As Families Look For Inclusive Schools, Texas’ Funding System For Special Ed Creates A ‘Perverse Incentive’

Families and researchers agree: Children with special needs often do better when they’re integrated in general education classrooms. But Texas gives schools more money if children with disabilities are separated from other children.

Ayaan Agha loves playing puzzles, but his autism makes it hard for him to communicate and socialize. His parents say his inclusive school — plus lots of outside therapy — have helped him progress in pre-kindergarten.

Stretched out on their living room floor, 4-year-old Ayaan Agha and his father Tab piece together a puzzle made up of numbers.

Ayaan calls them out as he fits them in their place: 12, 14, 2!

"Good job! Good job!" Ayaan says.

Ayaan is on the autism spectrum with moderate symptoms. He can do very complex puzzles, but he has limitations with his communications and social skills, Agha says.

What's made a big difference with his speech and social interactions is his pre-kindergarten class at Neff Early Learning Center, a Houston public school that offers early education through first grade.

There, Ayaan attends class with children of all abilities. He's not separated with other children with disabilities. And it's not just his class. The entire campus with over 600 students follows an inclusive model for education, where all children learn from each other.

Tab and Myhd Agha say they want their son Ayaan, 4, to have the same opportunity for a good education and independent life as his sister Jennah and other children.

"Yeah, these children have special needs and are learning from their peers, but their peers are gaining leadership qualities that they may not gain from another place," Agha says.

Ayaan's mom, Myhd Agha, says the other kids really care about her son, like when Ayaan was out sick last year.

"When he came back, his backpack was full of notes saying, ‘Oh, Ayaan, we miss you! Oh, Ayaan, we love you!' and drawings of the kids, so it's amazing," she says.


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What happens at Neff Early Learning Center is rare in Texas. All-inclusive schools can be expensive to run, in part because of how the state funds special ed. Schools get more money if children with disabilities are separated — and less money for integrated classrooms like Ayaan's.

Texas lawmakers have acknowledged special ed needs more funding and gave a small boost — 5% or $85 million statewide — to children with disabilities placed in general ed classrooms.

"I think that was a huge win. We haven't increased the weight since 1995," says state Rep. Mary González, a Democrat from El Paso. She worked on several special ed issues in the state legislature and has a sister with Down syndrome.

The legislature also created new dedicated funding for dyslexic students, as part of a broader school finance overhaul worth about $6.5 billion. And González says the state's Legislative Budget Board will study the special ed funding system.

"In the funding realm, we took huge advances, but I'm glad we're still going to study it because we still know, even with the increase in the weight, we're still not going to be where we are with the actual cost of special education," González says.

In fact, those fixes did nothing to address an underlying problem, according to advocates and special ed administrators: Texas still gives substantially more money to special needs kids who are in segregated classrooms, often more than twice as much through a series of weights, or funding formulas.

"We have sort of put our finger in the dike and stopped the leak," says Steven Aleman, a policy specialist with Disability Rights Texas. "But whether the whole dam is going to collapse is still a potential problem we’re gonna have to deal with."

“Perverse incentive”

If it sounds like Texas has a problem with how it pays for special ed, federal judges on the Fifth Circuit Court of Appeals would agree. Last year, the appellate court ruled that the state had illegally decreased its funding for kids with disabilities and failed to maintain the state financial support required by federal law to receive grants — leading to a $223 million federal penalty.

In his November 2018 opinion, Judge Jerry Smith blasted Texas for its weighted funding model that "creates a perverse incentive for a state to escape its financial obligations merely by minimizing the special education needs of its students."

"It was shockingly harsh and quite, however, satisfying that the Fifth Circuit recognized that we have a structural problem in our school finance system with regard to students with disabilities," Aleman says.

In the 13-page opinion, federal judges determined that Texas’ system for funding special ed “poses the potential for future abuse.”

State lawmakers have since committed to pay off the shortfall to the feds.

But advocates say the recent changes to the special ed funding formulas don't do enough to address the problems highlighted by the Fifth Circuit. Instead, Aleman says Texas should target funding more towards children's needs — and how intense their services are — not what kind of classroom they're assigned. He says that would actually simplify the finance system and promote integration.

"If we continue to base a system on where you are served, we believe that sort of creates a perverse disincentive to focus on including and integrating the student with a disability," Aleman says. "And, frankly, today [that] doesn't really recognize the expense, wherever the student is placed. Because the weights have been static for so long, they don’t truly mirror the costs associated with the student's services."

State Rep. Dan Huberty, R-Houston, and other House members held a press conference last spring to announce their school finance bill.

State Rep. Dan Huberty, the Republican from Humble who led school finance reform this past legislative session, pushed back on criticism and defended the changes that have been made.

"Can we do more? Absolutely!" Huberty says. "Don’t bring in the Fifth Court. I really don’t care what they say because we’re going to fix it the right way."

He pointed to several new changes: more money for children with disabilities in general ed classrooms; new funding for students with dyslexia; and overall, a massive boost to public education. Huberty says that should be enough for schools to start doing things he says they're already supposed to be doing.

"We know that we can do more specifically on special education. We know that — I have a special education child — I think it’s important for us to be able to do that," Huberty says.

But first, he says, he wants to see better results from schools with the new money they do have.

"When they start doing the things that they’re supposed to already be doing — and now we gave you money to do it — then … we’ll come back and talk next legislative session about how do we tweak it and where do we put more resources," Huberty says.

“I penny pinch a lot”

Principal Santrice Jones says she has to get creative and use donations to help stretch her budget and pay for a school-wide inclusive education model.

Still, at Neff Early Learning Center in Southwest Houston, principal Santrice Jones says it's hard for her to stretch her budget — even with the new funding increase — to cover the extra expense of inclusive classrooms.

Out of the 36 homerooms on campus, 10 integrate children with disabilities, whether that means a general education teacher plus a special ed teacher and assistant, or the general ed teacher and an assistant. Jones says those classrooms cost an extra $56,000 to $80,000 because of the additional salaries.

"To be very transparent, I penny pinch a lot," Jones explains. "The first thing that I do when I'm setting up my budget is I look at personnel because my staff is what's going to make this program run."

Then Jones gets creative and looks for outside donations, which often come from the Sharpstown community and business groups. She estimates those extra donations add an extra $200,000 to $300,000 to her $2 million budget. While they don't pay for salaries, they allow her to free up other money in the budget.

Jones says it's worth it because research shows kids with disabilities generally do better when they're integrated. She compares the school's inclusive model to a mall when she talks with incoming families.

"We don’t have separated areas when we go to the mall — a mall for people with disabilities and people with abilities. Everyone is together," Jones says.

Ayaan's parents have seen the benefits and believe in them so much that they've gotten more involved in their school's foundation to promote inclusion for children with disabilities across the Houston region.

Myhd Agha says it's so important to start early in preschool because it sets the tone for children like her son for the rest of their lives.

"If you’re not including people with disabilities, once they become adults, they're going to be seen as the others," she says.

She wishes more Texas students could have the same opportunity her son does. But that’ll take funding changes from the state. And she worries that even at Neff, it's not perfect. The center only enrolls students through first grade.

She and her husband are still figuring out where Ayaan will go to school next — and if it will offer the same kind of inclusive, welcoming environment.

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