[Senate Hearing 107-526]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-526
 
     THE PRESIDENT'S COMMISSION ON EXCELLENCE IN SPECIAL EDUCATION
=======================================================================

                                HEARING

                               BEFORE THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION


                                   ON

 EXAMINING RECOMMENDATIONS OF THE PRESIDENT'S COMMISSION ON EXCELLENCE 
IN SPECIAL EDUCATION REGARDING THE INDIVIDUALS WITH DISABILITIES ACT OF 
                              1997 (IDEA)

                               __________

                              JULY 9, 2002

                               __________

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                                Pensions






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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

               EDWARD M. KENNEDY, Massachusetts, Chairman
CHRISTOPHER J. DODD, Connecticut     JUDD GREGG, New Hampshire
TOM HARKIN, Iowa                     BILL FRIST, Tennessee
BARBARA A. MIKULSKI, Maryland        MICHAEL B. ENZI, Wyoming
JAMES M. JEFFORDS (I), Vermont       TIM HUTCHINSON, Arkansas
JEFF BINGAMAN, New Mexico            JOHN W. WARNER, Virginia
PAUL D. WELLSTONE, Minnesota         CHRISTOPHER S. BOND, Missouri
PATTY MURRAY, Washington             PAT ROBERTS, Kansas
JACK REED, Rhode Island              SUSAN M. COLLINS, Maine
JOHN EDWARDS, North Carolina         JEFF SESSIONS, Alabama
HILLARY RODHAM CLINTON, New York     MIKE DeWINE, Ohio
           J. Michael Myers, Staff Director and Chief Counsel
             Townsend Lange McNitt, Minority Staff Director
                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                         Tuesday, July 9, 2002

                                                                   Page
Kennedy, Hon. Edward M., a U.S. Senator from the State of 
  Massachusetts..................................................     1
Branstad, Terry E., Chairman, President's Commission on 
  Excellence in Special Education, Washington, DC................     4
    Prepared statement...........................................     6
Gill, Douglas H., Chair, Finance Task Force, President's 
  Commission on Excellence in Special Education, Washington, DC..     7
    Prepared statement...........................................     9
Huntt, Douglas C., Chair, Transition Task Force, President's 
  Commission on Excellence in Special Education, Washington, DC..    11
    Prepared statement...........................................    13
Gregg, Hon. Judd, a U.S. Senator from the State of New Hampshire.    16
Harkin, Hon. Tom, a U.S. Senator from the State of Iowa..........    18
Roberts, Hon. Pat, a U.S. Senator from the State of Kansas.......    22
Murray, Hon. Patty, a U.S. Senator from the State of Washington..    25
DeWine, Hon. Mike, a U.S. Senator from the State of Ohio.........    27
Reed, Hon. Jack, a U.S. Senator from the State of Rhode Island...    29
Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama....    31

                          Additional Material

Response to questions of Senator Reed from Governor Branstad.....    36
Response to questions of Senator Clinton from Governor Branstad 
  and Douglas Gill...............................................    39
Response to questions of Senator Clinton from Douglas Huntt......    42
Response to questions of Senator Wellstone from Governor Branstad    44


     THE PRESIDENT'S COMMISSION ON EXCELLENCE IN SPECIAL EDUCATION

                              ----------                              


                         TUESDAY, JULY 9, 2002

                              United States Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 2:30 p.m., in 
Room SD-430, Dirksen Senate Office Building, Senator Kennedy 
(chairman of the committee) presiding.
    Present: Senators Kennedy, Harkin, Murray, Reed, Clinton, 
Gregg, Roberts, Sessions and DeWine.

                  Opening Statement of Senator Kennedy

    The Chairman. We will come to order. This afternoon we will 
hear testimony on the President's Commission on Special 
Education recommendations to strengthen the Individuals with 
Disabilities Education Act, IDEA, so that all children with 
disabilities in all parts of the country will receive the best 
possible education.
    The enactment of the Education for the Handicapped Act in 
1975 and the alter passage of IDEA began a period of needed 
progress in opening schoolhouse doors to millions of students 
with disabilities, providing children with opportunity to learn 
alongside their nondisabled peers and live independent and 
productive lives. Before 1975 more than a million children with 
disabilities received no educational instruction at all and 
countless others remained unaccounted for. IDEA has worked well 
to reverse long-standing and unacceptable policies and 
practices that denied opportunity for so many children with 
disabilities.
    As our committee considers the reauthorization of IDEA and 
the progress made under this important act, we all recognize 
that much remains to be done in order to achieve the goals of 
the act. As the commission report points out, children with 
disabilities now have access to education but they do not 
always have access to the quality of education they deserve to 
succeed in school and in later life.
    It is clear that improving the level of academic support 
and instruction available to children with disabilities 
requires adequate funding.
    For many years the Federal Government has failed to live up 
to the promise it made when IDEA when enacted to fund 40 
percent of the cost of meeting its requirements. As a result, 
students, parents, teachers and schools across the nation 
continue to be cheated on the resources that the Federal 
Government promised them almost 30 years ago. Clearly we can do 
better and we need to do better.
    We want to thank all of our witnesses here this afternoon 
for being with us. We want to welcome former Governor Branstad. 
Terry Branstad is the chairman of the President's Commission on 
Excellence in Special Education. Before serving on the 
commission Mr. Branstad was governor of Iowa for four 
consecutive terms. Education was a top priority of his 
administration. One of his accomplishments was building 
fiberoptics networks so that children across Iowa had distance 
learning opportunities.
    Mr. Branstad has demonstrated his leadership capabilities 
in several contexts. He has been chairman of the National 
Governors Association and Republican Governors Association and 
the Education Commission of the States.
    We have been joined by Senator Murray and I understand she 
would like to introduce our next witness.
    Senator Murray. Thank you very much, Mr. Chairman. It is my 
pleasure this afternoon to welcome Doug Gill to this hearing. 
Dr. Gill brings a wealth of experience and insight to both the 
President's Commission and this hearing as a former special 
education teacher, professor of education, educational 
consultant and State and local administrator. He currently 
serves as the State director of Special Education for my home 
State of Washington and has been a valuable member of 
Washington's Office of the Superintendent of Public Instruction 
since 1990.
    During his tenure as our State director, Dr. Gill has led 
the effort to revise Washington's funding formula for special 
education and create a safety net that supplements funding when 
district costs for special education exceed available revenues.
    Before becoming our State director, Dr. Gill was the 
director of a cooperative in Pierce County, Washington. Under 
his leadership that cooperative was so effective in improving 
post-school outcomes for special education students in 
vocational education programs that he received a national award 
for exemplary research.
    Dr. Gill has consulted in 28 States and British Columbia, 
has served on several State and national panels and has 
authored numerous articles and publications on special 
education. He received a bachelor of science in special 
education from Augusta College in Georgia, a masters degree in 
education from the University of Georgia, and a doctorate in 
educational leadership from Seattle University.
    Doug, I really want to thank you for joining us today and 
for all your work on the presidential commission but most 
importantly, I want to thank you today for your many years of 
ensuring that all of the children in our home State of 
Washington receive a quality education. I think your service 
and commitment really exemplify the reason we have come so far 
in improving education for children with disabilities and your 
leadership is going to help us continue that progress. So thank 
you very, very much for traveling all the way out here today 
and for your testimony and willingness to help us work through 
a very complex issue.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    We are joined by Senator DeWine, who I know wants to 
introduce Douglas Huntt and we will be glad to hear from him.
    Senator DeWine. Mr. Chairman, thank you very much. I really 
appreciate your giving me the opportunity to introduce my good 
friend and fellow Ohioan, Doug Huntt. Doug is a nationally 
recognized leader in disability policy and the employment of 
people with disabilities. With his education, his experience, 
his first-hand knowledge of disability issues, he is really an 
invaluable presence, Mr. Chairman, on the President's 
Commission on Excellence in Special Education.
    So it is a privilege for me to introduce Doug to the 
committee and tell my colleagues a little bit about Doug's 
background and his experience. He received his undergraduate 
degree in secondary education from Ashbury College, his masters 
degree in social service administration at Case Western Reserve 
University and his doctorate in social work from the Ohio State 
University.
    Additionally, Doug served as the chair of the Ohio 
Governor's Special Council on People with Disabilities from 
1991 to 1999. He has five years experience as director of the 
Family Mental Health Service in Wooster, Ohio and served as 
chairman of the Transition from School to Work Task Force on 
the President's Commission.
    Doug currently serves as a commissioner for the Ohio 
Rehabilitation Service Commission. In this position he helps 
facilitate the transition from school to work for people with 
disabilities. Doug also currently is serving as the executive 
director of Assistive Technology of Ohio. Mr. Chairman, this is 
a federally funded agency devoted to promoting policies and 
programs to ensure increased availability and affordability in 
technologies to people with disabilities.
    Ultimately Doug brings hands-on experience and unique 
perspectives to the President's Commission in his professional 
role and personal experience with his disability. Therefore, 
Mr. Chairman, I know he brings a great insight to the 
Commission and will be very helpful to our committee today.
    Doug, thank you very much for joining us and I thank all 
our other members, as well.
    The Chairman. We have been joined by Senator Gregg. We 
would welcome any comments that he might have.
    Senator Gregg. Thank you, Mr. Chairman. I would really like 
to hear from the Commission. I have had a chance to read their 
work and I just put a candy in my mouth so I am not going to 
talk.
    I would like to listen to you. I think you did a good job. 
What I have read is excellent and I look forward to having your 
input. It is nice to see Governor Branstad again.
    Mr. Branstad. Thank you.
    The Chairman. We are joined by Senator Harkin. We have had 
a formal introduction of Governor Branstad but we know that you 
wanted to extend a word of welcome and I recognize you for that 
purpose.
    Senator Harkin. Thank you very much, Mr. Chairman. I 
apologize for being a little late.
    And to our distinguished panel who is here, I did want to 
welcome all of you but I especially wanted to welcome my long-
time friend and colleague, even though we are on opposite sides 
of the aisle, Governor Branstad. I don't know how he was 
introduced but Governor Branstad has spent the better part of 
his adult life in public service. He served as a State 
representative from 1972 to 1978 and as lieutenant governor and 
then as the longest-serving governor in Iowa's history, for 
four terms.
    Senator Gregg. I think in any State's history, actually.
    Senator Harkin. Well, I do not know. I have never been in 
every State. I have not lived in every State.
    Senator Gregg. When I became governor he had been governor 
forever and when I left he was still governor.
    Senator Harkin. Well, he certainly set a record. I can tell 
you that. But I say publicly to Governor Branstad we worked 
together on getting what I think is the best state-of-the-art 
technology in education in the Iowa Communications Network. It 
continued Iowa's long-time role as a leader and innovator in 
education. We linked all of Iowa's schools, high schools, 
colleges, all together with the latest in interactive 
technology. It was no small feat and I thank you, Governor, for 
taking the lead on that and I was proud to work with you on 
that.
    So Mr. Chairman, I am just pleased that President Bush 
chose a fellow Iowan to head this Commission on Special 
Education. As you know, special education has been a long-time 
personal interest of mine. And while I may not agree with some 
aspects of the commission's recommendations, I look forward to 
working with you and with Governor Branstad and the Bush 
administration on a bipartisan basis to do what is right by our 
children with special needs.
    So again, Governor Branstad, we welcome you and I thank you 
for this latest public service that you have performed.
    Mr. Branstad. Thank you, Senator Harkin.
    The Chairman. Commissioner Branstad, we would be glad to 
hear from you.

STATEMENT OF GOVERNOR TERRY E. BRANSTAD, CHAIRMAN, PRESIDENT'S 
 COMMISSION ON EXCELLENCE IN SPECIAL EDUCATION, WASHINGTON, DC

    Mr. Branstad. Thank you. Good afternoon. Thank you, 
Chairman Kennedy, Senator Gregg, Senator Harkin, all of the 
senators, Senator Roberts, who I worked with back on 
agriculture debt restructuring many years ago, Senator DeWine, 
Senator Murray.
    It is an honor and a privilege for me to be here today to 
testify before this distinguished committee and to tell you 
about the work of this commission. This commission had a very 
talented and diverse group of people and I am very proud of the 
detail and quality of work that the commission has done.
    I am pleased to report to you that the President's 
Commission on Excellence in Special Education has finished its 
work. The commission met its July 1 deadline for transmitting 
its report to President Bush. This afternoon I will outline for 
you the commission's major findings and recommendations.
    On October 2, 2001 President Bush ordered the creation of 
the commission. In his executive order he made the following 
statement and I quote: ``The education of all children, 
regardless of background or disability, while chiefly a State 
and local responsibility, must always be a national priority. 
One of the most important goals of my administration is to 
support States and local communities in creating and 
maintaining a system of public education where no child is left 
behind. Unfortunately, among those at greatest risk of being 
left behind are children with disabilities.''
    The President charged the commission with studying issues 
related to Federal, State, and local special education programs 
in order to improve the educational performance of students 
with disabilities. The commission's effort represented the most 
expansive review of special education in the 27-year history of 
the Individuals with Disabilities Education Act. The 24-member 
commission held 13 open hearings and meetings across the 
country. At those meetings and hearings we heard from 109 
expert witnesses and more than 175 parents, teachers, students 
with disabilities, and members of the public. Hundreds of other 
individuals provided the commission with letters, written 
statements, and their research.
    Our report is entitled ``A New Era: Revitalizing Special 
Education for Children and their Families.'' There are three 
broad recommendations that form the foundation of the report. I 
am just going to hit on those and then move on to the other 
witnesses.
    Major recommendation number one: focus on results, not 
process. IDEA must return to its educational mission--serving 
the needs of every child. While the law must retain the legal 
and procedural safeguards necessary to guarantee ad free and 
appropriate public education for children with disabilities, 
IDEA will only fulfill its intended purpose if it raises its 
expectation for students and becomes results-oriented, not 
driven by process, litigation, regulations, and confrontation. 
In short, the system must be judged by the outcomes and the 
opportunities that it gives to each child.
    Recommendation number two: embrace a model of prevention, 
not a model of failure. The current model guiding special 
education focusses on failure, not prevention. Reforms must 
move the system toward early identification and swift 
intervention, using scientifically based instruction and 
methods. This will require changes in the nation's elementary 
and secondary schools, as well as reforms in teacher 
preparation and recruitment and professional development.
    And I want to just give an example of what we have done in 
Iowa because I think we are the only State that has done this. 
We have eliminated the IQ discrepancy test as a determination 
of eligibility. What that has been is a system where kids have 
to fail that test before they are eligible for special 
education. We did that about five years ago and it has worked 
well. This report recommends that be eliminated throughout the 
country. Put the focus on really the kids' needs.
    The third recommendation is consider children with 
disabilities as general education children first. Special 
education and general education are treated as separate systems 
but, in fact, share responsibility for children with 
disabilities. In instruction, the systems must work together to 
provide effective teaching and ensure that those with 
additional needs benefit from the same strong teaching and 
instructional methods being offered to every child through 
general education.
    Funding arrangements should not create an incentive for 
special education identification or to become a tempting scheme 
for isolating children with learning or behavioral problems. 
Each special need must be met using the school's comprehensive 
resources, not relegating students to a separate funding 
program. Flexibility in the use of all educational funds, 
including those provided through IDEA, is essential to meet the 
needs of every child.
    I am out of time so thank you very much.
    [The prepared statement of Mr. Branstad follows:]
                Prepared Statement of Terry E. Branstad
    Good morning. Thank you Chairman Kennedy for that introduction. I 
thank the Chairman, Senator Gregg, and all members of this Committee 
for the opportunity to testify before your Committee today.
    I am pleased to report to you that the President's Commission on 
Excellence in Special Education has finished its work. The Commission 
met its July 1 deadline for transmitting its report to President Bush. 
This morning I will outline to you the Commission's major findings and 
recommendations.
    On Oct. 2, 2001, President Bush ordered the creation of the 
Commission. In his Executive Order, he made the following statement.

