving 2007-08 compared to 61 percent in 2017-18). similar proportions of students with disabilities may Expenditures Have Increased in Part Due to differ in the intensity of their services. Third, the Spillover Effects From General Education . . . cost of providing specific special education services Some of the factors increasing special education varies by region, largely because of differences in expenditures are not unique to special education. the compensation packages that districts provide In particular, since 2013-14, increases in state K-12 teachers and specialists. funding have resulted in school districts increasing staff salaries. Over this period, schools also have Recent Cost Trends been required to make larger pension contributions Special Education Expenditures Have on behalf of their employees. We estimate these Increased Notably in Recent Years. Figure 17 higher compensation costs account for about shows inflation-adjusted special education one-third of recent increases in special education expenditures by fund source between 2007-08 expenditures. and 2017-18. During this ten-year period, Figure 17 Unrestricted Funds Covering Growing Share of Special Education Costs Special Education Spending by Fund Source, 2017-18 Dollars (In Billions) $14 12 10 8 Local Unrestricted 6 Stimulus Federal 4 2 State 2007-08 2009-10 2011-12 2013-14 2015-16 2017-18 18 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT . . . And in Part Due to an Increase in from paraprofessionals, speech pathologists, Students With Relatively Severe Disabilities. occupational therapists, and adaptive physical We estimate about two-thirds of recent increases education specialists, among other specialists. in special education expenditures are due to an California schools have increased their employment increase in the incidence of students with relatively of such professionals by about 20 percent since severe disabilities, particularly autism. Students 2006-07. with autism typically require intensive support OVERSIGHT California Department of Education (CDE) Federal Government Oversees State Oversees Local Compliance With Special Compliance With Special Education Law. Each Education Law. School districts annually submit year, CDE compiles the data it receives from school data on certain special education indicators to districts into a statewide report and submits the CDE. For each district, the indicators track the report to the federal government. The federal Office number of students receiving special education of Special Education Programs (OSEP) reviews services, the types of disabilities that students the report along with CDE’s description of its have, the district’s adherence to procedural process for identifying and assisting districts with requirements (for example, whether IEPs are poor indicators. Based on this review, OSEP gives held in a timely manner and include all required California (and all other states) a grade ranging parties), and student outcomes. Districts may be from “meets requirements” to “needs substantial flagged for further review or technical assistance intervention.” In July 2019, OSEP designated if these indicators show noncompliance with California, along with 22 other states, as “needs procedural requirements, poor student outcomes, assistance” (for two or more consecutive years). and/or significant disproportionality in the rates of States awarded any designation besides meets identification for special education among student requirements may receive additional oversight or groups. technical assistance from the federal government. DISPUTE RESOLUTION Federal Law Allows Parents to Challenge an OAH judge submits a legally binding ruling Proposed Special Education Services. Under resolving each dispute. IDEA, states must establish a formal process for Federal and State Law Establish Mediation resolving disputes regarding IEP services. For Process. Because formal hearings can be costly example, parents who believe their child requires and divisive, federal and state policies typically placement in a nonpublic school rather than their encourage alternative methods of dispute district’s own special day class must be permitted resolution. The most prominent alternative is to argue their case before an administrative law mediation. During mediation, OAH assigns a trained judge focused on special education. In California, special education mediator to works with all parties these disputes are resolved through the Office of in collaboratively resolving each dispute. Typically, Administrative Hearings (OAH) under a contract disputes that are not resolved during mediation with CDE. Both parents and school districts may proceed to a formal hearing. request hearings with OAH. Following a formal Number of Disputes Has Increased. Between hearing process (which typically lasts several days), 2006-07 and 2016-17, the number of cases filed www.lao.ca.gov 19 analysis full gutter AN LAO REPORT with OAH (including both hearings and mediations) with relatively severe disabilities, as IEPs that increased 84 percent—growing from 2,188 cases involve more intensive services are more likely to to 4,032 cases. Some stakeholders we interviewed generate disputes. More disputes increase districts’ attribute this growth to the increase in students administrative and legal costs. CONCLUSION Understanding how California’s students special education shortcomings, crafting potential with disabilities are served is an essential step policy responses, and identifying all the possible towards improving their educational outcomes repercussions of proposed policy changes requires and experiences. In this report, we provide a especially careful thinking and deliberation. Our high-level review of special education laws, intent throughout this report has been to help the services, outcomes, funding, and costs. As Legislature understand this complexity, with the evident from the review, special education is ultimate goal of better positioning the Legislature characterized by a complex interplay of policies to engage with the administration in developing and practices at the federal, state, and local levels. cost-effective policy responses for improving Given this complexity, determining the roots of special education in California. 20 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT www.lao.ca.gov 21 analysis full gutter AN LAO REPORT LAO PUBLICATIONS This report was prepared by Ryan Anderson and Amy Li, and reviewed by Jennifer Kuhn Pacella. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814. 22 LEGISLATIVE ANALYST’S OFFICE