Portsmouth schools cite $1.3M rise in out‑of‑district special‑education costs; board asks for reinvestment of retirements

The Portsmouth School Department told the City Council on Monday that a projected roughly $1.3 million increase in tuition and related costs for out‑of‑district special‑education placements is a key driver of the school budget request for fiscal 2026.

“These placements ... are directed by individualized education plans,” Superintendent Zach McLaughlin said, describing IEP teams and the federal process that governs placement decisions. McLaughlin told the council the school department’s FY26 request — higher than the city manager’s proposal — repurposes some positions after recent retirements toward counseling, behavior‑based programs and intensive special‑education staff meant to reduce future out‑of‑district costs.

Why it matters

School officials and board members said the rise in out‑of‑district costs is largely a function of intensifying student needs and mandated placements that the district has limited ability to oppose. The School Board recommended a budget that would reinvest savings from retirement incentives into positions intended to keep more students in district — a strategy school officials argue can lower long‑run costs and improve student outcomes.

School board and public comments

School Board Chair Nancy Noveline Clayberg said the board “deliberated long and hard” and recommended what it believes is the best budget for students and staff. School board members who spoke during public comment reiterated that the board’s proposal is a strategic reinvestment of funds freed by retirement incentives to stabilize services such as counseling, paraeducator support and special‑education case management.

“Targeted roles that stabilize our schools and prevent much greater costs in the years ahead,” School Board member Byron Meadow said, explaining the board’s view that investments now can reduce expensive out‑of‑district placements later.

Parents, staff and community members urged the council to consider long‑term impacts. Carrie Nolte, a school board member and registered nurse who also works in community health, told councilors that positions proposed by the board — including a director of counseling and additional social‑work capacity — are “trusted adult” roles that support student well‑being and can help prevent escalations that lead to costly placements.

Clarifying numbers and constraints

- School department proposed total (as presented in the meeting): $65,900,000 (about 44% of the total city budget as presented). - Reported change in school request: increase of roughly $1,850,000 (about 2.89% in the presentation); McLaughlin said teacher and other school union COLAs are not included pending negotiations. - Reported out‑of‑district special‑education increase: roughly $1,300,000 (about a third of the growth in the special‑education category, as presented).

Councilors and public asked for concrete scenarios and cost models illustrating how in‑district investments might reduce out‑of‑district spending. School officials said they can provide non‑identifying example scenarios showing staffing and cost tradeoffs but noted privacy protections limit disclosure of individual case details.

Next steps

Councilors requested more detailed cost scenarios and asked the schools to return with examples showing the estimated costs to provide comparable in‑district services. School officials said they would work to provide scenario estimates and additional information on how proposed positions map to reducing future placements.

Ending

The school budget remains the most significant single portion of the proposed general fund and was the principal source of public comment at Monday’s work session. Councilors and school officials agreed to continue the conversation at follow‑up sessions before the public hearing next week.