          ``The education of all children, regardless of background or 
        disability, while chiefly a State and local responsibility, 
        must always be a national priority. One of the most important 
        goals of my Administration is to support states and local 
        communities in creating and maintaining a system of public 
        education where no child is left behind. Unfortunately, among 
        those at greatest risk of being left behind are children with 
        disabilities.''

    The President charged the Commission with studying issues related 
to Federal, state, and local special education programs in order to 
improve the educational performance of students with disabilities. The 
Commission's effort represented the most expansive review of special 
education in the 27-year history of the Individuals With Disabilities 
Education Act.
    The 24-member Commission held 13 open hearings and meetings across 
the country. At those meetings and hearings we heard from 109 expert 
witnesses and more than 175 parents, teachers, students with 
disabilities, and members of the public. Hundreds of other individuals 
provided the Commission with letters, written statements, and research.
    three broad recommendations form the foundation of this report.
    Major Recommendation 1: Focus on results-not on process.
    IDEA must return to its educational mission: serving the needs of 
every child. While the law must retain the legal and procedural 
safeguards necessary to guarantee a free and appropriate public 
education to children with disabilities, IDEA will only fulfill its 
intended purpose if it raises its expectations for students and becomes 
results- oriented-not driven by process, litigation, regulations, and 
confrontation. In short, the system must be judged by the outcomes and 
opportunities it gives each child.
    Major Recommendation 2: Embrace a model of prevention not a model 
of failure.
    The current model guiding special education focuses on failure, not 
on prevention. Reforms must move the system toward early identification 
and swift intervention, using scientifically based instruction and 
methods. This will require changes in the nation's elementary and 
secondary schools as well as reforms in teacher preparation, and 
recruitment, and professional development.
    Major Recommendation 3: Consider children with disabilities as 
general education children first.
    Special education and general education are treated as separate 
systems, but in fact share responsibility for the child with 
disabilities. In instruction, the systems must work together to provide 
effective teaching and ensure that those with additional needs benefit 
from the same strong teaching and instructional methods being offered 
to every child through general education. Funding arrangements should 
not create an incentive for special-education identification or become 
a tempting scheme for isolating children with learning and behavior 
problems. Each special need must be met using a school's comprehensive 
resources, not by relegating students to a separately funded program. 
Flexibility in the use of all educational funds, including those 
provided through IDEA, is essential.
    In closing, I want to briefly revisit the remarks President Ford 
made upon the signing of the Education for All Handicapped Children Act 
of 1975. He made the following statement:

          ``It contains a vast array of detailed, complex, and costly 
        administrative requirements which would unnecessarily assert 
        federal control over traditional State and local government 
        functions. It establishes complex requirements under which tax 
        dollars would be used to support administrative paperwork and 
        not educational programs.''

    More than a quarter century later, we know that IDEA has sadly met 
the expectations that President Ford set forth in 1975. At the same 
time, this Commission is optimistic our Nation can revitalize special 
education for children and their families. However, we will do so only 
through a focus on educational achievement, teacher quality, and 
rigorous research. Only then can the promise of no child left behind 
truly be fulfilled.
    Thank you. I will be happy to take your questions.

    The Chairman. We will ask our guests to summarize but I 
would ask the staff to turn this off. This is an important 
matter and we will hear from all of them.
    Please, Commissioner.

STATEMENT OF COMMISSIONER DOUGLAS H. GILL, CHAIR, FINANCE TASK 
    FORCE, PRESIDENT'S COMMISSION ON EXCELLENCE IN SPECIAL 
                   EDUCATION, WASHINGTON, DC

    Mr. Gill. Good afternoon, Mr. Chair, members of the 
committee, and a special hello to Senator Murray, who used to 
sit on our Special Ed Advisory Council in the State of 
Washington.
    My name is Dr. Douglas H. Gill and I am the State director 
of Special Education in the State of Washington. I was 
appointed to the President's Commission on Excellence in 
Special Education in October 2001. Upon my appointment I was 
also asked to chair the Finance Task Force component of the 
commission. Although our special task force hearing and public 
input session was held in Los Angeles on March 21, 2002, I can 
assure the committee that the topic of special education 
finance generated much discussion over the relatively short 
time line associated with the commission. I believe special 
education finance, or at least some implications for special 
education finance, occurred in every meeting and task force 
hearing held by the commission.
    The Special Education Finance Task Force recommendations to 
the president are based on five fundamental principles. These 
five principles were the result of distilling the often-
overwhelming volume of information we received and consequently 
served as filters for the finance recommendations included in 
the commission's report.
    The first fundamental principle of the Finance Task Force 
recommendations is that special education is a shared 
responsibility that should be proportionately shared by the 
community, the school district, State and Federal Government. 
However, crucial to sharing the fiscal responsibility for 
special education is a reliable calculation of what constitutes 
excess cost. Excess cost is a proportional share of the total 
cost for special education which can only be determined by a 
full and thorough accounting for all available revenues against 
all legitimate expenditures.
    The second fundamental principle is that students eligible 
for special education and related services are first and 
foremost, students in general education. As such, a student's 
basic right to special education does not in any way dilute, 
displace or diminish their basic right to general education 
revenues at the State and local level. The commitment of 
equivalent shares of State and local general education funding, 
as well as any local enhancements, should be adequately 
accounted for in the commitment of supplemental State, local 
and Federal funding associated with the provision of special 
education to eligible students.
    The third fundamental principle associated with the task 
force recommendations is that cost accountability is integral 
to program accountability. Reimbursement for past practice will 
simply reinforce past performance. Compensation for what most 
people would agree has been historical underfunding of special 
education is necessary but only represents a single step in a 
series of financial steps that need to be taken to ensure that 
indeed no child is left behind.
    The fourth fundamental principle is that financial 
constraints imposed by the Federal Government in the 
establishment of special education nearly 30 years ago may now 
serve to restrict the implementation of the program in an era 
of educational reform and increased accountability for results. 
If we expect more in terms of accountability for results, we 
should allow more in terms of the financial flexibility 
necessary to achieve those results.
    The fifth fundamental principle of the Finance Task Force 
recommendations is that there are growing percentages of 
children with complex medical, educational and service delivery 
needs who are not evenly distributed in the population. 
Enrollments of these children in local school districts, 
especially those in districts that are in rural and remote 
settings, present a significant disproportional financial 
impact for the district. The disproportional financial impact 
of such students should be recognized and compensated in such a 
way that it does not adversely compromise the local district 
budget or force local communities to choose between providing 
services to some at the expense of others.
    Over the past 30 years our nation has been witness to many 
medical, educational and social changes yet the delivery of 
special education services at the Federal level through IDEA 
has remained in a virtual vacuum. We have been so vested in 
maintaining that we forgot to grow and mature as a discipline. 
Procedural compliance has become an inconsistent and unevenly 
applied surrogate for accountability. Increased litigation, 
both founded and unfounded, threatens to dismantle the system 
that many of us have fought to create and leave both winners 
and losers bitter from the conflict.
    While financial recommendations cannot singularly save the 
system, significant conceptual revisions aimed at the 
improvement of special education finance can and will have a 
positive impact on establishing and maintaining excellence in 
special education. When taken in aggregate, the financial 
recommendations outlined in the commission's report should 
enable us to move the financial date in special education from 
one of underfunded mandates to one of reimbursement for 
results. The development and implementation of these 
recommendations over time will also identify and require other 
fiscal adjustments that will periodically need to be made so 
that special education remains the vital and viable program it 
was intended to be.
    [The prepared statement of Mr. Gill follows:]
                 Prepared Statement of Douglas H. Gill
                              introduction
    Good afternoon Mr. Chair, and members of the committee. My name is 
Dr. Douglas H. Gill I am the State Director of Special Education in the 
State of Washington I was appointed to the President's Commission on 
Excellence in Special Education in October of 2001. Upon my 
appointment, I was also asked to Chair the Finance Task Force component 
of the Commission Although our specific task force hearing and public 
input session was held in Los Angeles on the 21st of March 2002, I can 
assure the Committee that the topic of special education finance 
generated much discussion over the relatively short timeline associated 
with the Commission. I believe special education finance, or at least 
some implications for special education finance, occurred in every 
meeting and task force hearing held by the Commission. In addition, the 
Commission as a whole, and myself in particular, have received many 
copies of various position papers, letters, expert testimony, public 
testimony, e-mail, phone calls and voice messages during the course of 
our appointment. Synthesizing the volume and variety of input was 
clearly a formidable task. Thank you very much for the opportunity to 
share my thoughts, and the thoughts of many others with you today.
    The special education finance task force recommendations to the 
President are based on five fundamental principles. These five 
principles were the result of distilling the often-overwhelming volume 
of information we received, and served as filters for the finance 
recommendations included in the Commission's report.
    The first fundamental principle of the finance task force 
recommendations is that special education is a shared responsibility 
that cannot and should not be bourn solely by the family, community, 
school district, State or Federal Government. However, critical to 
sharing the fiscal responsibility for special education is a reliable 
calculation of what constitutes ``excess cost.'' Excess cost is a 
proportional share of the total cost for special education, which can 
only be determined by a full and thorough accounting for all available 
revenues against all legitimate expenditures.
    The second fundamental principle is that students eligible for 
special education and related services are first and foremost, students 
in general education As such, a student's basic right to special 
education does not, in any way, dilute, displace or diminish their 
basic right to general education revenues at the State and local level. 
The commitment of equivalent shares of State and local general 
education funding, as well as any local enhancements, should be 
adequately accounted for in the commitment of supplemental state, local 
and Federal funding associated with the provision of special education 
services to eligible students.
    The third fundamental principle associated with the task force 
recommendations is that cost accountability is integral to program 
accountability. Reimbursement for past practice will simply reinforce 
past performance. Compensation for what most people would agree has 
been historical under funding of special education is necessary, but 
only represents a single step in a series of financial steps that need 
to be taken to ensure that indeed, no child is left behind.
    The fourth fundamental principle is that financial constraints 
imposed by the Federal Government in the establishment of special 
education nearly 30 years ago, may now serve to restrict the 
implementation of the program in an era of educational reform and 
increased accountability for results. If we expect more in terms of 
accountability for results, we should allow more in terms of the 
financial flexibility necessary to achieve those results.
    The fifth fundamental principle of the finance task force 
recommendations is that there are growing percentages of children with 
complex medical, educational and service delivery needs who are not 
evenly distributed in the population. Enrollments of these children in 
local school districts, especially those in districts that are in rural 
and remote settings, present a significant disproportional financial 
impact for the district. The disproportional financial impact of such 
students should be recognized and compensated in such a way that it 
does not adversely compromise a local district budget, or force local 
communities to choose between providing services to some at the expense 
of others.
    These five fundamental principles guided the discussions and 
deliberations of our task force, and resulted in the final 
recommendations for special education finance that were proposed and 
ratified by the Commission on May 31, 2002. Hopefully, the 
recommendations will serve to stimulate some of the thinking 
surrounding the on-going quest for excellence in special education, and 
more importantly, the overall provision of special education and 
related services to more than 6.5 million school age children sometimes 
struggling, but always striving to succeed in our nation's schools.
                     discussion of recommendations
    There are six specific finance recommendations for special 
education included in the report. The recommendations could be viewed 
independently, but if so, would only represent temporary improvements 
to the current system of special education funding and finance. The 
recommendations are not intended as single steps. They are intended as 
a comprehensive set of investment strategies, that when taken together, 
result in meaningful financial reform. Coupled with meaningful program 
reform, financial reform can guide improved delivery of services to 
students well into the next decade without compromising the basic 
provisions of Public Law 94-142 and the subsequent revisions to the law 
over the past 30 years.
    The first specific recommendation of the Commission in the context 
of finance involves a two-step approach. Almost everyone who provided 
input to the Commission expressed a need for increased Federal funding 
in IDEA. However, most people also agreed that increased funding should 
be conditional. That is, conditional upon their perception that the 
Federal Government has reneged on their commitment of 40 percent of 
excess costs in 1975, and therefore they are entitled to more, 
conditional upon improved academic and post school results for 
students, and therefore they deserve more, or conditional upon the fact 
that simply because states and districts report spending more, they 
should get more. The finance task force concluded that the fiscal 
reality of special education is probably somewhere in the midst of 
those positions and therefore recommended that (a) Federal 
discretionary funding for special education should continue to 
increase, and (b) IDEA should establish a definable threshold of 
``excess cost'' funding based on current research regarding total cost, 
before artificially inflating the cost of special and general education 
with an additional infusion of new money. Unconditional infusion of new 
money into the special education system without any definable 
parameters will: (1) institutionalize current practice, (2) influence 
growth rates in special education, and (3) encourage states and 
districts to serve children with marginal needs through special 
education rather than general education programs and classrooms.
    The second recommendation in the finance portion of the 
Commission's report is that future funding increases beyond the 
definable threshold in the first recommendation, be linked to improved 
accountability for results. Implementation of this recommendation would 
unify special education with other recently re-authorized Federal 
education legislation, and more importantly, enable parents and 
families of children with disabilities to have more confidence in the 
academic and post school progress of their children toward definitive 
standards of success.
    The next two recommendations involve-changes in the use of federal 
IDEA funds available to states and local districts. The third 
recommendation is that Part B funds be targeted to direct services. 
This includes directing 90 percent of available Part B funds to local 
districts: The remaining 10 percent of Part B funds should be set-aside 
at the State level consistent with a set of national priorities and 
other important considerations necessary to achieve increased measures 
of excellence in special education It is important to note that the 
percentage expressions in the use of IDEA Part B funds be expressions 
of the total grant amount, and not be tied to the 1997 base plus 
inflation. The 1997 base plus inflation calculations are cumbersome and 
do not add any value to the distribution of funds that could not be 
accomplished within a generic percentage allocation.
    In addition to changes in the use of funds component of Part B, the 
Commission also recommends that funding for Part C and Section 619 of 
IDEA be proportionately increased in a concerted effort to consolidate 
and target early intervention efforts between the ages of birth and 6. 
Current research in a number of arenas underscores the effectiveness of 
early intervention efforts. These efforts should be acknowledged and 
reinforced in IDEA regardless of whether or not a state educational 
agency or a social services agency has been designated as the lead 
agency in a given state. A seamless system of early intervention is 
critical in the achievement of meaningful results.
    During Commission hearings, both invited and public witnesses 
reaffirmed many of the perceptions associated with escalating 
expenditures in special education: the greatest concerns about cost for 
local districts are derived from complex or high need children 
requiring expensive placements both within and outside the district. 
Critical shortages of qualified staff exacerbate this dilemma 
Presently, there are very limited provisions under IDEA that would 
provide State educational agencies with targeted resources to offset 
the fiscal impact on local districts of providing a free, appropriate 
public education to high need children with disabilities who are not 
evenly distributed in the population States and local districts may 
often choose not to expend their entire allocation of federal funds in 
a given year for fear that unanticipated expenditures may suddenly 
arise and implode an already tight budget with no legitimate avenue for 
relief. Therefore, the final two recommendations of the Commission 
regarding special education finance involve the creation of models that 
allow local districts to proactively prepare for incurring 
unanticipated fiscal obligations associated with the provision of 
special education, and funding the costs of exceptionally high need 
children.
    First, IDEA should allow local districts to retain a portion of 
their unspent Federal funds, and earmark a fixed percent of Part B 
flow-through funds at a local or regional level for the purpose of 
creating risk management pools. Second, IDEA should formalize the 
opportunity to develop a safety net process for high need children 
either as a ``first dollar'' obligation for states within existing Part 
B allocations, or as a required use of State level discretionary 
funding. The combination of risk management pools and safety net 
processes could have a profound impact on the world of special 
education finance. The opportunity to develop and implement risk 
management pools, and develop and implement safety nets for complex 
needs children, will allow special education to finally get ahead of 
the financial curve, and focus their efforts on providing services 
based on need, not negotiating services based on cost.
    Inherent in the discussions of altering the finance structure in 
special education is the need for valid and reliable research 
surrounding the-impact of the changes that are made. It is crucial that 
the Federal government initiate strenuous research that can clearly 
explain the complex and often confusing relationship between program 
and budget. Perhaps the most critical of these research questions 
involve the determination of the costs and necessary resources for 
student achievement of identifiable outcomes, and the impact of fiscal 
reforms in special education on the general education program and 
budget.
                                summary
    Over the past 30 years our Nation has been witness to many medical, 
educational and social changes. Yet, the delivery of special education 
services at the Federal level through IDEA has remained in a virtual 
vacuum. We have been so vested in maintaining that we forgot to grow 
and mature as a discipline. Procedural compliance has become an 
inconsistent and unevenly applied surrogate for accountability. 
Increased litigation, both founded and unfounded, threaten to dismantle 
the system of services many of us have fought to create, and leave both 
``winners'' and ``losers'' biter from the conflict. While financial 
recommendations cannot singularly save the system, significant 
conceptual revisions aimed at the improvement of special education 
finance can and will have a positive impact on establishing and 
maintaining excellence in special education When taken in aggregate, 
the financial recommendations outlined in the Commission's report 
should enable us to move the financial debate in special education from 
one of under funded mandates to one of reimbursement for results. The 
development and implementation of the recommendations over time will 
also identify and require other fiscal adjustments that will 
periodically need to be made so that special education remains the 
vital and viable program it was intended to be.

