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Private Placement of Spec.-Ed. Students Straps Districts

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When several disabled children moved into Dedham, Mass., last year, the town found itself in a fiscal dilemma confronting many other small communities across the country.

Under federal and state law, the children were entitled to special-education services. But under the town's financial constraints, paying for the privately run programs they needed--a $39,000-a-year day school in one boy's case--would have plunged the community deeply into debt.

Dedham school officials tackled the problem by hunting up cost savings in other areas. They put off building repairs, cut back on custodial help, and left a teaching vacancy unfilled in a program for gifted and talented students.

But such solutions, they say, are temporary at best.

"If these kinds of costs continue to rise," said Patricia Walsh, the district's special-education director, "there's no way the school department can provide all the things that every kid needs and still meet the legal requirements for special-education students."

Similar warnings are coming from special educators wrestling with their own budget problems in a number of other states. While each situation is distinguished by its own regional complexities, a common bogeyman surfaces in them all: The high cost of placing handicapped children in private settings.

"It's come down to a wrestling match between human rights and economics," said Johnathan McIntire, director of programs at the Vermont Achievement Center, a privately run day program in that state. "As one legislator put it to me,

'Why should I spend $30,000 on one kid when I can take all that money and buy services for a bunch of less severely handicapped kids?"'

Concern about private-placement costs has cropped up perennially since the Congress, in landmark legislation in 1975, ordered public schools to provide a "free, appropriate education" for all handicapped students.

As a visible, big-ticket item in special-education budgets, the private facilities have found themselves under siege whenever money is tight. And controversies intensify when, as was the case with Dedham, paying for private placements comes at the expense of other programs.

As Mary Beth Fafard, Massachusetts' associate commissioner for special education, noted: "Special education in the whole country is driven against group education."

But a combination of forces--economic, social, and legal--is operating in a number of states to give the issue particular impact now.

Chief among them is the cost spiral in non-public care facilities.

According to a recent study by Decision Resources Corporation, the average per-pupil expenditure for a student in a private, self-contained classroom is two-and-a-half times higher than it is for students in similar settings in the public schools. While this does not mean, experts say, that costs at such facilities have increased any faster than education costs as a whole, it does mean that shockingly large, line-item costs for special care appear more frequently in local budgets.

The reason for such high costs is clear to special educators. Children placed in private programs today, they say, suffer from more severe and complicated handicaps than in the past. Where developmental disabilities and mental retardation were the main problems represented by special placements, a new population has emerged--one with complex behavioral and emotional disorders and multiple handicaps--that requires more intensive and costly services.

"You're not talking about the same kid in the public schools," said James Major, executive director of the Massachusetts Association of 766-Approved Private Schools, the state association for private providers of special-education. "A kid who needs an hour or two of tutoring in math is not the same as a kid who needs constant, one-on-one assistance or special therapy."

Margaret Ortinau, who heads the Illinois Affiliation of Private Schools for Exceptional Children, said the nature of the disabilities afflicting children in private programs began to change soon after the federal special-education law was passed.

"In the first five years after the law went into effect, there was a great increase in the non-public sector," Ms. Ortinau said. "But that began to level off because public schools began making a great effort to handle these children in a public environment."

"If a school can't handle a child now, it's almost always a very serious health problem or a very serious behavior problem," she said.

A parallel social development--deinstitutionalization--shifted responsibility for many of the most severely handicapped children from state-run facilities to local school districts. In Massachusetts, for example, state officials have predicted that, by 1991, no child will remain in a state-run hospital.

Many schools, unable to adequately--or economically--serve this new influx of children on their own, have continued to turn to private special-education providers to do the job.

Also contributing to the changes in special placement, educators say, have been exacerbations in such social problems as drug use, crime and violence, poverty, and family breakdown. Those problems have helped contribute, they say, to a surge in the number of children suffering from emotional and behavioral disorders. Often, these types of disorders are accompanied by learning disabilities and other handicaps.

"These complex, multiple problems didn't occur overnight," said Barry Newill, who heads the Vermont Council of Private Special-Education Providers, "and they aren't going to be solved overnight."

But although such trends provide a common backdrop to local controversies over special-education costs, experts point out that no two locales may have an identical set of factors feeding their problem.

The complexity of the situation is evident in three states where the issue has recently caused political turmoil--Massachusetts, Vermont, and Illinois.

Nowhere has the debate over special-placement costs taken on more dramatic proportions than in Massachusetts, where traditions in private special-education schools date back more than 160 years.

A catalyst for the current problems there has been Proposition 2, a state law that severely limits the ability of cities and town to levy taxes for the services they provide. Approved in a 1980 referendum, the law restricts property taxes to 2.5 percent of assessed property value.

Steady increases in state aid to municipalities helped cushion the blow from Proposition 2 for several years. But as the state's overall financial condition has deteriorated, the state subsidies have dried up.

Pressured by these new fiscal constraints, local officials have singled out for criticism the pricetag for special education in general, and private placements in particular.

Part of the problem is that Massachusetts has a higher proportion of students in special education than any other state. Nearly 14 percent of all school-age children there receive special-education services. The nationwide average is closer to 12 percent.

