Special-Needs Grants Would Save Money for Virginia Public Schools

Published August 1, 2007

An independent study released on April 27 shows the long-debated proposed Tuition Assistance Grant (TAG) program for Virginia students with disabilities would financially benefit the commonwealth’s public school systems.

The report, The Fiscal Impact of a Tuition Assistance Grant for Virginia’s Special Education Students, was released jointly by the Milton and Rose D. Friedman Foundation, Virginia Chamber of Commerce, and Thomas Jefferson Institute for Public Policy. The author finds the school system would gain an average of $11,943 for each student with a disability whose parents use TAG funds to choose another school.

Net Gains

The study, prepared by Dr. Susan L. Aud, a senior fellow with the Friedman Foundation, finds if Virginia offered a TAG of $5,000 to parents of students with special needs, “the average school division would gain a net fiscal benefit of $5,214 from revenue they would continue to receive even after the student departed, and an additional net fiscal benefit of $6,729 resulting from a reduction in special education costs.”

“This landmark study adds intellectual analysis to the parental choice debate and sets the record straight on Tuition Assistance Grants for students with disabilities,” said Michael W. Thompson, president of the Thomas Jefferson Institute, a free-market think tank in Virginia. “Opponents of helping these students have all too often resorted to vicious distortions that aren’t worthy of honest discussion. This study lays out the undeniable facts about the finances of TAGs for students with disabilities.”

Aud assumes that when a special-education student leaves public school through the TAG system, 15 percent of a district’s per-student funding under the federal Individuals with Disabilities Education Assistance program will no longer go to the public district. This estimate is the most conservative savings assumption that can be made, because even if a district’s special-education student population dramatically declines within a year, it is guaranteed to receive at least 85 percent of the funds it received the previous year.

Simple Math

Student funding in Virginia is based on 11 components of the state Standards of Quality established by the General Assembly. Once these total allowable costs are calculated, they are divided by the number of students in the school division. As a result, each public school student generates approximately the same amount of state revenue, regardless of whether the pupil receives special-education services.

While special-education students generate only slightly more state revenue than their peers, their education can be considerably more expensive. According to Aud’s research, if a student with special needs used a TAG, the local school system would experience a substantial reduction in costs, compared to the loss of state dollars, resulting in a significant financial gain to the school.

“Education funding, and particularly funding for students with disabilities, is complex in Virginia, and [it] benefits from dispassionate analysis in determining the best way to help kids,” said Hugh D. Kehoe, president and CEO of the Virginia Chamber of Commerce.

Legislative Debate

For three consecutive years, Senate Majority Leader Walter Stosch (R-Glen Allen) has sponsored legislation that would provide a TAG for public school special-needs students to attend a private school if their parents are dissatisfied with their educational progress. The scholarship amount is limited in the bill to the state share of the child’s public school education, and the maximum scholarship is set at $10,000 per year.

Participating private schools would have to be non-religious and licensed to teach students with disabilities. Fewer than 100 schools in Virginia currently qualify.

Senate Bill 1419, Stosch’s TAG proposal for the 2007 legislative session, passed the Virginia Senate but was defeated in the House Appropriations Committee on February 16 by a 7-13 vote.

One of the only alternatives currently available in Virginia to dissatisfied parents of a student with special needs is a due process hearing or a lawsuit, which can be quite expensive for the school district and parents alike.

Lori Drummer ([email protected]) is director of state projects at the Alliance for School Choice.

For more information …

The Fiscal Impact of a Tuition Assistance Grant for Virginia’s Special Education Students, by Dr. Susan L. Aud, published April 27, 2007 by the Milton and Rose D. Friedman Foundation et al., is available through PolicyBot™, The Heartland Institute’s free online research database. Point your Web browser to http://www.policybot.org and search for document #21462.