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The Honolulu Advertiser
Posted on: Monday, August 13, 2001

Special ed situation at crucial juncture

By Johnny Brannon
Advertiser Staff Writer

Hawai'i's costly struggle to improve long-neglected special education programs will arrive at a crossroads Thursday, when a federal judge will consider seizing portions of two mammoth state departments and handing them over to an independent receiver.

If U.S. District Judge David Ezra grants the plaintiffs' motion to take over the system, he could grant a receiver sweeping powers to secure money, and oversee parts of the state education and health departments.

"We're still asking for that and I have reasonable confidence it's going to happen," said attorney Eric Seitz, who represents plaintiffs in the Felix consent decree case.

The state has spent more than $1.3 billion to expand special education and mental health programs since the 1994 court order, the result of a class action lawsuit filed by parents of Jennifer Felix and other disabled children.

But improvements remain behind schedule, and officials are asking for more time to comply. Legislators, meanwhile, say they worry the state has been sucked into an expensive boondoggle of limitless entitlements that may harm the very children it is meant to assist.

"We want to make sure the money is spent on the services we need, and isn't lost in a bureaucratic mess along the way," said Sen. Colleen Hanabusa, D-21st (Kalaeloa, Makaha), who co-chairs a House-Senate investigative committee looking into Felix program spending.

Hawai'i children with learning disabilities who are eligible for special education programs has shot from 13,000 in 1994 to more than 22,000. And the number considered part of the Felix class — those who also have mental health problems — has risen from fewer than 1,800 to about 12,000.

Annual state spending for both sets of children has jumped from roughly $181 million per year to more than $350 million. The Legislature increased the budgets of the education and health departments by $51 million this year, though the departments had requested $82 million more.

In an April court proceeding, schools superintendent Paul LeMahieu said the Legislature consistently rejected budget requests that would have sped up compliance with the consent decree.

"There is a mythology that the Legislature has funded every single request that's come along, and that mythology contributes to the perception of wanton waste," he said. "The Legislature has shortened our request, year in and year out, an average of 45 percent."

LeMahieu said the Department of Education spends about 24 percent of its budget on special education and related programs, less than the national average of 28 to 30 percent.

"That says to me these are not runaway costs," he said. "But the costs are very great indeed."

But Hanabusa said there are few assurances the money is used on essential services, and not programs that are experimental or unnecessary.

"The bottom line is, are the children being serviced and are taxpayer monies being used in an efficient way to do what needs to be done?" Hanabusa said.

Seitz said the investigative committee is only harming attempts to comply with the court order and will likely inflate its cost further.

"The legislature is threatening the whole process, and unless they back off and behave in a responsible manner, there's no way the state's going to be able to comply with the consent decree," he said.

Many choices available

Ezra could render a decision Thursday or hear arguments from both sides and decide later. The proposed order would give the state and plaintiffs 30 days to agree on who should act as a receiver, or nominate candidates and leave the choice up to Ezra.

The proposal asks that a receiver be allowed to "oversee, supervise and direct all financial, contractual, legal, administrative and personnel functions resulting in provision of special education services by the Department of Education and the Department of Health ..."

Ezra has already held the state in contempt for failing to comply with consent decree goals, and the state wants him to extend a December deadline by six months. LeMahieu said the appointment of a receiver could trigger serious side effects.

"If the mandate is only for special education, and the receiver takes resources away from other areas, it could do a lot of harm," he said.

Health officials say they are making rapid improvements, and that individual treatment costs have plummeted from an annual average of $23,000 per Felix-class child to less than $6,000.

More children who need help are being identified earlier, and it is less likely they will end up receiving services that are more intensive — and more costly — later, state health director Bruce Anderson said.

Anderson said the rising caseload and lower average cost were expected as the state's network of mental health services for children expanded under the consent decree.

Anderson and Ivor Groves, the court-appointed monitor for the case, said the caseload is expected to level off now that most children who need help have been identified. But both agree that some children have been steered into expensive treatment that was unnecessary, such as long-term hospitalization.

"Sometimes there were no alternatives, and sometimes teams had to be trained about alternatives," Groves said. "Acute hospitalization went up more than projected because of team expertise issues. I did not expect those big increases to occur."

The state spends $625 per day to hospitalize a child, while placement in a therapeutic foster home costs just $100, Anderson said.

But Groves, who periodically reviews sample Felix cases to determine the state's progress in meeting consent decree goals, said he had seen no evidence that children have been inappropriately identified as Felix class.

No strict definition

That has been a big concern of some legislators following the January release of a critical report by the University of Pennsylvania's Center for the Study of Youth Policy.

That evaluation, commissioned by State Auditor Marion Higa, concluded that Hawai'i had unwittingly invited a massive Felix caseload by failing to specifically define which children qualify for services under the consent decree.

But the Legislature quietly shelved a plan to create a strict Felix class definition after the attorney general warned that doing so would violate the consent decree and federal law, and would not necessarily save money.

Federal mandates would still entitle children to services they need if a new definition excluded them from the Felix class, the attorney general concluded.

Shelby Floyd, another attorney for the Felix plaintiffs, said attempting to narrowly classify who is covered by the consent decree would only delay compliance.

"All I can see is confusion, and probably greater cost in trying to resolve that confusion," she said.

About 12 percent of the state's public school students are now considered qualified for special education, comparable to the 11.9 percent who received special education services in the nation's 56 largest school districts in 1999, Groves said. But the auditor's report found it "impossible to determine the costs of providing services to the Felix class" because the state lumps much of that spending together with special education in general.

Hanabusa said it is absurd that officials cannot provide a clear accounting of the money they've spent complying with the consent decree.

"Where does the buck stop? Who's responsible?" she said.

The report also questioned whether there's a conflict of interest when specialists who work for state-financed service providers participate in evaluations that send children to the same agencies for treatment.

Groves said that clearly occurs but is no different from a patient being treated at the hospital where their doctor works. Barring the practice would be wasteful because it would often require children to be diagnosed twice, he said.

The investigative committee plans to subpoena Anderson, LeMahieu and other public officials. Hanabusa said the panel also wants to question leaders of some of the nearly 50 private companies the state pays to provide services to Felix-class children.

The committee slammed into a roadblock last month when it tried to subpoena Groves and Juanita Iwamoto, who heads a nonprofit agency Groves formed to administer court monitor money. Ezra ruled that the pair were protected by judicial immunity and quashed the subpoenas.

Anderson, LeMahieu and Groves say they have not denied any information requests from legislators. But Hanabusa and Saiki said they were committed to pursuing the probe and want to make sure no information is held back.

Reach Johnny Brannon at jbrannon@honoluluadvertiser.com or 535-2431.