    The Chairman. Commissioner Huntt.

 STATEMENT OF COMMISSIONER DOUGLAS C. HUNTT, CHAIR, TRANSITION 
  TASK FORCE, PRESIDENT'S COMMISSION ON EXCELLENCE IN SPECIAL 
                   EDUCATION, WASHINGTON, DC

    Mr. Huntt. Thank you, Mr. Chairman, distinguished members 
of the committee. Thank you for the opportunity to appear 
before you today. I am honored to present these recommendations 
to a committee and chairman who continually advance the public 
policy cause of Americans with disabilities. Thank you, Mr. 
Chairman, for all that you have done on behalf of people with 
disabilities.
    I also want to thank Senator DeWine for your very kind 
introduction. I have the opportunity, being a Buckeye, to see 
all that you do on behalf of people with disabilities in Ohio 
and across the country and I thank you for that.
    It is my hope that we look back at this reauthorization of 
IDEA as a defining moment for increasing outcomes that include 
higher graduation rates and competitive employment for people 
with disabilities.
    I did not initially choose to become involved with the 
disability community. During my enlistment in the U.S. Marines 
I received a head injury that left me with a seizure disorder. 
My life was literally turned upside down. Although it was a 
time of turmoil, as I look back I am thankful that I did not 
have to deal with disability through the public education 
system. I know that I would not be before you today had that 
been the case. The stigma, lack of expectations, outcomes, and 
insufficient educational opportunities would have left me 
unable to attend college and work in the field that I have 
chosen.
    Because of IDEA, we have made significant strides in 
providing a public education accessible to people with 
disabilities. However, the door to successful educational 
outcomes and transition to competitive employment has remained 
inaccessible and tightly closed. There is an obvious high 
correlation between low graduation rates and high unemployment 
among people with disabilities. I believe that transition 
services provide the nexus between the two. As you know, Mr. 
Chairman, transition planning and services promote an outcome-
oriented set of services to facilitate a child's movement from 
school to post-school activities, including post-secondary 
education and vocational training.
    The committee's first recommendation is to simplify Federal 
transition requirements in IDEA. School personnel must be 
provided clear and concise rules and regulations outlining how 
to provide effective and relevant transition services to 
students with disabilities seeking to enter the workforce 
immediately following high school, as well as planning for 
college. The IDEA's current requirements are too complex and do 
not adequately meet this need. These provisions should provide 
clearer steps for integrating school and nonschool transition 
services and closely link transition services to goals in each 
student's individualized education plan.
    While some may argue that transition is already part of the 
IEP, our reading of the transition language in the Federal 
regulations leave us confused about what is required, when it 
is required, and who must be involved. Teachers, parents and 
students should not have to waste time interpreting terms and 
concepts.
    Second, the commission found that the overriding barrier to 
effective transition is the fundamental failure of Federal 
policies and programs to mandate interagency collaboration and 
funding. Multiple Federal agencies, policies and programs must 
be required to work together to improve competitive employment 
outcomes and increase access to higher education for students 
with disabilities.
    The funding for more focussed transition services now 
exists. Unfortunately, these funds are spread across multiple 
agencies. The question of who pays is the overriding barrier to 
transition services at the IEP level. States must be allowed to 
coordinate Federal funds from the various agencies into 
specific transition services that best serve each State's 
students with disabilities.
    Lastly, an executive order mandating existing agency 
coordination and pooling of existing funds will improve 
transition services.
    Given the correlation between vocational rehabilitation and 
special education, the commission's third recommendation for 
transition is the creation of a Rehabilitation Act 
Reauthorization Advisory Committee. The Secretary of Education 
should create an advisory committee modeled after the 
President's Commission on Excellence in Special Education, to 
examine reauthorization of the Rehab Act.
    Mr. Chairman, in conclusion, I believe the standard is 
clear. Special education is a failure if we do not prepare our 
children with disabilities to live independently in adult life. 
It is not only special education that fails but also we as a 
nation when children with disabilities leave public education 
for a life of dependency and poverty, imprisoned by the lack of 
necessary skills to live freely as an adult. Mandated 
interagency transition services will bring a wealth of 
resources to ensure that no child will be left behind.
    Thank you again, Mr. Chairman, for your work and the work 
of the Health, Education, Labor and Pensions Committee on 
behalf of people with disabilities.
    [The prepared statement of Mr. Huntt follows:]
                 Prepared Statement of Douglas C. Huntt
    Mr. Chairman and Distinguished Members of the Committee:
    Thank you for the opportunity to appear before you today to discuss 
the recommendations from the President's Commission on Excellence in 
Special Education's Transition from School to Work Task Force. I am 
honored to present these recommendations to a committee and chairman 
who continually advanced the public policy cause of Americans with 
disabilities. Thank you, Mr. Chairman, for all that you have done and 
continue to do on behalf of people with disabilities.
    I also want to thank President Bush for the opportunity to serve on 
this Commission and for his un-relenting and productive New Freedom 
Initiative and No Child Left Behind vision for Americans with 
disabilities. It is my hope that we will look back at this re-
authorization of IDEA as a defining moment for increasing outcomes that 
include higher graduation rates and competitive employment for people 
with disabilities.
    I did not choose to become involved with the disability community. 
During my enlistment in the US Marines, I received a head injury that 
left me with a seizure disorder. My life was literally turned upside 
down. Although it was a time of turmoil, as I look back, I thank God 
that I did not have to deal with disability through the public 
education system. I know that I would not be before you today had that 
been the case. The stigma, lack of expectations, outcomes, and 
insufficient educational opportunities would have left me unable to 
attend college and work in the field that I have chosen.
    I am privileged to appear before you today to discuss specific 
recommendations made by the President's Commission on Excellence in 
Special Education's Transition from School to Work Task Force. Because 
of IDEA, we have made significant strides in providing a public 
education system accessible to people with disabilities; however the 
door to successful educational outcomes and transition to competitive 
employment has remained inaccessible and tightly closed. We must not 
ignore the fact that the drop out rate among children with disabilities 
is twice that of children without disabilities and that over 70 percent 
of adults with disabilities are unemployed. We must not ignore the fact 
that people with disabilities remain the poorest of the poor, leaving 
public education unprepared for a life of unemployment and/or 
underemployment, limited to work in the food and filth industry or 
collecting monthly social security checks. There is an obvious high 
correlation between low graduation rates and unemployment among people 
with disabilities. I believe that transition services provide the nexus 
between the two.
                          transition services
    As you know, Mr. Chairman, transition planning and services promote 
an outcome-oriented set of services to facilitate a child's movement 
from school to post-school activities, including postsecondary 
education and vocational training.
    The Committee's first recommendation is to simplify Federal 
transition requirements in IDEA. School personnel must be provided 
clear and concise rules and regulations outlining how to provide 
effective and relevant transition services to students with 
disabilities seeking to enter the workforce immediately following high 
school as well as planning for college. The IDEA's current requirements 
are too complex and do not adequately meet this need. These provisions 
should provide clear steps for integrating school and non-school 
transition services, and closely link transition services to goals in 
each student's individualized education plan. While some may argue that 
transition is already part of the IEP, our reading of the transition 
language in the Federal regulations leave us confused about what is 
required, when it is required, and who must be involved. Teachers, 
parents, and students should not have to waste time interpreting terms 
and concepts.
    Secondly, the Commission found that the overriding barrier to 
effective transition is the fundamental failure of Federal policies and 
programs to mandate inter-agency collaboration and funding. Multiple 
Federal agencies, policies, and programs must be required to work 
together to improve competitive employment outcomes and increase access 
to higher education for students with disabilities. The funding for 
more focused transition services now exists. Unfortunately, these funds 
are spread across multiple agencies. The question of ``who pays'' is 
the overriding barrier to transition services at the IEP level. States 
must be allowed to coordinate Federal funds from the various agencies 
into specific transition services that best serve each state's students 
with disabilities. For example, The Social Security Reimbursement 
Program should allow for reimbursement to State vocational 
rehabilitation agencies for transition workers in the school. Lastly, 
an Executive Order mandating existing agency coordination and pooling 
of existing funds will improve transition services. Further, the bridge 
between Federal special education policy and rehabilitation policy must 
be strengthened.
    Given the correlation between vocational rehabilitation and special 
education, the Commission's third recommendation for transition is the 
creation of a Rehabilitation Act Reauthorization Advisory Committee. 
The Secretary of Education should create and advisory committee, 
modeled after the President's Commission of Excellence in Special 
Education, to examine the reauthorization of the Rehabilitation Act.
    Finally, the Commission's Task Force on Transition recommends that 
higher education faculty, administrators, and auxiliary service 
providers receive support to effectively provide and assist students 
with disabilities to complete a quality post-secondary education. 
Federal policies should support and hold accountable all post-secondary 
institutions receiving Federal funding for using evidence-based, best 
practice programs.
                               conclusion
    In conclusion, I believe the standard is clear: special education 
is a failure if we do not prepare our children with disabilities to 
live independently in adult life. -It is not only special education 
that fails but also we as a Nation when children with disabilities 
leave public education for a life of dependency and poverty, imprisoned 
by the lack of necessary skills to live freely as an adult. Mandated 
inter-agency transition services will bring a wealth of resources to 
ensure that no child will be left behind.
    Thank you again, Mr. Chairman, for your work, and the work of the 
Health, Education, Labor, and Pensions Committee on behalf of America's 
54 million people with disabilities.

    The Chairman. Thank you very much and we will have six 
minutes for the members to inquire of the commissioners.
    First, Governor, I would like to ask you about how we are 
going to get the high quality teacher, educator, for the 
special needs children. This is a key element in the No Child 
Left Behind, trying to get a well qualified teacher in every 
classroom in the country, and we have had a number of ways that 
we have tried to, both in terms of recruitment and professional 
training.
    Could you elaborate a little bit about what you think we 
could learn from the commission that might be of value to us as 
we look at this?
    Mr. Branstad. Chairman Kennedy, I would also point out the 
report is now on line at the Department of Education website 
and there are many ideas and recommendations in here that I 
think will help us both recruit, train, and retain quality 
teachers.
    One of the problems we heard from teachers was paperwork 
and the excess of paperwork and the recommendations that we are 
making in that area we think can help. We have heard that, for 
instance, the average special ed teacher is spending five hours 
a week on paperwork that could better be spent on working with 
kids.
    There needs to be a better job done in training general ed, 
as well as special ed teachers, about the needs of kids and 
this, I guess, would also go not just to teachers but to 
principals and administrators, as well, to understand the needs 
of children with disabilities, kids with emotional 
disturbances, and things like that, and how that can be 
effectively worked with.
    There are many good recommendations. We had some 
outstanding researchers on the commission and we heard from 
some outstanding researchers with ideas on how we can improve 
the preparation and retention of teachers but there is a 
tremendous turnover. There is a big shortage, as you know, of 
special ed teachers, and one of the reasons for it is because 
of the paperwork and the demands and we just have a high burn-
out rate in this area and we are losing too many good teachers.
    The Chairman. Well, it is about twice as high as it is for 
regular teachers and that is too high. So we will look forward 
to looking through those recommendations.
    Commissioner Gill, I wanted to ask you about the reading. 
The commission felt very strongly about the need to increase 
reading skills of those children who might otherwise be 
incorrectly identified as needing special education. Could you 
elaborate a little bit about what the commission recommended 
doing to increase the reading skills of children in special 
education?
    Let us take, for example, children that are mentally 
retarded. How do you see this recommendation actually impacting 
and affecting those children?
    Mr. Gill. Well, I do not know necessarily that the reading 
initiative, for example, would have a huge and significant 
impact on every child but I think there is certainly a 
significant number of children in special education who may, in 
fact, have benefitted from instructional interventions prior to 
their eligibility determination for special education, and I 
think that is the group that this is primarily targeted at.
    Obviously reading is an essential skill for everyone but I 
think the concern that I heard expressed as a commission is 
that there are significant numbers of kids who we might 
describe as curriculum casualties in the context of educational 
reform and increased accountability and high stakes testing, et 
cetera, that might be better served through general education 
classrooms and through reading support programs, as opposed to 
eligibility determination and entry into special education.
    The Chairman. What was your sense about the receptiveness 
about the increasing focus on reading generally? We have 
important provisions obviously in the No Child Left Behind. We 
have some interventions, a very limited but important program 
in terms of preschool children. What can you tell us as a 
result of the hearing that you had about reading generally and 
the kind of recommendations that you have with regard to 
special needs children?
    Mr. Gill. I think that the hearings we had and the 
information that we processed in this regard said that there 
are clearly research-based practices regarding reading 
improvement strategies for all kids that kids could certainly 
benefit from. And I think the issue that most of us were 
concerned about and quite a number of parents were concerned 
about in their public testimony is that sometimes kids in 
special education were not given the benefit of those 
preintervention strategies before they were automatically put 
in a special education program or determined eligible. So they 
felt like, and I would tend to agree with them, that at least 
we ought to try as best we can research-based preinterventions 
prior to determination of special education.
    The Chairman. Mr. Huntt, on the recommendations to give 
greater focus on the outcomes, on a culture of outcomes rather 
than a culture of compliance, this is obviously an important 
civil rights law as well as an education law. How did the 
commission balance between recognizing the protections which 
are necessary as a civil rights bill, as well as to try to deal 
with the education? What can you tell us about your 
conclusions?
    Mr. Huntt. I think that hits at the heart of what we were 
about, Mr. Chairman. Fundamentally there was no suggestion that 
we ever remove any civil rights whatsoever or any entitlement 
whatsoever, but the focus on outcomes really protects, I think, 
the child, ultimately his or her civil rights. We want to see 
that special ed works. If I had a child in special ed I would 
want that child to be able to succeed and to excel beyond the 
public education system.
    So the focus on outcomes is a way to measure that special 
ed is really working and to be able to tell parents and that 
child yes, this system is working and this benefits you and it 
does fundamentally ensure your civil rights.
    The Chairman. Senator Gregg.

