Office of the State Superintendent of Education
810 First Street, N.E., 9th Floor
Washington, D.C. 20002,
Attn: Jessica Morffi

RE: Title 5, Chapter A-28; Proposed Rulemaking

1. Timing-wise, it seems near impossible to alter our 2010-2011 programming late in the summer if these regulations are adopted. Our normal budgeting cycle allows between six and nine months lead time. For the state of Maryland budget packets are provided us in December of each year preceding the then upcoming school year (~nine month lead time). At the annual Maryland State Department of Education (MSDE) training non public schools (NPS) are provided notices if there might be changes in regulations affecting programming and rates. In Virginia, the LEAs and in many instances Community Service Boards, assume this responsibility. While practice varies, as a rule NPSs in Northern Virginia are provided notices in the spring prior to the following school year if there are expected changes in contracting and rates. Seemingly, governmental agencies in both states provide lead time and many months notice to allow NPSs to modify budgets and programming if necessary.
   
   
2. The rate-setting methodology proposed seems to be designed to hold some costs down, provide some baseline rates for common services and perhaps to provide a level of accountability. As all of this involves taxpayer money, it is exactly what a responsible governmental agency should be doing. However, there may be better ways to accomplish this and there may be some flaws in the proposed provisions and process.
   
   
3. In the bigger scheme of things, there is a great absence nationally with regards to understanding rates for NPSs that provide special education programming to LEAs and SEAs. There is no real science, no state of the art, and no substantial research defending rates, methodology one way or the other. Instead, practice varies, misconceptions abound and unfortunately some of this is quite harmful to all involved. In just our area, Maryland is going down a path that seemingly seeks to control growth of costs and lately has been attempting to homogenize some common core services and line item expenses (e.g., all NPSs could have a per student postage expense, all speech therapy provided would be in an acceptable range). This ‘quasi rate regulation’ can help in some ways as costs become better justified and defendable. However, there are shortcomings. A new program can enter the system, establish a rate based on its unique programming components and consequently provide its staff more competitive salaries and benefits, offer special programming and target a reasonable bottom line compared to other NPS programs. Programs already ‘in the system’ often struggle year to year as the SEA imposes caps on the tuition rates (which more than anything else drive the bottom line) and as caps are imposed on individual line items. In fact, NPSs currently are not permitted to offer their staff increases in salaries equivalent to those within the LEA jurisdiction in which they are located. This is a serious flaw. It is one thing to work towards identifying common ranges of acceptable rates for semi-universal line items such as utility costs, insurance, benefits and the like. However, to hold staff salaries to levels increasingly lower than their peers in area public school systems can lead to less qualified and less effective staff. I do not need to elaborate on the consequences of this nor the irony as students with very special needs absolutely need qualified and motivated teachers. An even bigger flaw is the notion that essential programming should and can be homogenized like rent, insurance and benefit costs. At the very heart of good programming for students with special needs, at the heart of the notion of a continuum, defining the history, strength and great contributions of NPSs, at the heart, lays the unique, divergent, creative, and often intensive programming NPSs bring to the table. The field needs heterogeneity in its NPS’ programming. Different programming works for different students. Moving towards common tuition rates is contrary to appreciating the uniqueness NPS’ programming provides. If anything, the ‘smorgasbord’ of NPS programming in our area works. By and large, programming exists for most students with special needs, including some with some very special needs.
   
