The Norwich Board of Education heard a sustained briefing Jan. 14 on mounting special-education costs, a midyear rate increase from a regional provider and how new in-district programs are offsetting some tuition expenses.

The district’s finance staff told the board that the state’s excess-cost reimbursement rate for Norwich dropped to 64.19% for the current year, “the lowest ever,” and that a major provider, EastCon, announced a 15% rate increase effective Jan. 6. “We will only get 64.19%, which is the lowest ever,” one district finance official said during the presentation. The official described the combination of higher provider rates and lower state reimbursement as a “major legislative fight” and a driver of an emerging budget shortfall.

The presentation explained why the change matters: districts receive state reimbursement for special-education expenditures under Connecticut’s excess-cost program, but that program’s appropriations have been capped for years and have not kept pace with rising provider costs. The finance presentation traced the program’s funding history and said the district budgeted conservatively at a 70% reimbursement level but now faces an effective rate well below that. The district’s staff said the shortfall this year is approximately $1.1 million compared with the level that would be needed to meet budgeted expectations.

Board members and staff described a sudden invoice-driven problem after the provider announcement. The finance presentation said: “They announced effective January 3rd they will be at 15% for the rest of the year,” and district staff said they were seeking invoices and documentation to determine precise impacts on Norwich’s year-to-date liability.

District leaders outlined actions already taken to blunt costs. The Rose City School, an in-district program opened in the fall for students who otherwise would attend costly out-of-district placements, has expanded to a second classroom and has grown from two to nine students; staff said bringing students into the Rose City School is both educationally preferable and reduces tuition payments to external providers. The finance presentation quantified a combination of reduced payments and avoided placements this year as roughly $662,000 to date. “For this year, the combination of actual expense reduction from not paying other places and avoiding spending new money is $662,000,” the finance official said.

Board members and administrators said the district is pursuing several strategies: (1) expanding in-house programs such as Rose City School to lower tuition outlays, (2) seeking clearer, more timely communication with partner institutions such as Norwich Free Academy about enrollment and billing changes, and (3) pressing state lawmakers to increase the excess-cost appropriation. The district also discussed exploring regional cooperative programs with neighboring districts as an alternative to paying escalating private-provider rates.

Administrators noted timing constraints: excess-cost filings are adjusted on March 1 and final state distributions depend on the legislature. The acting superintendent told the board that Norwich will press state leaders and appear at advocacy meetings in Hartford. “The governor said he plans to prioritize special education in his budget,” the finance presentation reported; district leaders said they will continue to press for additional state funding and other reforms.

The board scheduled upcoming public budget sessions and said staff will continue to update elected members as further invoice details become available.