Provides an annual growth amount for the tuition reimbursement for school age programs operated by in-state approved private schools for students with disabilities and special act school districts

Summary of the Provisions of the Bill:

Section one amends paragraph c of subdivision 4 of section 4405 of the education law to provide that for the 2014-2015 school year and thereafter, annual tuition rates for special act school districts and in-state approved private residential or non-residential schools educating students with disabilities that are located within the state shall increase by the greater of a three year average of State-wide total personal income or zero.

Section two is the effective date

Statement in Support of the Bill: Tuition reimbursement for Special Act School Districts and Approved Private Schools Serving Students with Disabilities (853 Schools) is based on a rate methodology that is established by the Department and approved by the Division of Budget (DOB). Following four years of zero growth in tuition reimbursement, the 2013-14 rate methodology included a three percent trend factor for direct care costs of school age providers as recommended by the Department. This increase provided short-term relief, but did not address many of the shortcomings of the current system.

At the November 2012 meeting, the Board of Regents directed the Department to create a Special Education Financial Advisory Workgroup to allow all interested stakeholders to provide input on the current tuition rate-setting structure for special education providers and discuss recommendations to maximize the efficient and effective use of state and local resources. This workgroup held two meetings in May of 2013. Based on provider testimony at the Special Education Financial Advisory Workgroup meetings, and SED analysis of submitted cost data, a lack of predictable growth to fund increasing costs and many technical aspects of the current rate setting methodology, have endangered the capacity of Special Act School Districts and 853 Schools to operate essential special education programs for the some of the most severely disabled school age children.

To assist in the financial recovery of Special Act School Districts and 853 Schools, the Work Group representatives strongly endorsed the need for statutory changes - with particular emphasis on the establishment of an annual tuition rate growth factor. This legislation would create a statutory index for establishing the growth in annual tuition rates based on a three year average of personal income of taxpayers in the state. The current growth in tuition rate

is established administratively and is not based on a predetermined index. A statutory growth index based on an average of state personal income growth would establish predicable and timely tuition increases and allow for improved budget planning.

Budgetary Implications of the Bill There is no cost to the state during the 2014-15 school year. Using past data, it is projected that a trend increase for tuition based on a three year average in total personal income growth (3.8%) would provide an additional $29.5 million in billable tuition for these schools in the 2014-15 school year. This amount would be paid by the placing school district or social service district as part of the annual tuition amount and for the placing school district these costs would be eligible for private excess cost aid and July and August aid under Education Law § 4408.

Prior Legislative History: This is a new bill.

Effective Date: The bill would take effect immediately.