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Tennessee's commissioner of education, Charles E. Smith, has postponed the implementation of a new funding formula for special education because a number of school districts would lose money under the change, a state education official said last week.

Mr. Smith ordered a one-year delay to give state officials "time to look at other options that could minimize the impact'' of the reductions on as many as 35 of the state's 141 school districts, according to Brad L. Hurley, executive assistant to the commissioner.

The districts would have lost from $10,000 to $250,000 each in state aid for the next fiscal year if the new formula had taken effect as scheduled.

"We simply don't feel comfortable implementing a new formula that would have that type of impact on 35 systems,'' Mr. Hurley said. He added, however, that the revised formula, which was developed by a state-appointed task force to ensure that special-education funding is distributed fairly, has "considerable merit.''

The move to delay implementation was also influenced by the legislature's decision to study over the summer the state's entire system of financing education, including special education, the official said.

Under the new formula, funding for special education would be more closely linked to the actual services districts provide, rather than the number of students served.

The New York State Board of Regents has given preliminary approval to a dropout-prevention plan that is based on the assumption that school itself, not students' social or economic backgrounds, is the critical factor in determining whether a student will complete high school.

Among the key elements of the wide-ranging plan is a recognition that schools must help students develop a sense of identity and self-esteem.

Also included are recommendations that all public schools offer diploma programs outside regular school hours; that conferences with the parents of remedial students be scheduled at least every three months; that schools make regular efforts to get in touch with those who have dropped out; and that students forced by outside circumstances to drop out for limited periods of time be granted leaves of absence.

In addition, the plan recommends that state-funded day care and other services be provided to teen-age parents to help them complete school; that transitional programs be offered to dropouts wishing to return to school; and that teachers receive special training on student characteristics that would emphasize the impact of cultural diversity, disabilities, economic disadvantages, health, and limited English proficiency.

The Regents, who approved the preliminary plan late last month, plan to sponsor a series of meetings this fall on the recommendations. They have also given the state education department authority to draft proposed legislation, regulations, and budget requests.

Minnesota's 435 school districts will share $123,000 that the state collected from court settlements with four companies accused of fixing prices of school art supplies, a state official said last week.

In a civil antitrust lawsuit, the state had charged the Milton Bradley, Binney and Smith, American Art Clay, and Dixon Ticonderoga companies with "conspiring to set prices on art materials,'' resulting in higher costs for such supplies as crayons, paints, and clay.

The state's legal action followed an earlier settlement between the companies and the Federal Trade Commission, in which the companies agreed to pay more than $2 million to the 50 states, according to Sarah Mulligan, a lawyer in the antitrust division of the Minnesota State Attorney General's Office. (See Education Week, Oct. 26, 1983.) Minnesota received $67,000, including interest, from that settlement and an additional $56,000 from a separate settlement, according to Ms. Mulligan.

Schools will receive from $25 to $6,560 each, depending on enrollment.

Nine other states and New York City, which had also sued the companies, have reached separate settlements, according to Ms. Mulligan. The states are Connecticut, Kentucky, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Rhode Island, and Vermont.

Vol. 06, Issue 32

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