                   Opening Statement of Senator Gregg

    Senator Gregg. Thank you, Mr. Chairman.
    Again I want to congratulate the commission for your work. 
I think you have contributed significantly to our base for 
making a decision here on how we reauthorize this very, very 
important piece of legislation. It is a piece of legislation I 
have a personal interest in, having been for many years head of 
a very large special education institution called the Crotched 
Mountain Rehabilitation Center in New Hampshire.
    So I find your emphasis on education to be excellent and 
your emphasis on outcomes to be excellent. I think that is 
exactly the right tone to set and hopefully we can accomplish 
that in the reauthorization.
    The issue--there are a lot of issues. There are so many 
issues it is hard to know where to start but one of the issues 
that I have always found difficult was alluded to, I think, by 
Mr. Gill, which is when the small towns have a child who is 
very involved and that child has to go outside the local school 
system or even stay inside the local school system if he or she 
can be mainstreamed, which is sometimes very difficult to do, 
the cost really is astronomical.
    Under present law you cannot pool--there is no risk pooling 
allowed with the Federal dollars but some States are doing risk 
pooling with their local dollars and I am wondering if you 
think we should create some language here which gives some 
flexibility to the funds coming back, as long as we maintain 
the integrity of those funds and we do not allow them to be 
skimmed off for administration, that would allow the Federal 
funds to create risk pools for communities that get hit with a 
child who has real serious involvement and high costs?
    Mr. Gill. Actually, those are two of the recommendations of 
the commission and I think two of the recommendations that 
speak to the notion of financial flexibility. I think we have 
to create scenarios in local districts and States where we can 
actually get ahead of the financial curve in special education, 
as opposed to always looking at a reimbursement model for past 
practice or whatever. And I think risk management pools create 
an opportunity to do that, as well as safety net pools, if you 
will, for extraordinarily high cost students that, in fact, 
have the outcome, if you will, of almost devastating a local 
district budget that is already pretty tightly wound by the 
time the school starts.
    So when you have unanticipated enrollment increases in a 
small district or even a large district, or you have an 
unanticipated student who shows up and requires a free and 
appropriate public education, sometimes local districts with 
very small revenue bases are not able to compensate for that 
without somehow reducing services to other kids somewhere in 
the system and I do believe the Federal Government has a role 
there and I believe they should exercise that role.
    Senator Gregg. Good, and I hope we incorporate that.
    Now present law has a 20 percent--once we hit the $4 
billion, you allow the local districts to use 20 percent of the 
money that is coming back to them for activities which they 
determine they need to use it for with total flexibility 
essentially.
    I notice your report did not comment on that 20 percent 
flexibility to the local communities. Did you have any input on 
that?
    Mr. Gill. Well, we did not really discuss that specifically 
as far as the 20 percent use of Federal funds where they can 
use that against their maintenance requirements, et cetera. I 
think the general feeling was that did not result in enough 
money to have much of a significant impact on the local 
district of any size.
    Senator Gregg. Well, it does free up some dollars, though.
    Mr. Gill. Yes, it does.
    Senator Gregg. One of the issues we have is what I call the 
infinity issue, which is that we have 40 percent that we have 
locked in, which is sort of like our college programs. Every 
time we increase our Pell grants or increase our student loans, 
we find all the colleges across the country increase their 
tuitions and we never catch up.
    How do we get to the point where when we get to 40 percent, 
which hopefully we will in the near future, we just do not find 
that next year we are back down to 35 because there have been 
such an explosion in costs as a result of all this new money 
flowing in?
    Mr. Gill. Well, I think that is clearly a concern that we 
as commissioners had. I do not think we had anyone who 
testified before us who even alluded to the fact that there 
should be a decrease in Federal funding. I think everybody 
was--that is one area upon which everybody agreed.
    But I think----
    Senator Gregg. I think everybody agrees on that.
    Mr. Gill. But what they also agreed is that increased 
funding was conditional. I think some people felt like the 
increased funding was conditional upon their perception that 
the Federal Government reneged on their promise of 40 percent 
of excess cost in 1975 and therefore they are entitled to more, 
conditional upon improved academic and post-school results; 
therefore, they deserve more. Or contingent upon the fact that 
they spend more; therefore they should get more.
    And I think it is the impact of all of those issues that if 
you go to a number, whatever it happens to be, 40 percent, 
without any parameters associated with that increase, I think 
you will get exactly what you have described. You will get an 
institutionalization of current practice, you will influence 
the growth rates in special education, and I think you will 
also encourage districts and States to serve kids with marginal 
needs through special education, rather than the general 
education programs and classrooms.
    Mr. Branstad. That is precisely what will happen.
    Senator Gregg. So you are saying we should do the reform 
before we lock in the spending?
    Mr. Gill. Well, I think those are things that have to be 
done in concert. I do not think you can do one without the 
other. That is why I think in my opening remarks I wanted to 
make the statement if I was not clear that fiscal 
accountability is integral to program accountability. I do not 
think you can separate those two issues. That is why I think we 
have, at least in our recommendations, linked those two things 
together in the first recommendation.
    Senator Gregg. Thank you.
    The Chairman. Senator Harkin.

                  Opening Statement of Senator Harkin

    Senator Harkin. Thank you very much, Mr. Chairman.
    I thank all of you for your public service in this 
endeavor, for all the hearings you had and the input that you 
gained from across the country. It will help us a great deal in 
our moving ahead toward the reauthorization next year of IDEA.
    I guess I have a couple of questions. First I want to say 
off the top that having worked for so long with parents and 
families with kids who are disabled and getting them into 
school and watching what they had to go through and everything, 
I do not think there would be one parent out there who would 
disagree that with the recommendation that special education 
students are general education students first and they must be 
looked upon that way, as part of our general education 
population out there.
    Second, I do not think any parent would ever disagree with 
the recommendation that we should look at results and results-
oriented. But therein lie some problems and I will get to that 
in a second.
    First of all, I want to get to the financing of it. Last 
year Senator Hagel and I sponsored an amendment to fully fund 
IDEA. We basically passed it in the Senate and it had an 
overwhelming vote, I think 60 some votes if I am not mistaken 
in the Senate. But we went to conference and it was dropped 
because the House objected and the administration objected. But 
the idea was to make it a mandatory funding.
    Again for too long, and I talk about my own State of Iowa, 
Governor Branstad, for too long these local communities have 
assumed a disproportionate share of the cost. It has a terrible 
impact on property taxes and property taxes are in many cases 
unfair taxes. They are not proportionate to a person's income. 
Especially if you have an elderly population, they may have 
older homes and they may pay more in property taxes but their 
income may not be very high. Then what happens is that that 
creates divisions in the communities and that has a negative 
impact on families of kids with disabilities who have to then 
fight in their local jurisdictions to get the funding necessary 
for their kids. So it creates a lot of friction out there.
    So we looked at the commitment that was supposed to have 
been there by the Federal Government to provide up to 40 
percent of the average per pupil expenditure, so we propose 
that we make it mandatory, that we put it on the mandatory 
budget side. We got support for this from governors. I think--
well, the National Governors Association supported it. I cannot 
say that every governor supported it but the National Governors 
Association, both Republican and Democrat, supported making it 
mandatory. We had support from the National Association of 
State Legislatures to make it mandatory. We had support from 
the National Association of School Boards to make it mandatory, 
and most education associations and families with kids. We had 
a broad spectrum of support to make it mandatory.
    So I guess I need to understand why this commission, what 
its rationale is, that we should not make it mandatory but 
should leave it discretionary.
    Mr. Branstad. Senator, I think the main reason why the 
commission did not recommend mandatory funding is we think this 
is a very important priority and we made a lot of 
recommendations that will require additional funding and 
addressing some of the concerns you expressed, like school 
school districts that have a child with a significant medical 
and special ed need and that can really cause real problems in 
that school district's budget, and we have, I think, specific 
solutions for those things.
    But on the issue of just mandatory funding, and I guess 
this comes from my experience of 16 years as governor, I 
remember when we had the State budget on auto pilot and 
basically we had more mandatory funding than we had funds 
available and we had to unravel that situation. Sometimes there 
is a situation where there is a need to set priorities and when 
you have a growing share of your budget on auto pilot mandatory 
funding, you do not have the flexibility to be able to do that.
    So we thought there were important issues to address. We 
did not--the commission did not feel that it is something we 
should advocate mandatory funding for. We thought we would be 
in a better position to make specific recommendations on trying 
to address some of the areas where IDEA could be improved.
    Senator Harkin. I appreciate that, Governor, but again here 
we get into that battle all the time, too. I mean how much goes 
for this part of education, how much goes to that part of 
education, and we struggle every year to try to get this up to 
the 40 percent level and we have not succeeded in doing so yet.
    Mr. Branstad. Well, you have made significant progress in 
recent years compared to what it was like before that.
    Senator Harkin. Yes, we are up to about 20 percent now. We 
are about halfway there. At this present rate we will get to 40 
percent, I think, sometime in the next 12 years, which for many 
people with kids with disabilities, is too long to wait.
    Mr. Branstad. And it could even be longer than that because 
of the costs to get the 40 percent keep going up, too. So you 
are right.
    Senator Harkin. What was the input that you received as you 
went around the country from other governors or State 
legislatures? Did you have input on this at all, on the 
mandatory versus discretionary? And what was the bulk of the 
testimony you received?
    Mr. Gill. Senator, the bulk of the testimony we received 
regarding the discretionary versus mandatory nature of special 
education was certainly a concern that I recall from testimony 
that if we look at the increased growth rate of special 
education, it correlates pretty well with the increased rate of 
funding for special education. So lots of people were 
concerned, and I think rightfully so, that as you again 
increase funding in special education without any kind of 
parameters, what you actually do is inflate the number of kids 
in special education.
    So the issue becomes are you reimbursing for what you 
should have done before or are you creating some sort of 
unintended consequence in what you are reimbursing for now, and 
I think that the decision and the discussion of the task force 
was to leave it as discretionary and let you folks determine 
whether you think it should be mandatory or not.
    Senator Harkin. Here again we have a chicken-and-egg 
discussion.
    Mr. Gill. That is true.
    Senator Harkin. It is chicken and egg. We say to people 
they need to hire special assistants for kids that are in 
public school that have disabilities. They need a special aide 
there. The poor teacher cannot cope with that. They are not 
trained to do it. And the school district says but we do not 
have the money. So they do not hire and we say to them do that 
and then we will provide the funding. That is chicken and egg.
    I mean if we provide the mandatory funding, then they are 
going to have the wherewithal to hire those special assistants 
to give the teachers the assistance they need in the classroom 
but if we do not provide the mandatory funding every year they 
do not know what the next year is going to be like.
    Mr. Branstad. I think there is also, and we talk about this 
in the report, a difference between high incidence disability 
and low incidence disabilities. The high incidence disabilities 
are not affected by the funding that Doug was talking about, 
whereas the low incidence disabilities, which would be more 
specific learning disabilities and whatever, when the funding 
goes up, the enrollment and participation in that tends to go 
up.
    So we talk about addressing that. I guess it is not a 
simple issue. It is one where we are basically saying the high 
incidence one, we think there needs to be essentially--I do not 
know if mandatory funding is the right term but there ought to 
be the Federal Government assuring that the funding is there so 
that local school districts do not get hit with a cost that 
they did not anticipate, but that in the area of the lower 
incidence, that just providing more money may not solve the 
problem because it may just drive up the participation in that 
and we need to be more specifically working on that to meet the 
needs of the individual student.
    Senator Harkin. But just one question, Governor Branstad. 
What recommendations did the commission make regarding schools 
accessing Medicaid funds? There we run into problems. I know in 
Iowa we run into problems all the time with schools 
participating in health services under the Medicaid program. 
That has to do with certain--different States have different 
laws on accessibility to those Medicaid funds.
    Mr. Branstad. Honestly, Senator, I do not think we 
addressed--we addressed a lot of issues. I do not think that 
that specific area of the interaction between--and maybe there 
is one--
    Mr. Gill. Could I respond to that?
    Senator Harkin. Sure.
    Mr. Gill. I think that is a very good question. I think one 
of the things that we did not put in because we did not really 
get beyond IDEA but I think that it is possible that Medicaid 
reimbursement dollars could, in fact, be a seed source for 
individual high-cost students or a possibility of a way in 
which to increase fiscal flexibility. We did not really feel 
comfortable getting into the Medicaid discussion at that point 
in time but I agree with you that certainly reimbursement for 
high-cost students who are Medicaid-eligible is, in fact, a 
funds source that could be used to offset the cost of complex 
needs kids, as well.
    Mr. Branstad. We did recommend improved coordination. There 
needs to be improved coordination in that area. We did not 
probably have the time to get into it. That in and of itself is 
a very complicated issue that could take a lot of time but 
there is clearly a need for additional improved coordination 
there so that Medicaid funds are available to meet the needs of 
those kids that are eligible.
    The Chairman. Just on this issue, would it be too much to 
ask your people at the commission to try to take a look at 
this? Because this really is an enormous problem and the 
communities have to go through extraordinary lengths to get 
these kinds of reimbursements and its put an incredible burden 
on all of them. We hear from so many. You have 40 or 60 percent 
who are Medicaid-eligible and it would be very helpful if you 
could--you have a lot of very good people and we would ask you 
to give us some guidance on this because this is a very, very 
important issue.
    Maybe we could see if you would be good enough to do so, 
Governor. We would ask the commission if you could give us at 
least some ideas.
    Mr. Branstad. On the coordination of Medicaid benefits.
    The Chairman. Yes, because you obviously listen to a lot 
and if you could give us just some general guidelines, as 
specific as you can but we will take anything you have.
    Senator DeWine.
    Senator DeWine. Senator Roberts.
    The Chairman. Senator Roberts.
    Senator Roberts. Mr. Chairman, I have a short statement I 
would like to insert in the record as a general statement, 
typically referring to your leadership and thanking the 
commissioners, thanking the president for the focus on the 
report. I would like to make it for the record if I might.
    The Chairman. It will be so included.
    Senator Roberts. I thought maybe ``without objection'' 
would be appropriate.
    Senator DeWine. He wants to read it first.
    The Chairman. I will have to check it out over here.
    Senator Roberts. I mentioned the name of Senator Kennedy 18 
times here. I thought maybe--
    The Chairman. It will be included in the record.
    [The prepared statement of Senator Roberts follows:]
                 Prepared Statement of Senator Roberts
    Mr. Chairman, Senator Gregg, thank you for holding this hearing to 
review the results of the report compiled by the President's Commission 
on Excellence in Special Education. I would first like to thank all of 
the members of the commission for their hard work and dedication to the 
field of special education. Second, I would like to sincerely welcome 
the members of the commission who are here to testify today, 
Commissioners Terry Branstad, Douglas Gill and Douglas Huntt. Your time 
and effort is greatly appreciated.
    The Individuals with Disabilities in Education Act is most 
certainly responsible for many of the significant gains and 
achievements made in recent years by children with disabilities. With 
the passage of this landmark legislation, children with disabilities 
are guaranteed equal education as their peers. IDEA has made it 
possible for all children to achieve academic success and transition 
into life after school.
    However, while IDEA has produced incredible results, some areas are 
in need of significant reform. First of all, federal funding for IDEA 
must be increased. With over 6 million students served under IDEA, 
schools are qualified to receive over $17 billion in federal funding in 
Part B. Unfortunately, in fiscal year 2001, schools received only $6.34 
billion, far short of the 40 percent full funding we promised to 
schools almost three decades ago. While we did increase funding for 
fiscal year 2002 to approximately $7.5 billion, it is still not enough.
    I am also concerned about the large amount of paperwork that is 
producing a major burden for teachers and schools. I cannot count on my 
hands the number of teachers, parents, and administrators who are 
discouraged by the amount of unnecessary paperwork that takes away from 
time spent with students. Many feel bogged down and request that 
paperwork be focused on the development and success of the child and 
not merely on compliance. I look forward to hearing the panelists' 
ideas for paperwork reduction, funding for IDEA, and other areas, such 
as teacher preparation and recruitment.
    In October of last year, I am pleased that President Bush made his 
commitment to special education public by establishing the President's 
Commission on Excellence in Special Education. After 9 months, 13 
public meetings, and hundreds of letters and written comments, the 
Commission compiled and produced ``A New Era: Revitalizing Special 
Education for Children and Their Families.''
    This report shares with all of us recommendations for necessary 
changes and improvements to IDEA. The combined experience of the 
members of the Commission is impressive and I look forward to hearing 
from the panelists.
    Again, I would like to thank Mr. Branstad, Mr. Gill and Mr. Huntt 
for coming here today to share their experiences with the President's 
Commission and their recommendations for the future of special 
education.

                  Opening Statement of Senator Roberts

    Senator Roberts. This reminds me of the TV ad some years 
ago where you have a fellow sitting in front of the table and 
about 25 telephones behind him. One rings, he picks up the 
phone and says, ``Yeah, I can do that. Thank you, sir.'' Then 
another ring and he says, ``Yeah, I can do that,'' and another 
ring, ``I can do that.'' Pretty soon all 25 are ringing and he 
looks the audience in the eye and says ``How am I going to do 
this?''
    I have been, along with staff, going over all of your 
recommendations, which are good ones, very comprehensive, nine 
findings, seven dozen recommendations of the findings, and for 
the life of me I do not know how you do this, unlike Senator 
Harkin, with the amount of money that we provide you and all of 
the paperwork burdens.
    I wrote down some concerns that I remember when I had the 
privilege of serving in the other body and we called this the 
granddaddy of all unfunded mandates. Obviously it was a 
responsibility and we have that obligation and had some real 
success but in too many cases it seems to me that local school 
administrators, especially the administrator, looks upon the 
idea knowing that it is the responsible thing to do and that 
they want to do it in an adversarial way.
    I do not know how many States are in deficit financing. I 
think there are 41. We are here, as well, but we have the 
printing press. They have cut teachers. They have cut programs. 
Our State tuition has gone up 25 percent. Much of that could be 
answered, it seems to me, with at least us honoring our 
obligation, our promise 30 years ago that we were going to fund 
this by 40 percent.
    So I just listed the things I was concerned about then and 
now. This is a long story. Funding, regulations, paperwork, the 
lack of quality teachers, although we do have some very fine 
teachers, but what happens down the road, and the 
paraprofessionals. We have a situation where some have 
indicated that in terms of the paraprofessionals we ought to 
raise the criteria obviously or the training. What happens is 
you give them training and they do not stay. They find other 
jobs because the pay is too low.
    Then something called trying to get the administrators 
involved. And then what on earth do we do with the liability 
question? My distinguished colleague to my right, Senator 
Sessions, has been very helpful in this regard on what happens 
when we get into liability questions and you have recommended 
something called voluntary binding arbitration. I sort of think 
that is an oxymoron. I do not know how you do voluntary binding 
arbitration. If that works, that is great.
    So now I have sort of read you my concerns here and I 
credit the report but I am worried here that if we do the 40 
percent and we tie in what I think Mr. Gill has indicated, a 
threshold of excess cost, tying those future funding increases 
beyond the threshold to improve accountability. We already have 
a mandate. I do not want son of mandate. I know we want the 
accountability; I think that is a very noble goal, a very 
necessary goal, but if we just add in more regulatory demands 
on top of that.
    And I note, Terry, you are talking about focussing on 
results, not on process. Then you get into the IEP, the 
individualized education plan. I am wondering what an effective 
IEP really might look like in Iowa and Kansas, really what it 
would be.
    Then I think it was Commissioner Huntt who said they were 
having some problems here and we might need some legislation.
    So after my rambling rose here in regard to my concern 
about IDEA, what role would Congress play in reducing the 
paperwork burden and getting the IEP straightened out and 
making sure that this is not mandate number two on top of 
mandate number one, knowing that I think every person on this 
committee at least supports the 40 percent? In a rare moment I 
supported a Harkin amendment. Tom is not paying attention to me 
right now but he will when he hears me say that. I voted for 
100 percent because I think it is an unfunded mandate but what 
specific role are you asking us to do to clear up some of the 
many recommendations that you have suggested? What is the top 
thing that you want us to do? Let us just go down the list. 
Terry, why do you not go first, other than the funding?
    Mr. Branstad. And you are keenly aware of the funding 
issue. I think what we want to do is we want to see the focus 
moved from process to results. We want the focus on the kids. 
We want to get the best result for every kid. We have come a 
long way in this country from 1975 in terms of providing access 
to education but what we are concerned about is what happens to 
these kids when they get out of school?
    Senator Roberts. Exactly.
    Mr. Branstad. Are they prepared for the world of work? Can 
they go on to higher education? And we are saying not enough of 
them. We can do a better job in that. And by focussing more on 
results, that is what we think you ought to be doing, is as you 
look at the reauthorization, how can we change this focus where 
it is on results and getting the very best for each kid, 
knowing each kid comes at it with different abilities but 
nevertheless, let us work with that kid to challenge them to 
achieve at the very highest level possible. That is what we 
want for every kid.
    Senator Roberts. Mr. Gill.
    Mr. Gill. I think you brought up a very interesting point 
when you mentioned that you thought maybe 41 States were in a 
deficit spending pattern and you could print more if you needed 
it. I think there is a very complex financial dynamic that 
exists in schools today, as opposed to 1975, and I think that 
is why we did not just want to focus on 40 percent, as if that 
is some battle flag that is going to particularly cure this 
issue. I personally do not believe it is. I think all of the 
financial recommendations need to be taken in aggregate to 
begin to fix the system, as opposed to patch the system.
    And I think 40 percent, without any particular parameters 
associated with that which create flexibility and deal with the 
very real problem that Senator Harkin already mentioned of an 
increase in complex needs kids, an increase in accountability 
and expectations for local school districts, and a decrease in 
the number of qualified staff out there to provide those kinds 
of services. I think that is a very volatile situation in which 
we need help from you, I think, in terms of giving us and 
districts some direction, some flexibility, some latitude to 
really begin to solve the problems in special education, as 
opposed to admire them.
    Senator Roberts. So it is not 54-40 or fight so much as it 
is take a look at the results and the specific funding 
increases that you have recommended here that produce the 
results.
    Mr. Huntt, I do not want to ignore you.
    Mr. Huntt. That is okay, Senator. Feel free to ignore me. I 
have been uncharacteristically quiet.
    Senator Roberts. You are a former Marine. Semper fie. Go 
ahead.
    Mr. Huntt. Thank you, sir.
    Mr. Branstad. As chairman of the commission I was accused 
of ignoring him many times.
    Mr. Huntt. That is right.
    Thank you, Senator Roberts. First of all, I would agree 
with Governor Branstad that the major issue we would like to 
see you take up is to tie funding with outcomes.
    Second, I think we need to maximize our resources. There 
are all kinds of great pieces of legislation out there that are 
actually increasing barriers rather than removing them. We need 
to tie in Ticket to Work. We need to tie in WIA, 
reauthorization of the Rehab Act and IDEA to maximize those 
resources, to streamline the resources, to have a seamless 
point of entry and wrap-around services for kids. Maximize 
those resources, get rid of the barriers. That is what I would 
like to see you take up.
    Senator Roberts. I want to thank all three of you. Thank 
you very kindly.
    Thank you, Mr. Chairman.
    Senator Harkin (presiding). Senator Murray.

                  Opening Statement of Senator Murray

    Senator Murray. Thank you very much, Mr. Chairman, and 
thank you to all of our witnesses for the excellent testimony 
and really for the tremendous amount of effort you have put 
into this report.
    I appreciate many of the commissioners' recommendations. I 
have some concerns about others. Some of the things that are 
labeled bureaucratic or burdensome in this report may actually 
serve a critical role for our students, so I think we need to 
be very careful about judging that. I have not seen any 
evidence that shows compliance by schools hinders success for 
children and I think we need to remember that the civil right 
to a free and appropriate education is paramount in this 
conversation and we have to do our part to make sure schools 
provide that for all students with disabilities.
    One issue that your report emphasizes is the importance of 
general education in ensuring a high quality education for 
students with disabilities. Many of you know that I have been a 
strong supporter of smaller class sizes, especially in the 
early grades, and the research proves what teachers and parents 
and students tell us, that smaller classes provide better 
behaved, more successful classrooms.
    I wonder if any of you would like to comment on the role 
that smaller class sizes in our general education classes might 
play in improving outcomes for children with disabilities.
    Mr. Gill. I guess I will certainly respond to that. I think 
one of the research findings, and I think we mentioned it 
earlier regarding in terms of the research-based interventions, 
it seems to certainly indicate that what you are saying is 
true. It is the intensity of the intervention in a reduced 
class size environment that seems to produce the greatest 
results in terms of reading gains, et cetera. I think it is 
that kind of practice or that kind of intensity that might, in 
fact, reduce the number of kids in special education and give 
them the opportunity to participate fully in a regular 
education environment and classroom.
    Mr. Branstad. In Nashville we heard from a researcher named 
Sharon Vaughan from I think Vanderbilt University, Peabody 
College of Education at Vanderbilt University, who has done, I 
think, some really outstanding research in this area. Basically 
her recommendation was before a child is put in special 
education we ought to be working in intensive programs with 
smaller class sizes or even pull out individual situations to 
help them get up to speed in reading. And a lot of kids can 
indeed catch up to their grade level in that kind of an 
approach and that approach ought to be used in kind of a 
seamless way.
    Senator Murray. So it would be preventive, actually. 
Smaller class sizes in our general education population could 
prevent misidentification for special education for some 
students.
    Mr. Branstad. Yes. But I think again not just smaller class 
size. Some kids need more than just a smaller class size. They 
need some specific special intervention to help them, as well, 
and we ought to go through that whole continuum before we say 
that this kid has to be in special education because it may be 
just with that kind of help and some kids it takes more help 
than others because different kids learn at different rates.
    Senator Murray. Commissioner Huntt, I understand you have 
worked to give children with disabilities the opportunity to 
use technology. The commission's recommendations touch on the 
need for tests developed using the principles of universal 
design and I appreciate that recommendation but I wonder why 
you addressed assessment only. I am concerned that student 
access to educational materials in general needs to be 
addressed. Maybe if you could comment, or any of our 
commissioners could comment on how our schools can or should 
use educational materials and technologies that are universally 
designed.
    Mr. Huntt. Thank you, Mr. Chairman, Senator. We briefly 
touched on the universal design question. We did not get much 
more specific on that. I think the use of assistive technology 
is extremely important to the success not only in school but in 
post-school activities.
    So whatever it takes then to increase access to assistive 
technology I think most people on the commission, if not all, 
would agree to that.
    Senator Murray. Any others?
    Mr. Gill. As I recall--I have not read the report obviously 
in its entirely and I was not on that particular task force, 
but as I recall it, universal design had a lot to do with the 
research to practice issue, as I recall, and I think the 
research to practice issue in terms of universal design is that 
you are not really focussing on a particular issue as a way in 
which technology could be enhanced but you are talking about 
universal access to technology, as well, so that when 
technology is designed, it is designed with a large variety of 
issues and abilities as part of the contextual design of that. 
That is my recollection of the conversation.
    Senator Murray. Dr. Gill, one other question. In your 
testimony you suggested that the States should retain no more 
than 10 percent of Part B funds and should be required to pass 
the rest on to local districts.
    Could you elaborate on why you recommended that change and 
how you see the States using their part of that fund?
    Mr. Gill. Well, one of the reasons I recommended that 
change, in concert with the other members of the task force, 
was that we felt like services should go to where the kids are 
first. And since they are in the local districts, I think the 
local districts would get the 90 percent----
    Senator Murray. I appreciate that, coming from someone who 
works at the State level.
    Mr. Gill. The other reason that we sort of recommended flat 
percents, as opposed to what is current in that you have the 
1997 base plus inflation, that, to me, I think is a very 
unnecessary calculation that you do not need to do. You could 
accomplish that with generic percentage application. Say we are 
going to flow 90 percent to local districts of all available 
funds. Two percent, let us say, would be held for State 
administrative purposes, 3 percent for some sort of safety net 
process, and 5 percent for State discretion, consistent with a 
set of national priorities identified in IDEA. I mean that 
would be one way to do it and not force States--when we look at 
the increases that we have had in our State of Washington, 
which is an 85 percent flow through State right now, and we are 
restricted to the 1997 base plus inflation, you know what I 
would say is give me 2 percent and I am going to wind up with 
more money than you are giving me now.
    Senator Murray. Thank you very much, Mr. Chairman.
    Senator Harkin. Senator DeWine.

