Report shows that state, federal funding cover a fifth of services — taxpayers fund the rest
Although the state is bound to ensure and fund the opportunity for an adequate education for all students, including those with disabilities entitled to special education services, a report prepared by policy analyst Carly Prescott of the New Hampshire School Funding Fairness Project finds that state and federal funding amounts to less than a fifth of the cost of these services, while local property taxpayers bear the balance.
During the 2021-2022 school year 29,715 students, 19% of all those enrolled in public schools, received special education services at a total cost of $842.7 million, which represented 25% of the $3.4 billion spent operating public schools. In 26 of the state’s 162 school districts, special education costs accounted for more than 25% of educational expenditures. The average cost per student was $21,534, including transportation.
However, this figure obscures the effect of students receiving special education services who are melded into the average. On average, the cost of serving special education students was $44,488, though the cost for individual students ranges widely from a few hundred to many thousands of dollars. Discounting the cost of serving students with special needs reduces the average cost per student to $16,127. In other words, special education services represent an average additional cost of $28,361 for each student receiving them.
The report traces funding for special education to four sources. Federal disabilities programs contributed $48 million and Medicaid distributions $15.8 million. State catastrophic aid of $31.8 million reimbursed school districts for each special education student costing 3.5 times or more than the state average per pupil cost. Finally, the formula for distributing state aid to fund an adequate education allocated $61.4 million or $2,037 for each student entitled to special education services, which defrayed less than 5% of costs in most districts.
All together, funding from federal and state sources amounted to $156.9 million, or 18.6% of the total cost of $842.7 million. The balance — $685,754,769, or 81.4% of the total — is borne by local property taxpayers. On average, the state paid $3,136 for each special education student, or just 7% of the actual cost.
Prescott stresses the volatility of special education costs as the number of students entitled to services, as well as the menu of services they require, changes from year to year.
In Winchester, the cost of special education represented 45.6% of total expenditures in 2022, the largest proportion in the state. Between 2017 and 2022, total expenditures rose 19.1%, while special education expenditures increased 63.8% from $3.4 million to $5.5 million despite a 2.3% decline in special education enrollment.
During the same period in Wakefield — similar to Winchester, a small district with 500 to 600 students — total expenditures grew 29%, but special education expenditures jumped 107%, increasing from a fifth to nearly a third of all expenditures, as the number of special education students nearly doubled.
Prescott finds that, while special education costs have risen in their larger school districts, larger enrollments lead to economies of scale, which by lowering costs per student mitigate the impact of swings in expenditures.
For instance, the impact of one special education student is greater in a small district like Winchester or Wakefield than in Concord or Manchester. In the last five years, special education expenditures have remained around 25% and 26% of total expenditures in both cities, despite increasing 27% in Concord and 16% in Manchester.
“The state’s downshifting of responsibility to the local property taxpayer,” Prescott concludes, puts a strain on local communities and creates inequitable funding models and outcomes for students.”
On average, the state paid $3,136 for each special education student, or just 7% of the actual cost.
