Defending The Schools Chancellor
By GREG FORSTER, senior research associate at the Manhattan Institute's Education Research Office.
July 15, 2004

This year, the New York Times celebrated July 4 with a massive article attacking Chancellor Klein's effort to reorganize the city's special education bureaucracy.

In fact, the malfunctions in the special education system identified by the Times have a lot more to do with problems that have always existed in the system than with anything the chancellor is doing. The system is broken because it creates perverse financial incentives that encourage schools to game the rules, not because Mr. Klein shuffled boxes around on an org chart.

The article was written by Times education columnist Michael Winerip. Its methods will be familiar to readers of Mr.Winerip's regular column: dig up some tragic stories, assert that your preferred villains are to blame, and insist that the problems will go away if only we pour in even more taxpayer money.

Thus we are introduced to some special needs children who have had disastrous problems with the special education bureaucracy. One child wasn't tested for admission to special education for a year because his paperwork wasn't processed. One mother was excluded from a meeting to discuss what services her son should receive. One school lost its paperwork for a hundred students.

We also meet special education bureaucrats who must now handle bigger workloads. Not surprisingly, they tell us that the system is falling apart because of the excessive workloads placed on special education bureaucrats.

No doubt it's a bad thing when the special education system fails. But the system was rife with these problems long before Mr. Klein arrived - indeed, the special education system is a notorious mess nationwide. Mr. Winerip might just as easily blame Mr. Klein for the weather.

Of course, no Winerip article would be complete without demands for more money. "The city's special ed system has long suffered from lack of resources," he asserts. Never mind that in 1999, the most recent year for which data are available, a whopping $13,000 in special education money was spent on each New York special education student.

This is on top of regular education spending, which in New York is now well over $12,000. That makes New York the biggest-spending state for both regular and special education.

A large majority of special education students have mild diagnoses like learning disabilities or speech impediments - things that shouldn't cost $13,000 to treat. Children with learning disabilities alone make up half of all special education students, and each of those learning-disabled students brings in a total of over $25,000 to his school.

So what's causing the problem, if not Mr. Klein's reforms or lack of money? In most states, including New York, special education is set up so that schools get bigger budgets when they diagnose more pupils as disabled.

By attaching a "special education" label, schools can get the state to pay for services they would have provided anyway. That's why the percentage of kids placed in special education has exploded from 8% to a stunning 13% in the past quarter century. In New York, 12% of all children are in special education.

So the most prominent charge in Mr. Winerip's article - that Mr. Klein is cutting back on the number of new diagnoses - is actually a virtue. If Mr. Klein can stop schools from inflating their budgets by slapping disability labels on so many pupils, more power to him.

Another charge made by Mr. Winerip is that Brooklyn officials ordered sweeping cuts in special education services. "If the child was getting speech [therapy] three times a week, we were to lower it to once or twice," a school psychologist, Florence Manglani, told Mr. Winerip. "Occupational therapy three times - make it once."

The officials deny this, but it's plausible. That's another problem with special education: once kids are in the system, the amount of additional money the school gets has little to do with services provided.

That means schools have an incentive to put lots of pupils in special education, but serve them as little as possible - disability diagnoses generate money, but services cost money.

This has nothing to do with Mr. Klein's reforms; he didn't invent this perverse funding system, and his reforms won't change it. But there are two strategies that have proven successful.

Sixteen states have reformed the funding system so it can't be gamed, and they've seen much less growth in special education enrollment. And Florida has a successful voucher program for special education students, letting families walk away from schools that don't serve them and seek better services elsewhere.

Mr. Winerip should quit blaming Mr. Klein and open his eyes to a system that keeps kids trapped in schools that have an incentive to label them, but not to serve them.

If Mr. Winerip is really interested in fixing special education, he should promote funding reforms and school choice. Don't hold your breath.