                  Opening Statement of Senator DeWine

    Senator DeWine. Thank you, Mr. Chairman.
    This committee, our committee, of course, was directly 
involved in writing the WIA bill, the Workforce Investment Act, 
and I would like to maybe comment and start with you, Mr. Huntt 
because you have already mentioned it, and ask you a question 
about that and how that interfaces with IDEA.
    The commission report states, in part, ``The Workforce 
Investment Act limits adult education to individuals who are 
not enrolled or required to be enrolled in a secondary school. 
Thus a student cannot be enrolled in a secondary school and 
also be enrolled in adult education under WIA. Many students 
with disabilities who left high school before earning a regular 
high school diploma but who are still entitled to a free, 
appropriate education under IDEA are barred from receiving the 
services they need.''
    Do you want to elaborate on that? What is barring them and 
what do we do to fix it? Do we have a problem with IDEA? Do we 
have a problem with WIA? Do we have a problem with funding? 
Where are we?
    Mr. Huntt. Senator DeWine, I think that is an excellent 
question. If there is one term that I have learned in 
Washington, it is unintended consequences. I think that with 
some of the Federal legislation we have increased barriers that 
we wanted to remove.
    The fact is that we have a 30 percent success rate on 
graduating kids with disabilities from high school but then 
even though we want to see them employed afterwards, WIA comes 
in and they have indicated that there is a barrier now, that if 
the child leaves, drops out of school, that they are not 
eligible then for certain WIA services, and that is where that 
particular issue comes in.
    Senator DeWine. So it is a WIA problem.
    Mr. Huntt. It is a WIA problem but I think that there 
really needs to be a translation on what WIA really means with 
regard to transition from school to work, what IDEA means, and 
what the Rehab Act means. There is not a real clear 
understanding from people in the field on where the boundaries 
are, where the guidelines are.
    Senator DeWine. What do you mean there is not a clear 
understanding?
    Mr. Huntt. Mr. Chairman, Senator DeWine, we mentioned in 
the report several places where there is inconsistency on who 
does what. There was discussion in IDEA where transition 
services begin at 14 and certain requirements are there but 
then there is a different set of circumstances when a child 
reaches the age of 16. So which is it? And I think we just need 
to have a clear understanding of what the expectations are, 
especially in my committee, which is the transition from school 
to work. What is the requirement? And I think you fix it 
through this reauthorization process here, through IDEA.
    Senator DeWine. It may also be, though, that we have to fix 
part of it through WIA.
    Mr. Huntt. That is correct.
    Senator DeWine. Maybe it is both. Maybe it is one or the 
other.
    Any other comments from any other members on that? If not, 
I will move on.
    Mr. Gill. Okay, move on.
    Mr. Huntt. No, if you had a comment, that is fine.
    Mr. Gill. The only comment I wanted to make is that so much 
of this is all interactive and you do not touch one piece 
without the whole thing changing shape at times and I think 
sometimes we lose sight of the fact that these things do 
interact. They certainly interact at the local level in terms 
of policy, in terms of practice.
    Senator DeWine. It is the unintended consequences, as 
Commissioner Huntt said.
    Mr. Gill. Absolutely.
    Mr. Huntt. And Senator, it also brings up the 
recommendation of creating another task force to look at 
reauthorization of the Rehab Act because it plays into IDEA or 
it should play a greater part into IDEA, as well.
    Senator DeWine. More to come. Thank you very much. That is 
great.
    Let me ask another question. Your task force on transition 
recommends that higher education institutions need to provide 
assistance to students with disabilities to help them complete 
post-secondary education. Specifically you state that Federal 
policy should support and hold accountable all post-secondary 
institutions that receive Federal dollars. What does that mean? 
How would you specifically do that?
    Mr. Huntt. Mr. Chairman, Senator DeWine, we heard testimony 
from professionals in the field of higher education who felt 
that there was not a very good transition from school to post-
secondary education. There was not a tie of funding to 
outcomes. A student would leave high school and go into post-
secondary education and not have the support services that he 
or she may need to succeed and there was no tie to outcomes 
then from the Federal funding that that institution of higher 
ed would have.
    So this is a recommendation that provides for more training 
for professors in the university setting, for instance, on how 
to educate and work with people with disabilities but also ties 
outcomes to the funding. We want to see kids succeed in post-
secondary education.
    Senator DeWine. But you are talking about actual 
withholding of dollars?
    Mr. Huntt. Senator, I think it is more of an incentive 
rather than a withholding. We want to increase dollars where it 
is appropriate.
    Senator DeWine. Carrot as opposed to a stick?
    Mr. Huntt. Yes, sir.
    Senator DeWine. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Reed (presiding). Thank you, Senator DeWine.

                   Opening Statement of Senator Reed

    Let me thank the commissioners and your colleagues for an 
exhaustive and very thorough report which will be very valuable 
to all of us as we consider reauthorization. I particularly 
want to recognize Commissioner Huntt, who is also the CEO of 
Enable America?
    Mr. Huntt. Yes, sir.
    Senator Reed. We had a visit by Enable America up in 
Warwick, Rhode Island and it was a great event. Thank you, 
Commissioner Huntt.
    Let me raise a general question. The theme of the report is 
results, not process. I frequently observe, and not just in the 
context of special education but in many different areas, that 
we lock onto process when we have a hard time defining what the 
results should be. If you do not know what you want, develop a 
process and that will be what we measure, what we insist upon. 
And Governor Branstad, you have suggested the uniqueness of 
children in the system.
    We can talk about results but essentially what results are 
we talking about and who will set those results? Is it a 
measure of performance on a general test? Can you elaborate?
    Mr. Branstad. There is supposed to be an individualized 
education plan for each child and really if that works like it 
should, and what we found is that it works in some places 
better than others, but what we think is we really need to make 
sure that that is indeed what it is supposed to be--
individualized to meet the needs of that child and there are 
clear goals and outcomes that you want to achieve and you are 
measuring that. You cannot do that with one test and it has to 
be done in a collaborative way. The student and their parents 
need to be involved, as well as the teachers and administrators 
and the other specialists that are involved in the school. 
Everybody needs to be involved in that.
    And I think our concern is in some cases you get a conflict 
situation between the parents and the school and then what 
happens is it becomes overfocussed on the process so that the 
school district can defend itself in court, saying well, we 
went through and did all of these things that we are supposed 
to do, so we are okay, as opposed to really sincerely looking 
at are we achieving the very best we can for this child? And if 
what we are trying is not working, we had better try something 
different.
    Senator Reed. So you are not at all recommending or 
suggesting that we move away from the structure of IEPs?
    Mr. Branstad. No. We are just saying that process needs to 
be improved and there needs to be more clear outcomes. And I 
think in the transition area we are saying that there needs to 
be an involvement in setting employment goals and what happens 
after they graduate.
    It is a sad situation when we hear from school districts 
they have no idea what has happened to their kids after they 
have left school, and that is unacceptable.
    Senator Reed. Many times when the system has been 
criticized for too much paperwork it is the IEP. Then the 
second part of it is the adversarial relationship.
    Mr. Branstad. Right.
    Senator Reed. It seems again, from talking to educators and 
parents back in Rhode Island, that usually it comes down, the 
adversarial part, to either professional disagreements--a 
special education professional thinks that a different approach 
should be taken from the parent--or financial considerations, 
subtle, perhaps, that we just do not want to spend this money. 
It might be better for the child but second best will do.
    We all recognize that good parents are the best advocates 
and are the most knowledgeable about their children and they 
want the best for their children. Do you have any proposals to 
try to reconcile this difficulty if there is a professional 
disagreement or a financial situation and it is just the system 
cannot afford to send the child to the school a parent wants?
    Mr. Branstad. I think what we found is that some States 
have--I think we need to look at best practices and some have 
really developed some pretty good practices to really include 
and involve the parents in the process from the very beginning. 
In other instances the parents feel like they are an 
afterthought and they get invited to the meeting but there has 
been a premeeting that has decided everything and we have to 
get away from that kind of situation so that they really, truly 
are involved.
    We heard from a man who had been a principal in New York 
City who had done a tremendous involvement of his parents and 
even before school started when they went to the 
prekindergarten round-up thing in giving them basically this is 
what we expect your child to know when they start school, so 
that they involve the parents from the very beginning and this 
is what we are expecting from you and then what you can expect 
from us.
    So what we are saying, that collaborative involvement 
process and interaction between the school leadership and the 
parents is critically important for this to succeed.
    Senator Reed. Well, thank you, Governor.
    Dr. Gill, and my time is dwindling rapidly, the commission 
recommended increased funding for Part B, Part C and Section 
619 but there was no suggestion for Part D, which funds State 
improvement grants, professional development, and other 
activities that will, we hope, make the system better. Any 
rationale for not recommending?
    Mr. Gill. Actually, I think that was a recommendation that 
is included under professional development and was not 
incorporated under the finance structure per se because we felt 
like it was kind of an internal issue, but we certainly do and 
would support Part D funding. And I think as part of our 
finance recommendations, as a matter of fact, we strongly 
suggested that the research component of the financial changes 
that are contemplated or made in the system need to be 
evaluated, as well, to determine the impact not only on special 
ed but on the general education budget, as well.
    Senator Reed. Thank you, Mr. Gill.
    And a very, very quick question, Commissioner Huntt. You 
have talked a lot about transition of teenagers from high 
school to the workforce or to postsecondary education. What 
about those transitions for young kindergarten students with 
Head Start coordination, with coordination with private 
preschool? Is that something the commission thought about?
    Mr. Huntt. Mr. Chairman, we really did not talk too much 
about transition from different school age children except for 
the fact that we believe that early intervention is very key to 
success.
    Senator Reed. Thank you very much, Mr. Commissioner.
    Senator Sessions.

                 Opening Statement of Senator Sessions

    Senator Sessions. Thank you, Mr. Chairman.
    I am so glad that you have done this report. I think it is 
one of the biggest challenges we face in education. I have 
traveled Alabama extensively, been in probably 30 schools in 
the last two, two and a half years, and I try at each school to 
have some time with a group of principals, teachers, school 
superintendents, board members come by, and we come back to 
this issue almost every single time. It is on the front burner 
of school and education issues.
    And you know the thing that is particularly important about 
it for us is this is Federal. This is a problem we in the 
Federal Government cannot wash our hands of because we have 
required it, fundamentally. So it is incumbent on us if we care 
about education to improve IDEA. It will require more funding 
to try to meet the commitment we made to schools but in 
addition to that, teachers and principals are telling me the 
system is not working.
    One wonderful special education teacher with a masters 
degree, 14 years in the business, she said, ``Jeff, I am 
telling you what we are doing is every day trying to comply 
with regulations and avoid lawsuits. We have lost sight of what 
is important for the school and the children and education.''
    And you have said that in your number one point. I would 
just like to read it. I think it is important. ``IDEA is 
generally providing basic legal safeguards and access for 
children with disabilities.'' I agree. This is finding number 
one. ``However, the current system often places process above 
results.'' Exactly what I am hearing. ``And bureaucratic 
compliance above student achievement, excellence and outcomes. 
The system is driven by complex regulations, excessive 
paperwork, and ever-increasing administrative demands at all 
levels for the child, the parent, and the State education 
agency. Too often simply qualifying for special education 
becomes an end point, not a gateway to more effective 
instruction and strong intervention.'' One of the things you 
did not discuss is the discipline problem and I will not go 
into that today but that is on the front burner with teachers.
    But Commissioner Gill, I just saw the Washington Education 
Association survey of problems with IDEA and I thought they 
were pretty significant and made some real points that are 
consistent with what I am hearing. The Washington Education 
Association there, that is your teachers association, released 
the results of a survey of 4,000 special ed teachers and it 
reported that nearly two-thirds of the special education 
teachers in Washington State said they plan to stop teaching 
disabled students within the next five years. Sixty-eight 
percent said meeting the needs of Federal law is more difficult 
than three years ago. The teachers complained of personal 
safety concerns, massive paperwork requirements, endless 
meetings and uncompensated overtime. A third of the teachers 
reported they had been assaulted by students and have been 
concerned for their safety. When asked if a student poses a 
threat to themselves or others what is most likely to occur, 
there were many answers but 12 percent said nothing is done at 
their school. Only 29 percent of teachers reported receiving 
immediate support under the current system when they had 
students that were continually disruptive.
    So the challenge here is big. We had a superintendent from 
Vermont that said 20 percent of his school system's budget went 
to special ed. So I am glad you have challenged the system.
    Governor Branstad, you have been governor and had to deal 
with this at the high supervisory level, I am sure, in the 
State. Am I far off base? Do not we have a crisis? Can we not 
do better in Washington that would help the schools in every 
county and system in America?
    Mr. Branstad. Senator Sessions, you are right on target 
absolutely. And incidentally, I am impressed with the amount of 
people out there that really care and want to do something 
about it. We went all over the country, we held meetings of 
full commissioner task forces and we heard from a lot of 
sincere, caring people, many of whom were very frustrated with 
the system and with what it has meant to their kids or the 
impact that it has had on their school district.
    We had a short time frame but I think there are some very 
good recommendations that the commission has been able to come 
up with in this period of time and we hope this is a catalyst 
to really try to put more focus on results and improve the 
special education program for all the kids in this country.
    Senator Sessions. Commissioner Gill, do you think that this 
thing is sort of reaching a boiling point among the 
professionals in the business, that there is a growing 
frustration and that we are really going to lose a lot of good 
teachers if we do not do something better?
    Mr. Gill. Well, I think one of the issues and certainly one 
of the groups that I met with first and foremost upon my 
appointment to the commission was the Washington Education 
Association, as well as the Washington Association of School 
Administrators, and sometimes got a competing agenda but that 
is okay.
    I think the issues are real. People have asked me about 
well, is it a recruiting issue of teachers in special education 
or is it the fact that we are not producing enough? And I guess 
when I look at data in the State of Washington there are enough 
certificated staff in the State of Washington to provide 
special ed-related services for the 122,000 kids we have in our 
State receiving services, but the fact is they are not choosing 
to teach special education. They get their degree in special 
education, they get a certificate in special education, and the 
first opportunity they get they will jump to a regular fourth 
grade or regular fifth grade class because they feel absolutely 
overwhelmed.
    That may have a lot to do with their professional training 
and background. It may have a lot to do with the surrogates for 
accountability that you mentioned, such as paperwork, et 
cetera, or substitutes for real accountability. It may also 
have to do with the growing frustration, but I do not think we 
can renege on our commitment to students with disabilities; nor 
do we want to do that. But I think we have to begin to think a 
little differently about the provision of special ed-related 
services, as opposed to thinking the way we thought about it 
before.
    And I guess that is kind of the point that I was trying to 
make in my opening statement, that we have sort of become a 
system that has been so focussed on maintaining that we have 
not grown and matured as a discipline and realize that we are 
not in an initiation of services mode anymore that we were in 
1975; we are in an implementation of services mode now and 
things are a little bit different than they used to be and the 
dynamic is a little more complex.
    So I would agree that our teachers have very serious 
issues.
    Senator Sessions. It is very frustrating. I remember 
distinctly in September visiting a school that was an award-
winning elementary school and the principal was just superb and 
he told me about the first day of school they had made a 
decision that a child was in the main classroom, normal 
classroom, it had been 30 minutes a day the previous year and 
they decided that the child was not benefitting from the normal 
classroom, had a severe disability. There was an objection and 
the first day of school beginning at 4:00 till 7:00 there were 
15 people meeting in the conference room--lawyers, parents, 
teachers, counselors, educational experts--wrestling with 
whether this child--and the final result was that the child 
would stay in the regular classroom a quarter an hour a day. He 
did that, he said, to avoid litigation. They just could not 
afford to litigate this thing.
    So we have created regulations that empower and further 
litigation and we are often not reaching a best judgment about 
individually what is best for a child. Frankly, I think 
principals love children, teachers love children, special ed 
administrators and teachers love children and they want to do 
what is best.
    Governor, you mentioned voluntary, binding arbitration. Is 
that something you think could reduce the millions, the tens 
and hundreds of millions of dollars being spent a year in 
America on litigation over this act?
    Mr. Branstad. I think some school districts, some States 
have had success in that, some kind of mediation where both 
sides volunteer to submit it to arbitration. So I think it is 
important to look at best practices out there and what works in 
some places. As we went around the country, in my State we do 
not have as big a problem as I heard in some other places and I 
do not know why that is. I think has more to do with the fact 
that people have really tried to work things out and they have 
not had the big problems.
    Senator Sessions. I think sometimes there is a cottage 
industry of lawyers. In D.C., we passed some laws that 
curtailed it and it saved them $12 million in one year in the 
District of Columbia in legal fees.
    Mr. Huntt. Senator, if I may, we heard testimony that 
parents were actually having to take out second mortgages to 
get their kids the quality of education that they felt they 
needed. The fact is that most people who testified before our 
committee said that it is an adversarial environment when you 
go in for the IEP.
    So the idea of the binding arbitration was that both sides 
realize we are not going to try to out-spend one another but 
that we are going to come to the table to do what in the best 
interest for the child. I think as soon as we get to that 
point, the better off we will all be.
    Mr. Gill. And another suggestion was that mediation be 
available to parents and districts at any time, not simply as a 
prelude to a due process hearing. Here again I think what you 
are looking at is dispute resolution, which interestingly 
enough, one of the parents who had quite an impact on me at one 
of the hearings came up to me at a break and said, ``You know 
what? I would give up some of the procedural protections and 
safeguards afforded to me because I am not sure I understand 
them all, anyway, and I am not sure that when they give me 
notice four or five times a year that I ought to be getting it, 
but what I do understand is if they would guarantee me and show 
that my child is progressing from year to year in terms of 
academic achievement, I would give them back some of those 
procedural safeguards.''
    So I do not think it is a question that the parents are 
always intent on being adversarial but I think sometimes that 
adversarial nature has been forced upon them by a system that 
has failed to respond to the needs of their child. So I do not 
think it is an either/or question but I think it is both of 
those things interacting together, and that is probably the 
most enlightening point of this whole report and if we could 
have done it in a single recommendation we probably would have. 
It took a series of recommendations because it is going to take 
a series of fixes. There is not one thing wrong, there are 
multiple things wrong, but they can be fixed.
    Senator Sessions. Thank you, Mr. Chairman.
    Thank you for your report. It is time for us now under this 
reauthorization process to do what we are paid to do and this 
is a Federal rule, it is a affecting every school in America 
and I think we can make it better.
    Senator Reed. Thank you, Senator Sessions.
    Thank you, gentlemen, for your testimony this afternoon and 
for your excellent work on the report.
    Let me note that the record will be left open for two weeks 
for additional questions from members of the committee. And 
again thank you very much. The hearing is adjourned.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

