Relates to certain tuition and reconciliation rates and establishes the special education provider revolving loan fund

BILL NUMBER:S5661A

Title of bill

An act to amend the education law, in relation to certain tuition and reconciliation rates; and to amend the state finance law, in relation to the special education provider revolving loan fund

Purpose

To provide certain special education schools with increased rates from the Department of Budget and to provide an alternative to Revenue Anticipation Notes (RANS) for Special Act school districts, 853 schools and 4410 special education programs and to keep the school open when such RANS are not available.

Summary of provisions

Section one amends subdivision 4 of Section 4405 of the education law by adding paragraph J to provide a tuition rate based on the personal income growth index. Also adds paragraph K to provide that reconciliation rates are approved by the Department of the Budget within one hundred twenty days from submission of the rate to the State Education Department.

Section two adds section 97-oooo to the state finance law which establishes a special education revolving loan fund under the joint custody of the comptroller and the Commissioner of Tax and Finance This section authorizes the comptroller to provide short term loans from the fund, pending tuition payments from the state.

Section three provides the effective date.

Justification

Special Act school districts, 853 schools and 4410 special education programs in New York State represent a particularly high needs student population. The high need level associated with this population results in significant costs to operate these schools. Yet for the past six years, these schools and programs have not received a cost of living adjustment and are functioning with a tuition rate based on 2006 costs. Under current law however, funding is provided to special education programs through a complex methodology in which schools are getting reimbursed at rates set in previous years, for students previously served. These school districts currently rely heavily on short-term borrowing from banks in the form of Revenue Anticipation Notes (RANs), to keep their doors open. The state does not allow for reimbursement of interest fees that are paid to banks.

These schools and programs are required to give educational services and support to children and to do so without the same financial and infrastructure supports that are afforded to other public schools. For several years now, these schools and programs have lived with no increases in their tuition reimbursements and have experienced an inconsistent application of the tuition rate setting methodology. In order to enable them to manage the affairs of the schools efficiently and to address the needs of their students there must be a more systemic approach to providing the funding and financial support the schools and programs require. Traditional public schools receive an allowable growth amount equal to the "personal income growth index" and 853 schools, Special Acts and 4410 programs seek educational

funding parity between students with disabilities at special education schools and those at public school districts.

This bill provides the funding certainty and flexibility necessary to help these schools and programs maintain their mission and to educate our students with some of the greatest needs. By providing a new tuition rate methodology, the bill gives these schools and programs the certainty of funding year to year. Furthermore by allowing New York State to provide loans to 853 schools, Special Act schools and 4410 preschool special education programs in anticipation of the school's revenue from the state will thereby save the schools and programs million in interest payments at no cost to the state.

Legislative history

New bill.

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately.