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Pennsylvania Court's Decision Eases Debate on Funding Shift

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A bitter debate in Pennsylvania over changes in the state's system of funding special education was temporarily resolved last week when a state judge approved a plan to give local educators more say in how the changes are made.

At issue was a state plan to shift some costs from the state special-education fund, which faces a deficit of nearly $100 million, to local school districts, which would have to finance programs for the handicapped and gifted with general state school aid.

To carry out the plan, state officials this spring began reviewing the budgets of state-funded intermediate units, which provide the bulk of special-education services in Pennsylvania, and disallowing expenditures for some services that they have traditionally borne.

The move touched off a furor that led to the resignation of the state secretary of education earlier this month. (See Education Week, June 14, 1989.)

The agreement approved by Commonwealth Court Judge James Crumlish Jr. provides intermediate units with a formal procedure to contest the budget cuts.

It requires the state to approve the units' budgets within 30 days. After that period, units could contest reductions in a departmental hearing and, later, in court.

The state education department would also be required to create an escrow account so that money would be available to reimburse the intermediate units that successfully contested budget cuts.

"What this does is set up a procedure that would not cause children to lose services in the interim," said Paul Stevens, a lawyer involved in the case.

The agreement stemmed from a lawsuit filed by a coalition comprising most major education groups in the state and a number of intermediate units and school districts. The group sought an injunction barring the budget cuts.

The settlement came a week after Gov. Robert P. Casey attempted to quell fears over the matter by pledging to seek a special $137-million appropriation to help districts shoulder new special-education costs.

But days later the Governor also announced that, because of lower-than-expected state revenues, he was decreasing his proposed general-fund budget, including state aid to schools.


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