   Response to Questions of Senator Reed From Governor Terry Branstad
    Question 1. Given your testimony and the Commission's emphasis on 
accountability, what is the Commission's position on how a parental 
choice system would be structured to ensure that private schools, if 
selected by parents, provide the same level of services, ensure the 
same civil rights, and measure and report outcomes as required under 
IDEA?
    Answer 1. The question of whether systems of parental choice meet 
the service, civil rights, and outcomes requirements of IDEA appears to 
presuppose that IDEA currently requires that IDEA funds be used 
exclusively to provide services that are consistent with the service, 
civil rights, and outcomes requirements of IDEA. That is not the case. 
For example, IDEA clearly provides that a child may be placed by their 
parent in a private school at the parent's own initiative with public 
payment for that tuition under IDEA section 612(a)(10)(C)(ii). Such a 
private school is not required to meet any of the service, civil 
rights, or outcomes requirements of IDEA. While this only occurs where 
the school has failed to provide a free appropriate public education 
for the child, it is a clear instance where IDEA currently pays for 
private school tuition without the school being required to meet those 
service, civil rights, or outcome requirements of IDEA.
    The same is generally true of children referred to private schools 
by local education agencies (LEA) under IDEA section 612(a)(10)(B). 
While the LEA must still assure a state that it is providing services 
to all children in a manner that is consistent with IDEA (including 
children placed in private schools), those private schools, as a 
technical matter, are not bound by the service, civil rights, or 
outcome requirements of IDEA, even thought the LEA may well be using 
federal IDEA funds to pay that tuition.
    IDEA also clearly intends for states and LEAs to pay for services 
that benefit children in private schools without the service, civil 
rights, or outcomes measures of IDEA applying to those private schools. 
The ``child find'' requirement under IDEA section 612(a)(3) applies to 
all children, including those in private schools. A state must ensure 
that all children with disabilities, ``are identified, located, and 
evaluated and a practical method is developed and implemented to 
determine which children with disabilities are currently receiving 
needed special education and related services.'' This, in some 
instances, may require states to provide identification and other 
services in private schools. Those services can be provided using 
federal funds but would not create an obligation on the private school 
to comply with IDEA's service, civil rights, or outcomes requirements.
    Finally, in 1997 Congress reaffirmed the obligation of states to 
serve children in private schools in a manner that is ``consistent with 
the number and location of children with disabilities in the state who 
are enrolled by their parents in private elementary and secondary 
schools.'' IDEA sec. 612(a)(10)(A)(i). IDEA requires that, ``[a]mounts 
expended for the provision of those services by a local educational 
agency shall be equal to a proportionate amount of Federal funds made 
available,'' under Part B, and that ``[s]uch services may be provided 
to children with disabilities on the premises of private, including 
parochial, schools, to the extent consistent with law.'' In these 
instances, IDEA clearly requires states to pay for or provide services 
to children in private schools without those schools being subject to 
the service, civil rights, or outcomes requirements of IDEA.
    In light of these current requirements in IDEA and other provisions 
relating to charter schools and other choice programs, the Commission 
made several comments on how private schools providing services with 
IDEA funds should operate. In its report, the Commission stated as 
follows:
    ``One way to increase choices for students with disabilities is 
simply to give states more flexibility to use IDEA funds for this 
purpose. For states that choose to provide more options for students 
with disabilities, IDEA should make it possible for IDEA funds to 
follow students to the schools their families choose.'' The No Child 
Left Behind Act takes an additional step, requiring states to offer 
choices for students in schools that do no make adequate progress. IDEA 
should include parallel requirements, mandating that states allow IDEA 
funds to follow students with disabilities when they choose to opt out 
of chronically failing schools or districts. As funding follows 
students, so should accountability. States should measure and report 
outcomes for all students benefiting from IDEA funds, regardless of 
what schools they choose to attend.
    This statement is generally consistent with current IDEA private 
school choice language under section 612(a)(10)(C), but obviously 
expands the number of children eligible for private services than under 
that subparagraph. However, the Commission states that all children, 
regardless of what schools they attend, must have their outcomes 
measured and reported by states. This recommendation would apply to all 
children receiving services under 612(a)(10) or any other private 
service delivery provision of IDEA. In addition, the Commission's 
report states as follows:
    ``The Commission recommends greater flexibility in using federal 
funds to allow states to create parental choice programs while 
preserving the student's basic civil rights. However, we recommend that 
any such program also require schools and programs to be held to the 
same accountability requirements for public schools, assuring that 
students achieve excellent results.''
    IDEA clearly contemplates that ``preserving a student's basic civil 
rights'' does not require the application of all of the obligations of 
IDEA on a private school. The existence of the IDEA sections noted 
above which do not require application of all IDEA requirements to 
private schools receiving federal funds demonstrates that Congress does 
not equate the application of IDEA requirements with the preservation 
of a student's basic civil rights. Instead, IDEA created a more 
flexible model, where civil rights are preserved through other means 
than regulatory compliance, including the ability of a parent to choose 
an alternative placement for their child. The Commission supported this 
architecture by supporting civil rights through a flexible model.
    The Commission then reaffirmed its view that accountability 
requirements apply to all children, including those in private schools. 
In light of the other recommendation that states, ``should measure and 
report outcomes for all students benefiting from IDEA funds,'' the 
reference to accountability requirements here after recommending 
greater flexibility in application of IDEA to all choice schools meant 
that states should measure and report outcomes for students in private 
schools.

    Question 2. As you may know, an existing program in Florida, the 
McKay Scholarship for Students with Disabilities Program, does not have 
to comply with these requirements [those outlined in question 1]. Would 
such a program be acceptable under the Commission's recommendations?
    Answer 2. At its April 9-10 hearing in Coral Gables, Florida, the 
Commission heard from Diane McCain, Director, Choice Office for the 
Florida Department of Education and John Winn, Assistant Secretary for 
the Florida Board of Education. They testified to the Commission about 
the McKay program and other choice programs in Florida.
    Based on that testimony, it is our understanding that some schools 
receiving McKay scholarship funds must comply with IDEA, as they are 
public schools. According to Ms. McCain, ``[t]he program provides . . . 
both public and private choices.'' (See Commission Hearing Transcript, 
April 9, 2002, page 205, lines 9-10.) Further, ``the majority of the 
students who participate in this program are choosing the public school 
option.'' (See Transcript page 204, lines 6-8.) Florida is a recipient 
of IDEA Part B funds. Any public agency receiving McKay scholarship 
funds for a child whose parent has chosen that agency instead of the 
LEA to which the child otherwise would have been assigned currently 
must comply with IDEA. Therefore, if most children receiving McKay 
scholarships are using them to attend other public schools, the 
assertion in the question that the McKay scholarship program does not 
comply with IDEA appears to be inaccurate for most recipients of McKay 
funds.
    Setting aside this apparent disagreement of the applicability of 
IDEA to the McKay program, the Commission did have some recommendations 
that would indicate whether the program would ``be acceptable under the 
Commission's recommendations.'' Based on testimony by Ms. McCain and 
Mr. Winn, the McKay program's major accountability measure is 
individual student and parent choice. When parents are dissatisfied 
with a private school, they can leave that school and select another 
public or private school. Parents can obtain data from a private 
school, but that school is not obligated to have its students 
participate in the Florida public school testing and accountability 
system and so may not have the same outcome and accountability data 
available for the parent.
    As noted above, the Commission recommended that all programs 
receiving public funds participate in state student accountability 
systems. Since Florida relies on parent choice as the ultimate measure 
of accountability and does not require private schools receiving McKay 
scholarships to participate in these systems, the Commission's 
recommendations can properly be read as a recommendation to the state 
of Florida that its McKay program incorporate such measures into its 
operations.

    Question 3. Does the Commission endorse allowing private schools to 
charge more than the amount of the voucher (with parents making up the 
difference) as is the case in Florida, or would tuition be limited to 
the amount of the voucher? Did the Commission consider how to prevent 
their recommended program of parental choice from evolving into a 
subsidy for middle-class and affluent parents, given that less affluent 
parents likely would not be able to pay additional costs?
    Answer 3. Governor Branstad: As to the first question, the 
Commission's report does not directly address the issue of the amount 
of a private school tuition or voucher. However, when discussing choice 
programs generally, the Commission made the following statement:
    ``The Commission heard testimony from Harvard University Economics 
Professor Caroline Hoxby suggesting that in order to work properly for 
students with disabilities, choice programs must provide schools with 
appropriate resources. Otherwise, schools and districts will not be 
sufficiently eager to educate students with disabilities especially 
those with the most significant needs. Consequently, while federal 
policy should not require them to do so, the Commission recommends that 
in designing optional choice programs, states allow all available 
revenues to which the student would have otherwise been entitled not 
just IDEA funds to follow students to the schools their families 
choose.''
    The Commission's discussion on this point addressed choice programs 
broadly. Professor Hoxby's statements clearly included all forms of 
choice, such as public school choice, magnet schools, and charter 
schools. Having all available funds follow a child would not address 
whether the services purchased with these funds from public school, a 
charter school, or a private school actually reflect the costs of 
services. ``All available funds'' could be more than the cost of 
private school tuition, or less than a public school's actual average 
per pupil costs (such as districts who receive supplements from 
nonprofit foundations in addition to local, state, and federal tax 
funds). The Commission did not address the issue of private school 
tuition or vouchers.

    Question 4. Did the Commission analyze the consequences of and the 
extent to which a parental choice system would deprive public schools 
of resources that are needed to provide and improve special education? 
How can we afford to develop a robust parental choice system and 
continue to meet our obligation to support public special education 
programs in states and LEAs?
    Answer 4. As noted in the response to question three, the 
Commission recommended that, ``in designing optional choice programs, 
states allow all available revenues to which the student would have 
otherwise been entitled not just IDEA funds to follow students to the 
schools their families choose.'' The implicit presumption behind this 
statement is that the funds shifted under a choice program from one 
public school to another public school, to a charter school, or to a 
private school, should reflect the costs of educating that child. 
Public education finance systems should presumably reflect the costs of 
educating children. If a number of children leave a school system, that 
school system should have a marginal decrease in costs that would have 
gone to serving those students. While public school systems typically 
have other fixed costs related to serving students, the receiving 
school system, charter school, or private school also have fixed costs. 
In a reasonably run state and local education system, the cost savings 
of children leaving one system should be proportionally offset by the 
reduced funding received by that district from federal, state, or local 
funds.
    For these reasons, it is not possible to answer the first question 
based on the presumption that a, ``parental choice system would deprive 
public schools of resources that are needed to provide and improve 
special education.'' Presumably, any system that ``deprives'' a system 
of ``needed'' resources is one that simply has set funding mechanisms 
that do not reflect costs properly. Further, the Commission's 
recommendation that ``all available funds'' follow the child likely 
reflects an assumption that many of the fixed costs of general public 
schools are subsidized through other means, such as bond issues.
    As to how ``we'' can afford to develop a robust parental choice 
system and continue to meet our obligation to support public special 
education programs in states and LEAs, the Commission apparently saw no 
conflict between increased choice and improved public schools. From the 
Commission's standpoint, choice includes public choice systems such as 
the free right to transfer to the general or magnet public school of 
one's choice, or to select a charter school. In those instances, there 
is no difference between the ``obligation to support public special 
education programs'' and to support choice because both are in fact 
public special education programs.
    Further, although not expressly stated in the Commission's report, 
one of the basic premises of choice programs is that competition 
improves the quality of public schools. The ability of parents to chose 
schools other than that to which their children are assigned by a local 
district encourages those same schools to improve their services or 
offer new services to children. Choice improves the quality of public 
schools. To the extent that the Commission supports choice programs, it 
supports public special education programs by improving their quality 
through competition. And therefore, the Commission believes that public 
schools can afford to support choice and public special education to 
the limited extent that those two things are not actually both public 
education.
 Response to Questions of Senator Clinton From Governor Terry Branstad
    Question 1. One of the areas that I have become very interested in 
is the connection between exposure to environmental toxins, such as 
mold and lead, and students' cognitive development. I worked to include 
a study of this issue in the No Child Left Behind Act, which will 
increase our understanding of this connection and make recommendations 
for addressing the problem. It is critical that we understand this 
issue for the health and safety of all of our children, but 
particularly for those with disabilities. As you cite in your report, 
there is evidence that environmental hazards may lead to disabilities, 
a problem that is particularly acute among minority students.
    Do you have specific recommendations for how we might tackle this 
issue or are there studies or experts that you recommend that I talk 
with to better understand the connection between environmental health 
and disabilities?
    Answer 1. The Commission did not hear specific testimony on 
environmental health issues and did not have any specific 
recommendations regarding it. I would suggest that you review the 
National Research Council of the National Academy of Sciences report: 
Minority Students in Special and Gifted Education and contact the 
National Academy of Sciences that discusses these topics in depth.

    Question 2. The 1997 IDEA amendments delineated under what 
circumstances Interim Alternative Educational Settings could be used as 
an alternative to the ``stay put'' provision. These settings are 
designed for short-term placements with the goal of ensuring that 
students are making progress towards meeting their academic and 
behavior goals written in their IEP's and functional behavioral 
assessments. Yet the current regulations fail to define and describe 
exactly what these settings should look like and what standards they 
should meet.
    To what extent does the Commission believe we should seek to 
improve the quality of these programs by ensuring that students have 
access to the full range of related services and high quality 
behavioral intervention services so that they can return to the 
classroom and perform their best along with their non-disabled peers?
    Answer 2. The Commission was not charged with looking into the 
discipline provisions of the IDEA. Additionally, because of the 
complexity and breadth of the issue and the short time the Commission 
was in operation, we did not take up the discipline issue.

