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Saturday, March 3, 2007 - Page updated at 12:00 AM

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Judge upholds state special-ed financing, rejects 12.7% limit on number of students

OLYMPIA — Washington's system of financing special education for more than 120,000 students has been upheld by a judge, but a lid on the number of the special-needs students has been thrown out.

Thurston County Superior Court Judge Thomas McPhee rejected claims that the state is violating the state constitution by shortchanging districts by more than $100 million a year. McPhee ruled late Thursday in a lawsuit brought by 12 school districts from across Washington, including four Eastside districts and Everett.

Representatives of the Eastside districts — Lake Washington, Issaquah, Mercer Island and Northshore — said they were disappointed by the ruling, but were hopeful state legislators would still consider increasing funding for special education, as well as general education.

The judge said the coalition of districts had not proved a financing gap and added that the courts typically won't second-guess the Legislature.

He did overturn a cap that limits districts to declaring no more than 12.7 percent of their students as special-education pupils. That designation means the district gets 190 percent of the usual basic-education grant from the state for the special-ed student.

Northshore School District will benefit from McPhee's ruling that it's unconstitutional to cap the number of special-education students the state funds.

More than 13 percent of Northshore's students receive special education, Northshore spokeswoman Susan Stoltzfus said.

That could mean an extra $400,000 for the district. But the money is short of the $6 million in levy dollars the district uses to cover the cost of special education, she said.

"The law requires we provide special education to students 3 to 21 years old," Stoltzfus said. "And that's more than just the cost of the teacher's salary. That's the instructional assistants, the bus drivers, the specialists and the principal who runs the school."

McPhee said legislators can easily fix the law, restraining growth while still providing "safety net" financial help for districts.

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A lawyer for the coalition of districts, Grace Yuan, said the districts will consider an appeal.

Yuan said the ruling could cost the state an additional $43 million annually to adequately cover the students in excess of the caps.

McPhee upheld the general system of state financing for special education, including the formula of paying nearly double for each special-ed student. The state's level is consistent with national standards, the judge said.

He said the districts didn't back up their contention that the state financing is woefully inadequate.

Although he threw out the 12.7 percent cap, the judge said it was a logical attempt to prevent districts from over-identifying students as special-ed pupils.

Gov. Christine Gregoire, anticipating the ruling, has been working with the Legislature to come up with a fix. The governor's budget has an additional $63 million for special education.

Carol Whitehead, superintendent of the Everett School District, said the lawsuit is having an immediate positive impact on Olympia, even if the entire system won't be revamped.

"We're hoping the Legislature will step up," she said. "The bottom line is that there are real costs out there to provide the high level of service and the districts are more strapped than we have ever been.

"The judge has not dealt with the real issue, which is that our system is underfunded. It is broken."

The 12 districts that brought the challenge were supported by Seattle, Tacoma and 70 other districts. Collectively, they serve about two-thirds of the state's special-ed students.

In a lengthy hearing last fall, their lawyers asserted that the state is at least $130 million short of meeting the bare minimum. Districts end up filling the gap with local property taxes, shortchanging other students and violating the principle that the state constitution requires the state to finance an "ample" basic education for all, said the coalition's attorney, John Bjorkman.

Assistant Attorney General Bill Clark defended the current setup, saying the state and local districts together fully meet the needs.

The current two-year state budget provides $1.38 billion in state and federal support for special education, roughly 10 percent of the K-12 budget of $13.8 billion. The state has 1 million pupils.

The Associated Press and Seattle Times Eastside bureau reporter Rachel Tuinstra contributed

to this story.

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