Because of declining enrollment and a new state criteria that will reduce the number of students eligible for a special education category called Emotional Disability-Private, or EDP, the Payson Unified School District faces a potential budget shortfall of as much as $770,000 beginning in the 2001-2002 school year.
According to the district's 40-day count, which is subject to adjustment at the final 100-day count, the district is down 67 students from last year. Since the state pays the district about $3,400 a student, the reduction represents a potential loss of about $230,000.
Combined with the potential loss of $540,000 because of the reclassification of EDP students, the district stands to lose about 5.5 percent of its $14-million operating budget. Payson School Superintendent Herb Weissenfels said it is too early to speculate about how much must be cut from the budget or where those cuts will be made.
"At this point we are simply alerting our people to start thinking about a shortfall," Weissenfels said. "Absolutely no decisions have been made, but our overriding philosophy is that areas that get cut first are those that least directly affect our students."
That philosophy, Weissenfels indicated, means that the first cuts are likely to occur at the district office level, although he would not rule out a reduction in programs or in the teaching staff.
"Everything," he said, "is still on the table at this point," including the possibility of holding the district's first-ever override election. But he encouraged staff, parents and students alike not to speculate.
"We hope that if Proposition 301 passes, some of that money will help to offset the shortfall," the superintendent said. Proposition 301 would raise the state sales tax by six-tenths of 1 percent, or 6 cents on $10, to raise additional money for education.
In a memo to all district employees explaining the budget shortfall problem, Weissenfels said that passage of 301 would generate $175,000 that could be applied to the general fund budget, and possibly more. But he also said that he has "directed that each site and department look at what a 3-percent, 5-percent or 8-percent cut at their site or department would look like."
The special education budget problem arose when the Arizona Department of Education established for the first time specific criteria for the EDP classification guidelines which will put most of Payson's EDP students in a category that is funded at a much lower level. Before the new criteria were established, districts were allowed to make their own determinations regarding student classifications.
"Special education is broken into many sub-categories," Weissenfels said, "and each is paid for at a different rate by the state. The state's new EDP guidelines and our program no longer fit together."
In the budget memo to staff, EDP students are defined as "more severely impaired emotionally handicapped." According to the memo, programs for these students are "virtually residential in nature" and are "based on a teacher-student ratio of 1:10, plus additional aide support, plus access to intense psychological services."
Under the new state guidelines, students who are classified as EDP must be a danger to themselves or others and not be able to function in traditional public school classrooms. Other characteristics of EDP students, according to the state, now include severe depression, phobias, unmanageable aggression and other psychiatric disorders.
Because such students require special programs, small class sizes and highly specialized support staff such as behavior technicians, the state reimburses school districts at a much higher rate than for the category where most of Payson's EDP students will now be placed. That category, which the state calls ED, MIMR, SLD, SLI, OHI, includes students with emotional disabilities, mild mental retardation, specific learning disabilities, speech and/or language impairments, and other health impairments.
In addition to the $3,400 per year the state pays school districts for each enrolled student, it pays an additional "support level" for special education students. That level for students classified as EDP is currently 4.127 of the base of $3,400 or about $14,000 per student.
Conversely, those in the ED, MIMR, SLD, SLI, OHI category are funded at a support level of just 0.003 of the base rate. That works out to just $10 extra per student.
"The EDP student requires a much higher level of service," said Kenneth Macnab, PUSD's director of special services. "No more than eight to 10 students per classroom. You must have a behavior tech aboard. You must have consultation with a clinical psychologist. The state says that justifies the higher dollars."
While Payson currently has 48 students in the EDP category, that number varies widely around the state. The Mesa Unified School District, which is much larger than PUSD, only has 29. The Glendale Union High School District, on the other hand, has 82, while the Miami Unified District has only two EDP students.
The wide discrepancy in the number of EDP students statewide is one of the primary reasons the department of education decided to establish criteria.
"A committee was formed of education directors from around the state to come up with some agreeable criteria that could be used in determining whether or not students could be listed as EDP," explained Steve Mishlove, director of administrative services for the Exceptional Students Services Division of the Arizona Department of Education.
"The fact that PUSD has more EDP students than many larger districts does not suggest that the district is trying to cheat the system. That was never an issue.
"In fact," he said, "this is a statewide issue. We knew it was a problematic area because the law has never given a clear definition of EDP students. Given that fact, there was bound to be a wide disparity around the state."
Macnab was a member of the committee that worked on the new guidelines.
"It wasn't the program that we offered that was in question," he said. "EDP programs are intended to keep a child at home who would otherwise be in a residential treatment center. We have been classifying students EDP for probably 10 years."
As part of the new state guidelines, a district is required to create a "separate public program" for EDP students. That runs counter to the philosophy on which PUSD's current EDP program is based.
"Over the years we have developed what we believe is a good EDP model," Macnab said. "It is a school within a school concept. This is the first time what we've been doing has ever been brought into question."
The reason the EDP funding shortfall will affect the entire district operation is that it doesn't take the entire $540,000 the district received for its EDP students to fund that program.
"It is an expensive program," Weissenfels said. "It requires a large number of psychologists, educational specialists and support personnel. It requires special transportation.
"But most of these EDP students participate in the mainstream program to some degree as well, and that's why a lot of the money we get for them is put into the general operating budget. And we certainly don't intend to do away with our EDP program."
How many of the 48 students will qualify as EDP students under the new state guidelines? "We probably have about 13 who would fit the new guidelines," Macnab said. "The numbers will be drastically lower than they were before.
"The program that we offer, we feel, is superior to the model now being set forth by the state. The model the state has, as I see it, says, 'I don't care about the child, per se. If you behave this way, you will go here.'
"We have an entirely different model; the focus is entirely different. We have a child focus as opposed to an institution focus.
"The state's model is more punitive in nature. It's, 'You can't handle it here, so I'm going to put you here. You can't handle it here, so I'm putting you here.' And the light gets dimmer and dimmer, and pretty soon we're sliding gruel under the door.
"We say, 'The lights are on all over the place, and we want you out there in the real world because that's where it is.' We don't want to give up what we have for what they say you must do to draw down those dollars."
That's why Macnab agrees with Weissenfels' philosophy for district budget cuts.
"The district will pare down and do what it has to do without hurting kids," Macnab said. "We don't want to cut any programs that make kids feel like they belong to their school."