    Question 3. Special education teachers are in short supply and 
growing scarcer by the year. In fact, an alarming 98 percent of school 
districts across the country say that one of their top priorities is to 
meet the growing demand for special education teachers. Increasingly, 
districts are looking to people who do not have expertise in special 
education to fill these vacancies, often resorting to hiring people who 
are not even certified. According to a Department of Education survey, 
37,000 people without appropriate qualifications are providing 
instruction to students with disabilities and an insufficient number of 
faculty are being hired to train special education teachers. Last year, 
over 30 percent of special education faculty positions at universities 
across the country went unfilled. Until we address this problem, our 
children, with or without special needs, are going to pay the price as 
class sizes increase and quality of instruction declines. We just 
succeeded in providing opportunities for recruiting and retaining 
qualified teachers and administrators in the No Child Left Behind Act.
    The Commission's report addresses this issue briefly, I am 
interested to hear from you in more detail what the Commissioners 
believe we should do specifically to remedy this growing problem.
    Answer 3. I would refer you to the section of the Report entitled, 
``Teacher and Administrator Preparation, Training and Retention,'' 
which contains the Commission's recommendations on these topics. Also, 
the Research and Finance sections discuss personnel preparation and 
training issues. For further information you may also wish to read the 
transcript from the Professional Development Task Force hearing in 
Denver, Colorado on March 6, 2002.
Response to Questions of Senator Clinton From Commissioner Douglas Gill
    Question 1. I am pleased that your Finance Task Force has examined 
the difficulty in determining how ``excess'' costs should be measured. 
As you point out, special education is a shared responsibility, one 
that falls on the shoulders of families, communities, school districts, 
states and the federal government. However, the current calculation of 
the federal government's share of excess costs relies on a national 
average that falls far below the real costs of educating a child with a 
disability in New York. As a result, the formula provides New York with 
far fewer dollars than it takes. I believe that any definition and 
distribution mechanism should recognize the cost differentials across 
states. The amount that each state receives should be based on the 
amount that it costs to educate a child with special needs in that 
state, rather than an average of New York and Mississippi, which 
results in New York getting less than true excess cost and Mississippi 
getting far more than there true excess cost.
    How do you propose we address these cost differentials across 
states to ensure a fair, equitable and reliable formula?
    Answer 1. Cost differentials across states are in relationship to 
the determination of the Annual Per Pupil Expenditure (APPE). The APPE 
is the first factor in the formula for determining (a) total cost and 
then (b) excess cost. Currently I believe APPE is constructed as a 
national average. This actually has some advantages for determining a 
Congressional appropriation, but of course, any system based on 
averages creates potential inequities.
    A proxy for the determination of both total and excess costs that 
would differentiate by both state and even to the district level is 
included in the Commission report on page 31. This determination of 
both total, and subsequently excess cost is important because it may 
allow states and districts to differentiate between costs on a variety 
of levels. For example, if you assume the APPE in to be $7000, the 
second step in the formula is to multiply the APPE by the assumed cost 
of special education in relationship to the applicable APPE. The most 
recent research shows that expenditures in special education across a 
variety of settings in a variety of states and regions is 1.9 times 
whatever the APPE is in that state, setting or locale. So, if we assume 
a APPE of $7000, the total cost of special education would be 1.9 times 
that APPE, or $13,300. A higher or lower APPE would increase or 
decrease total cost correspondingly. The next step in the proxy 
calculation is to deduct the applicable APPE. This step is to ensure 
that students eligible for special education are fully entitled to 
their basic or general education revenue prior to the assignment of 
excess costs. Therefore, using the current example of a total cost of 
$13,300, a deduction of $7000 leaves an excess cost of $6300. This is 
the amount upon which proportional share assignments should be made. It 
is also extremely important to note that there should be some specific 
guidelines and calculations used to determine APPE so that accounting 
consistency is ensured and there is no unfair advantage created in the 
determination of the APPE by a state or local district. Accounting 
inconsistencies would result in manipulation of the formula since the 
APPE represents the core element.

    Question 2. I was also interested in your proposal to tie increases 
in funds to improvements in student performance. As this Committee 
recognized when it passed the No Child Left Behind Act, accountability 
is crucial to improving student outcomes. I want to ensure however, 
that we encourage true improvements in meaningful outcomes rather than 
encouraging states to lower their standards so that students can meet 
the bar. The last thing we want to do is to reward states for giving 
out more diplomas, for example without guaranteeing that getting a 
diploma is a challenge for all students.
    Which indicators would you recommend using to measure 
accountability? Would you favor using multiple indicators? How would we 
account for differences in standards between states and if so, how do 
your recommendations account for these differences?
    Answer 2. Currently under IDEA states are required to develop, 
submit and report on a variety of performance indicators in the area of 
special education. These performance indicators should represent the 
starting point for accountability incentives tied to increased funding 
beyond a prescribed threshold amount. While almost everyone would agree 
that increased academic achievement against a set of statewide 
standards is critical, it is also important to note that increased 
academic achievement outside the context of increased post school 
results has little meaning. Students ability to obtain and retain 
employment, enroll in postsecondary educational programs and link up 
with out of school agencies and support programs is of paramount 
importance.
    Therefore, the use of multiple indicators across multiple 
dimensions is obviously the preferred approach. Accounting for 
differences in standards between states is analogous to differentiating 
funding amounts. It would be difficult, if not inconsistent, to argue 
for standardizing outcomes but differentiating funding amounts. It 
seems to me that if we intend to recognize that the cost of providing 
services is variable, it is hard to argue that the results or outcomes 
will not also be variable. One notion might be to establish a threshold 
of funding and a similar threshold of expected results. Differences 
above either threshold would then be applicable on a state by state 
basis.

    Question 3. I believe that your recommendation to create a pool of 
money to help districts deal with very high cost students, particularly 
when they arrive in a district after budgets have been enacted, is a 
good one. I am deeply concerned, however, that this solution will not 
have any meaningful impact if it is not accompanied by new dollars. New 
York State is struggling with deep budget cuts and has already cut 
significant chunks from its education budget.
    Did you examine the finances of states to see whether pooling the 
high-cost students will truly have a meaningful impact?
    Answer 3. There are a series of financial recommendations included 
in the Commission's report, all intended to grapple with the 
multiplicity of financial concerns presented by special education in 
2002 and beyond. As you are aware, the Commission has recommended an 
infusion of new dollars into special education. However, that infusion 
is limited to some extent by discrepancies in the current excess cost 
calculation and the need to link funding increases above a definable 
threshold amount, up to an exceeding 40% if necessary to increased 
accountability. In addition, there are two approaches that the finance 
task force favors, and believes will allow states and districts to get 
ahead of the escalating financial curve in special education. A simple 
infusion of new money will, in and of itself not allow special 
education to get beyond the financial curve, for the basic reason that 
when you ``get there,'' the financial target will have moved, and we 
will left the really difficult financial decisions and strategies in 
special education to another generation of legislators, states, local 
districts and families.
    My best guess is that there are three sources of ``new'' money in 
special education. The first source of ``new'' money is of course, 
federal funding increases up to the threshold amount, and incremental 
amounts above that threshold based on increased performance. With 
respect to the complex or high need student we can set aside a 
foundation amount of that ``new'' money to specifically address the 
issue of a safety net process.
    The second source of ``new'' money would be the investment income 
generated from the risk management pool concept discussed in the 
recommendations. As risk management pool funds growth potential 
increases these funds can be returned to districts to offset escalating 
costs in the provision of special education.
    The third potential source of ``new'' money in special education 
could be Medicaid recovery funding. Currently, Medicaid recovery funds 
are used to replenish general fund dollars at the state or local level. 
This particular issue was raised by Senator Kennedy at the hearing of 
July 9. It would seem practical and in fact, prudent to allow Medicaid 
dollars generated by eligible students to serve as a pool of funding to 
supplement safety nets, and/or as a revenue stream for risk management 
pool development. Either way, the recoverable funds should be directed 
towards cost reimbursement or leverage for investment in risk pool 
management.
    It is my opinion based on the results of our deliberations and 
expert testimony, that the combination of these options presents the 
most viable approach to helping to solve the current financial crisis 
in special education.

    Question 4. As you know, when Congress enacted IDEA back in 1975 it 
pledged to school districts it would help shoulder the burden of 
guaranteeing a free, appropriate, public education to all students with 
disabilities. Districts must meet their obligation regardless of the 
help they get from the federal government. So essentially we have 
imposed an unfunded mandate on our school districts which are already 
facing significant budgetary challenges.
    Answer 4. Due to the volatile nature of special education funding 
and the lack of implementation of any specific remedies at this point 
in time, the move from discretionary to mandatory funding was not 
recommended by the finance task force. While the suggestion of 
mandatory funding is laudable, it appears premature, and perhaps a bit 
shortsighted. Before endorsing a mandatory funding approach for special 
education the task force believes that most, if not all, of the finance 
recommendations need to be implemented and evaluated. Without a clear 
and thorough understanding of excess cost, establishing benchmarks for 
accountability and increased funding above a definable threshold, or 
fiscal flexibility and investment strategies in place, mandatory 
funding does not seem prudent. While mandatory funding could be viewed 
as financial fix to some extent, or the fulfillment of a ``promise'' of 
sorts, it would likely create a number of unintended consequences such 
as reducing, not increasing state and local flexibility, accelerating 
and inflating growth rates in special education and possibly mortgaging 
the future of special education without the benefit of solid and 
reliable projections.
  Response to Questions of Senator Clinton From Commissioner Douglas 
                                 Huntt
    Question 1. I agree that this reauthorization will provide an 
opportunity to improve transition planning and services so that all our 
students graduate prepared to move on to college and employment, 
becoming productive citizens. In New York, under the leadership of 
Deputy Commissioner Lawrence Gloeckler, who is our State Director for 
Special Education and Vocational Rehabilitation, we have been looking 
closely at the relationship between early and effective transition 
planning and supports to students and post-secondary success. We know 
the connection is solid and convincing, as we have witnessed graduation 
rates increase with earlier and more comprehensive transition planning.
    How can we strengthen and improve transition services so that 
students with disabilities are receiving them as early as their non-
disabled peers? What do you believe is the appropriate age to begin 
this process?
    Answer 1. One way to ensure that students with disabilities receive 
transition services as early as their non-disabled peers is to 
implement research-based, early identification and intervention 
programs. We should provide early screening, prevention and 
intervention practices to identify academic and behavioral issues in 
young children. I believe that the key to having any successful 
disability program is early intervention. The fact is that people with 
disabilities learn a dependency model from birth. They also learn very 
early discrimination, low self-esteem, and failure. Therefore, 
successful transition strategies should be available to a child at age 
12.

    Question 2. I agree that we must strengthen interagency 
coordination to improve employment outcomes. Commissioner Gloeckler 
testified before this committee and he too recommended pooling existing 
funds to improve transition services. Dr. Gloeckler suggested pooling 
monies from IDEA, Vocational Rehabilitation (VR), Higher Education Act, 
Ticket to Work, Medicaid and others to support the services necessary 
for independent living, education and employment.
    Specifically, which pots of money does your vision of pooled funds 
encompass?
    Answer 2. As you noted, the Transition Committee recommended that 
Congress mandate federal inter-agency coordination of resources through 
``pooling'' funds. Your question of ``which pots of money'' should be 
utilized is very important to the success of the recommendation. I 
believe that there are several agency pockets to be picked. First, if 
IDEA funding is increased, I believe a portion of the new money should 
be specified for transition services. It is one of the best long-term 
investments the Congress can make. We are either going to spend a 
relative little now or significantly more later. Secondly, through the 
reauthorization of the Rehab. Act, the Congress should provide for 
specific rehabilitation dollars to the transition pool. Thirdly, Social 
Security would benefit the greatest from an effective transition 
program. More people with disabilities who graduate to competitive 
employment equates to less people receiving social security disability 
income; therefore, I would suggest that the SSA allow for reimbursement 
to VR for transition FTE's within the schools. I don't believe that 
this would increase the amount of money expended by SSA because there 
are many states that return unused federal money within the program. 
Fourthly, one other federal agency that doesn't participate in 
transition that should is the new Office of Disability Employment 
Policy at DOL. Last year they received over $20 million in ``new'' 
money. I believe a portion should be given to the federal transition 
pool. Finally, there are four or five more obvious programs that should 
be pooled and I believe that they will be discussed more fully as this 
issues moves forward.

    Question 3. What role do you believe independent living centers and 
community rehabilitation providers should play in the transition 
process? To what extent and how do you believe federal legislation can 
improve community programs and independent living services involvement 
in the school?
    Answer 3. One of the suggestions that I have made to VR in Ohio, 
and should be introduced federally, is that we pay independent living 
centers to provide mentors, as advocates, to participate in the IEP and 
transition planning process. It would be a great resource to have 
people with disabilities who have already navigated through school to 
work as models to young people experiencing the same problems and 
issues. Young people can see, first hand, that even though times may be 
tough, there are others just like them that have made it.

    Question 4. To what extent do you believe we should provide states 
with the resources to develop data systems to track students' progress 
as they transition from school to postsecondary education and/or 
employment?
    Answer 4. Your next question relates to the extent that Congress 
should provide states with the resources to develop data systems to 
track student progress. I believe the ultimate indicator of success for 
special education is the employment rate of people with disabilities. 
We need to prepare students for adult life; therefore, if we don't know 
how successful transition from school to post-secondary education or 
competitive employment is, then we don't know how successful our 
special education program is either. Congress should ensure that 
schools have the resources and the requirement to track graduation and 
post-graduation success.

    Question 5. For students with severe disabilities, there is a need 
for assistive technology, accommodative services and individualized 
supports in community, postsecondary education and workplace settings. 
How do you recommend we address these needs?
    Answer 5. Your last question is another very important issue for 
me. I believe that advances in assistive technology will ultimately 
provide the answer to low graduation and employment rates for people 
with significant disabilities. As in my response to question 2, I 
suggest that, if there is an increase in the IDEA funding, a portion 
should be earmarked for assistive technology. In addition to the 
possible increase in funding for AT, I would suggest that a child own 
whatever technology the school provides for her/him. Technology is 
normally tailored to meet the needs of the individual; therefore, when 
a child leaves school the technology becomes useless. In other words, 
the technology is stored in a closet somewhere. I believe that the 
child should own the equipment and take it with them wherever they 
transfer. I also believe that the Tech Act should have the sunset 
provision removed and that each state program should become more 
involved with the transition process within the schools.
Response to Questions of Senator Wellstone From Governor Terry Branstad
    Question 1. Your report shows that more than 12,000 special 
education positions were left vacant or filled with substitutes in 
1999-2000. 600,000 students are being taught by uncertified teachers. 
By 2008, we will need to hire an additional 200,000 special education 
teachers. Yet, colleges and universities are expected to prepare only 
\1/2\ the number of teachers needed to fill these vacancies. Special 
Education teachers leave the field at twice the rate of regular 
education teachers.
    Your report recommends expanding alternative routes to 
certification. It urges districts to pay teachers more and to improve 
working conditions so teachers will stay in the field. It says that we 
need to invest in more experiential training and it wisely and rightly 
says that professional development needs to be a career long activity.
    These are critical recommendations that address a critical problem. 
Yet, despite the daunting tasks you have laid at the feet of states, 
districts and universities, your report never recommends increasing 
funds for IDEA Part D. How do you explain this?
    Answer 1. On pages 68 and 71 of the report, the Commission 
specifically recommends supporting continued investments in IDEA Part D 
research activities as well as encouraging a ``significant increase in 
Part D funding.'' Additionally, the sections on Professional 
Development and Finance make it clear that the Commission favors 
increases in IDEA Part D. The Commission did stop short of a specific 
recommendation because those decisions are contingent on competing 
priorities within the Federal budget..

    Question 2. You mention that states and districts could waive 
certain paperwork requirements as part of a pilot project. What 
paperwork requirements would you permit a state to waive? What 
paperwork requirements would you not permit a state to waive? How would 
you choose which states would be able to get these waivers? How would 
you determine whether their plan actually led to improved student 
outcomes?
    Answer 2. On page 18 of the report, the Commission recommended that 
the Secretary of Education ask the states that desire to participate in 
a paperwork reduction pilot project to submit proposals. While the 
Commission did not have a specific proposal in mind when making the 
recommendation to support a pilot project for States to waive paperwork 
requirements, it was anticipated that the Department would review the 
strength of the plans and select ten states for a trial run. The 
Department would implement a thorough monitoring process to make sure 
that the students were being well served and that successful outcomes 
were being achieved.

    [Whereupon, at 4:03 p.m., the hearing was adjourned.]