Board hears special education budget pressures: out‑of‑district placements and contracted services drive costs
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Summary
Special services staff told the board out‑of‑district placements, transportation and contracted services account for the largest shares of special education spending; the district has added psychologists and is using a mix of contracted and in‑house staff to manage costs.
Special services staff told the Bedford School Board on Nov. 17 that rising out‑of‑district placements and associated transportation are the largest drivers of special education expenses in the draft FY26 budget.
Director Melissa Gray and colleagues presented a new pie-chart analysis showing out‑of‑district placements account for about 41% of special services costs (staff cited this slice as roughly $2.7 million) with transportation about 23.7% (approximately $1.5 million). They said that, as of the presentation, the out‑of‑district estimate covers approximately 27 students (22 currently placed), and that some placements were initiated in the current fiscal year and therefore were not budgeted previously.
Gray explained that the district uses a range of responses — in‑district contracted tutors, vendor-contracted specialists, and placements at external day and residential programs — depending on student need. She cited the New England Center for Children (NECC/NEC) as an example of an external provider the district uses to provide BCBA and specialized staff. Board members pressed staff on predictability: some tuition and service invoices arrive late in the fiscal year (MST billing was cited), and the district maintains reserved fund balance to absorb those late charges.
Staff also discussed workforce shortages that increase reliance on contracted services, naming speech pathologist and speech assistant positions as difficult to fill. To reduce future contracted spending, Gray noted the district successfully hired three school psychologists this year — two replacing long-standing contracted roles — and said contracts include termination clauses (30–60 days) so placements can be shifted back in‑house when feasible.
Board members asked whether state funding and placement practices were shifting costs to districts. Staff said New Hampshire maintains a rate-setting approach for day placements, which gives some predictability; they contrasted Massachusetts placements as more variable and often more expensive. Staff said they work actively to maximize special education aid and Medicaid reimbursement to offset local taxation.
Staff will continue tracking known placements and reserved funding and will present more detailed tuition/contracted-service reconciliations at future budget meetings.
