House committee hears debate on differentiating special-education funding tiers

Representative Rick Ladd opened a public hearing on HB 563, a bill to change how New Hampshire’s adequacy formula funds pupils receiving special-education services. The bill would set a higher base adequacy component and create three differentiated categories tied to the proportion of time a student spends in general education versus more restrictive settings.

Ladd said the bill starts with a base cost per pupil that reflects recent budget projections and then layers differentiated aid for free-and-reduced-price-meal status, English-language learners and the three special-education categories. He described the categories as mirroring IDEA reporting: category A (students in general education 80% or more of the day), category B (less time in general education), and category C (students placed homebound, in hospital settings or in residential or out-of-district placements). Ladd told the committee the base per-pupil figure in the draft mirrors current fiscal-year projections and that any change in the base raises system-wide costs sharply.

Parents, attorneys and advocates gave extended testimony. Bonnie Dunham, a Merrimack parent, said her son benefited from inclusion and argued the bill as drafted would financially reward school districts for placing students in more restrictive settings. “That gives a tremendous financial incentive to place a child in a more restrictive environment,” she testified, and asked the committee to “recommend ITL” (inexpedient to legislate) unless the measure is changed to avoid incentivizing segregation.

Karen Rosenberg, policy director at the Disability Rights Center of New Hampshire, testified in opposition. She said the proposed placement-based tiers could “unintentionally” push students into more restrictive settings and stigmatize children who are labeled by placement. Rosenberg and other advocates recommended alternative approaches such as raising per-pupil funding for all students receiving special-education services or reworking catastrophic-aid reimbursement so districts receive funds sooner for very high-cost students.

Local-school and special-education administrators and advocates urged clearer, service-based accounting of costs. Kristen Manchuramani of the Special Education Advocacy Office said many inclusive placements can cost as much—or more—than specialized classrooms, because inclusion often requires paraprofessionals and related services. She told the committee that service-level costing would give a better signal than blunt placement categories.

Committee members and sponsors repeatedly stressed the measure was an opening position for a work session and that numbers remain under discussion. Lawmakers noted the bill does not alter catastrophic aid for very high-cost students (the program formerly called “Cat Aid”), a separate component Ladd and others said will be addressed in parallel work.

The hearing closed after members committed to further discussion in committee work sessions. Staff and several witnesses said they would provide cost samples and service-level estimates to help the committee calibrate the proposed weights.

Ending: The committee left the specifics of the categories and dollar weights open for the next work session, directing stakeholders and department staff to supply cost breakdowns that distinguish placement from actual service costs.