   
4. A major flaw also may be trying to control costs via rate regulation or a quasi rate regulation method. The practice in Maryland as noted above seeks to contain costs and to homogenize certain costs. Virginia as an SEA abandoned this practice quite a while ago which can be very instructive. The biggest and most central issue for SEAs and LEAs involved in controlling costs has to be volume and capacity. Nothing drives expenses as much as the number of students needing very specialized and unique programming and the LEA’s ability to provide, when it can, a good portion of specialized programming itself given certain groupings. Some may not want to state this publically but many students with special needs simply cost more, sometime two to three times more. On a purely economic level, an LEA should provide as much specialized programming internally as possible given certain groupings and needs. Also on a purely economic level it is very much in the LEA’s interest to be able to outsource for certain outliers, special cases, unique needs and custom programming. Probably the best of both worlds is achieved when an LEA can offer as much needed programming internally and outsource effectively for specialized/ high incidence programming. This in fact seems to be what is occurring throughout the nation as special education and special education financing is evolving. In Virginia, most LEAs have good to very good capacity to provide much of the needed programming and then outsource for what is remaining. Coincidentally, it sure seems that the rates for NPSs and core services are lower on average in Virginia when compare regionally. Rate regulation was abandoned and instead of expected higher rates, lower rates evolved. As an aside of sorts, it is my opinion that most of the Virginia LEAs responsible for placements also assume the role of ‘educated consumers’.
   
   
5. Putting economics aside temporarily, NPSs have revolutionized special programming in our country and were around long before PL 94-142. NPSs responded to a need, developed creative and effective programming for so many students with so many varied needs. NPSs continue to grow and evolve and contribute to the field of special education like no other. The best of both worlds for an SEA is to appreciate and partner with the NPSs so that, bottom line, essential services can be provided all students with disabilities. This embraces the very nature of the law, good practice and has economic benefit.
   
   
6. The longstanding myth that NPSs cost more than programming provided by counterparts in the public sector is damaging. It absolutely is a myth and if anything research and practice has proven the opposite. However, one of the huge factors often muddying the waters is the ‘apples and oranges’ element when trying to make comparisons. The students an LEA refers for outside NPS placement have to be different- and in most cases likely have more intense needs. This alone has to lead to conclusions involving cost. I can provide much information in this area upon request.
   
   
7. I have perhaps minor concern, relatively speaking regarding truancy and absences as this may affect billing. NPS’s do not want income based on students that do not attend their programs. We do not want students enrolled that do not want to attend or do not attend for illegitimate reasons. However for some very real medical, personal and situational circumstances, students may need to be absent from school at times on a limited basis. For some students with special needs, the circumstances may need to take into account these needs as well. Life happens. Things do not always go as expected. Sometimes thing go very wrong. It seems it would be in everyone’s best interest if the LEA and IEP team made decisions about placement, payment and absences with all of this in mind. The LEA and not the NPS should terminate placements and billing in the event of unusual absences or when truancy may be developing into a problem. NPSs cannot operate programs based on modified income streams- less revenue when certain students might experience periods of non attendance. Obviously, we cannot pay our staff that way (based on how many students attend regularly) and if forced to modify our budgets in this manner, would have to increase the tuition rate to recover potential losses that might be due to attendance issues. Financially, that would be a more costly option than what is being proposed. Let’s have students enrolled or disenrolled but not semi-enrolled. Let’s have the LEA and IEP team make those decisions as they arise.
   
   

1. Partner with NPSs extensively. Most if not all are more than willing to work with the SEA and LEA to be good partners. We understand the issues of finance, the demands of the area economy and our place both on the continuum and within the market. A good model partnership between LEAs, SEAs and NPSs involves appreciating the position of each, the value and contribution of each, market place, role and ultimately working together. We cannot operate with rates being changed possibly in August when in some instances, for example in Prince George’s County Maryland, we open in August. Attempts to balance operating budgets within this model should not seek to do so by negating the very characteristics which define the NPSs: uniqueness, intensity, additional services and supports, very specialized programming and the like. This is really not so much of what drives costs and works against good and needed programming.
   
   
2. Absolutely demand transparency, accountability and defendable rates from us. We can supply independent audits, salary scales, financial statements, and results.
   
   
3. Turn to the NPSs to help build capacity. Being very blunt, NPSs know on the one hand this to some degree can be like cutting some business and consequently income but on the other we all know the lay of the land, the market within which we operate. NPSs grow, adjust accommodate and will continue to have a role in the world of special education. We can do so best by being good partners to the SEAs and LEAs.