Senate Bill S7638

                                BILL NUMBER:S7638

TITLE OF BILL:  An act to amend the education law, in relation to
providing an annual growth amount for the tuition reimbursement for
school age programs operated by in-state approved private schools for
the education of students with disabilities and special act school
districts

Purpose of the Bill:  To provide an annual growth amount, correlating
with New York State personal income growth, in the tuition
reimbursement rate for school age programs operated by in-state
approved private schools for the education of 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.