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Reading, MA: School officials want "rainy day funds" to address "unpredictable SPED costs"

Mar 24, 2023, Woburn (MA) Middlesex East: School officials look to special rainy day funds to manage unpredictable SPED costs

Reading school officials hope to join the likes of Burlington and Woburn by creating a rainy day account to better manage difficult-to-forecast special education expenses related to out-of-district placements.

During a meeting in late February, Reading’s School Committee voted unanimously to recommend passage of a Town Meeting article in May that will allow central office administrators to deposit a portion of leftover end-of-year funding into a new SPED stabilization account.

Presently, any money remaining at the start of a new fiscal year is turned back over to the town for deposit back into the community’s general fund.

The move comes as the School Committee, in trying to free up funding for other educational priorities in FY’24, is taking a gamble by reallocating a sizable portion of a financial cushion normally built into the budget to handle unanticipated SPED enrollments.

As explained by Schools’ Superintendent Dr. Thomas Milaschewski earlier this winter in his proposed $53.7 million budget, the draft spending plan calls for redistributing the SPED money at an opportune time, as out-of-district transportation expenses are currently forecasted to climb by a modest 3 percent in FY’24. Based on current projections, out-of-district tuition spending will also decrease next year from $4.5 million to $3.66 million.

“The district’s leadership team carefully examined the past practices for budgeting for special education placements. The practice has been to ensure that within each fiscal year’s appropriation, funding for tuition is sufficient to cover all current and anticipated costs and be responsive to address the unpredictable nature of this need for service,” the superintendent explained in his draft FY’24 budget proposal.

“Conservative budgeting and thoughtful spending combined within a projected decrease in out-of-district enrollment of students has allowed the district to…redeploy funds to support Tier 1 and 2 services districtwide,” his message continued, explaining that some of the cushion would be steered towards new K-8 math coaches, behavioral health heads, a new adjustment counselor, and other specialist stipends....

Because children can enroll into their local public education system mid-way through any given fiscal year, even the most conservative of out-of-district spending forecasts can be decimated by unanticipated SPED placements. In fact, annual tuition bills for single students commonly exceed $100,000.

For example, according to Bottan, Reading’s FY’24 budget still includes a $270,000 line-item for an unexpected placement in a residential program, $125,000 for annual tuition in a private day program, and a $75,000 hold for a collaborative school tuition.

Rising SPED costs

Reading’s push to create the new rainy day fund is being made as school officials in Burlington are sounding the alarm over rising out-of-district tuition costs.

Specifically, during a School Committee meeting in late February, Burlington Schools’ Superintendent Dr. Eric Conti warned that the state is letting out-of-district services providers increase annual tuition bills by as much as 14 percent.

Conti, who called for a closed door executive session to go over budget specifics, has suggested the School Committee should be appraised of several “special scenarios” that could impact FY’24 budget deliberations.

“We will go over the demographics and the needs facing the district. [An executive session is] needed due to the special scenarios I want to review with the School Committee,” he explained....

Overall, SPED costs account for 23 percent of all education spending in Burlington. Two years ago, Burlington’s total out-of-district tuition and transportation line-items amounted to a little over $8 million. Current out-of-district expenses in the town have since fallen to roughly $7.3 million.
In Woburn, which adopted a special stabilization account to manage unanticipated SPED costs in the spring of 2019, out-of-district tuition costs have risen dramatically since bottoming out during the first year of the COVID-19 pandemic at $3.5 million.

In fact, since FY’21, when outside tuition and districtwide SPED transportation expenses totaled a combined $5.3 million, the two line-items have soared to more than $12.35 million - or the equivalent of 53 percent of Woburn’s entire SPED budget for FY’23.

Last year, Woburn spent $8.7 million on out-of-district tuition and budgeted $2.85 million for special education transportation costs - including busing to the city’s neighborhood schools....

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