Only a small percentage of those students--3.5 percent--are being served in private day or residential programs. Yet the state ranks sixth nationally in the percentage of its students placed in "private, separate facilities," according to the U.S. Education Department.

"It causes an inordinate problem for a lot of small towns when they have one or two [severely disabled] children move in, because the tuition can be over $100,000 a year," said Nancy Richardson, an aide to Gov. Michael S. Dukakis. She sits on a commission appointed by the Democratic Governor to examine special-education costs.

Dedham's fiscal crisis is minor, in fact, when compared with some of the hardships that have confronted other Massachusetts towns in recent years.

Faced with a $250,000 deficit in the school district's special-education budget two years ago, parents in the Boston suburb of Holliston had to raise $34,000 to shield foreign-language studies from the budget ax. They also sponsored $100-a-plate suppers to raise funds to keep school sports programs intact.

And in Northbridge this year, officials notified 75 parents that the town would no longer provide their children with special-education services because of budget cuts. The program was reinstated after Northbridge received emergency assistance from the state.

Some Massachusetts educators lay much of the blame for their current fiscal dilemma on a 1985 federal court ruling.

The watershed decision came in a case known as David D. v. Dartmouth. In it, a federal appeals court used Massachusetts' special-education law--rather than the federal law--to determine that a mentally retarded adolescent boy should be placed in a private, residential school.

Considered to be more generous than the federal law, the state law mandates placing handicapped children in the environment that will provide them with the "maximum, feasible benefit."

"In Massachusetts," said Margaret Reed, the director of special education in Holliston, "that has come to mean, more is better."

Unlike a growing number of parents elsewhere who seek placement for their handicapped children in mainstream classrooms, parents in Massachusetts request--and fight for--private-school placements, Ms. Reed said.

"There seems to be a general feeling that private schools are better," she said, "I think that's somehow tied up in their minds with Exeter or Phillips Academy."

The same high regard for private education pervades the issue in Vermont, educators there report.

In Vermont, as in Massachusetts, they say, special education in general is at issue. But particular attention is being paid to private, residential programs. The state ranks fourth nationally in the percentage of students served in such programs, according to federal data. More than 50 of the special-placement children in Vermont attend out-of-state schools.

Special educators in both of the New England states say their difficulties in this area have been exacerbated by a recent federal law.

Intended to assist parents who would otherwise be unable to afford to challenge their children's special-education programs, the Handicapped Children's Protection Act of 1986 requires schools to pay the legal costs for parents who prevail in special-education disputes with the school district.

But special educators--some of whom jokingly refer to the law as the ''attorneys' retirement act,"--say one result of its passage has been that an increasing number of districts simply bow to the prevailing sentiments favoring private placements, rather than risk exorbitant court costs.

No one disputes the fact that many students may indeed be better served in private programs--particularly those with rare handicaps for which local schools cannot offer efficient care.

But in Vermont, educators say, an unusually large number of the specially placed children have learning disabilities, the most common of the handicapping conditions covered by law. They question whether many such children might not be served just as well in local schools.

"We're hoping we can bolster regular education, so that more of the children will be able to stay in their regular schools--perhaps with some remediation," said Representative William Talbott of Addison, who chairs a commission formed last year to examine the problem.

Part of the problem in Vermont, according to educators, is a lack of ''in-between" services for disabled students. There are few community-based day programs or self-contained classrooms--either public or private--where students can get intensive services at lower costs.

"In remote parts of the state, it's either do it inside the school or you end up with very high costs for out-of-state placement," said William Mathis, president-elect of the Vermont Superintendents Association.

He said the present furor in Vermont stems in part from resentment over high property taxes. Although many of the state's residents have relatively low incomes, their property is often assessed at the higher rates generated by Vermont's popularity as a resort area.

"We have a fundamental rebellion going on," Mr. Mathis said. "It's hard to take some of these costs to a New England town meeting and say, 'Because of federal and state law, you have to pay for this."'

In Illinois, the debate is less colored by "grassroots" sentiment than by hard political reality.

Simply put, said Jack Shook, manager of special education for the education department, the state has run out of money to pick up its share of the cost of educating handicapped children in residential programs.

Under state law, the department is required to use its share of federal special-education funds to help pay the room and board costs of students placed in private, residential programs. It also picks up part of the tuition costs on a prorated basis.

"Our room and board costs this year--for the 1988-89 school year--are greater than the amount of money set aside to pay for it," said Mr. Shook. Next year, he predicted, the deficit may be twice as large.

A state commission has been appointed to study the issue, but Mr. Shook said several factors may already be clear.

One is that federal special-education funding to the state has decreased in recent years--partly as a result of having fewer special-education students, and partly because increases in federal allocations nationwide have declined.

"We also know that over the past six or seven years, the costs for placing residentially has increased, but it also has changed," he said.

Where tuition once accounted for 40 percent of the total cost, it now accounts for only 30 percent, he said. Room and board costs make up the remaining 70 percent.

"We figure that's the result of a reduction in support from other state agencies," he said.

"Basically, we've got a crisis on our hands," said Mr. Shook, "and from what I hear around the country, we're not alone."

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