Nyc’s Costly Special Education System Is Imperiling Mamdani’s Ambitious Agenda

New York City is spending more than $1 billion each year on private school tuition, related services and other costs for students with special education needs at a time when it faces chronic budget deficits that are imperiling Mayor Zohran Mamdani’s ambitious agenda.

Now, Mamdani is betting that increasing the system’s capacity to provide those services can eventually curb those payouts.

His administration is expanding specialized programs, adding staff to reduce evaluation delays and investing in preschool special education. The city is arguing that a stronger public school system will mean fewer families need to turn to private schools and litigation. Mamdani has projected $149 million in annual savings from reducing spending on those cases and changing how they are managed.

Spending on due process claims, commonly referred to as Carter cases — private school tuition reimbursement for students with disabilities — skyrocketed from $47 million in 2005 to $312 million in fiscal year 2016, before surpassing $1 billion last year. Due process cases are filed by public and nonpublic students seeking funding outside of the public school system. The funding can cover tuition, educational services, transportation or legal services.

The parallel education system has driven costs upward — at the precise time the democratic socialist mayor finds himself scrambling for revenue. The surge in private tuition spending has exacerbated the city’s budget woes, threatening the mayor’s push to provide universal free child care, free buses and other costly city services. At the same time, the school system is grappling with a steady decline in its student population, dropping from roughly 1.1 million students a decade ago to under 900,000 students.

“For too long, our city has accepted this dynamic as the status quo, paying out settlements instead of fixing the underlying problem: the chronic shortage of adequate services available to special education students,” Mamdani said during his executive budget presentation in May. “This is not only an abdication of our responsibility to our students, it is also enormously costly. We are committed to addressing this issue head on.”

Jennifer Weber, a K-12 education policy fellow at the conservative-leaning Manhattan Institute, said Mamdani’s investments in expanding special education programs could help, but questioned whether the administration is targeting those investments where the need is greatest.

“In order to bring kids back, you need to actually have the programs to bring them back, so that part is a good thing," Weber said, referring to “family friendly” changes former Mayor Bill de Blasio made in mid-2014. “But because of policy changes made under de Blasio, it’s not necessarily going to be an automatic that it’s going to truly bring kids back in, either.”

Weber also questioned whether the administration’s projected $149 million in savings would materialize without addressing those existing placements. The city, she said, needs to both limit the number of students entering private placements and tackle the students who are already there.

New York state is an outlier with respect to the volume of lawsuits filed by families seeking special education services. In recent years, its rate of such cases was more than 10 times higher than neighboring New Jersey and far exceeded every other state in the country. That’s driven almost entirely by the city: About 98% of the state’s Carter Cases originated in the five boroughs in 2021, the most recent data available shows.

The vast majority of kids benefiting from this public funding for private school are white — in a city where Black and brown students experience systemic educational disparities and are disproportionately represented among students with disabilities. Of roughly 20,000 due process cases settled in fiscal year 2025, about 65% involved white students, even though they only make up 16% of the public school population.

“I know the idea is that you can go to a lawyer and try to get these services — obviously no matter what your background is, but there seems to be some communication of this information that's happening for certain demographic groups and not for others,” Rahul Jain, deputy comptroller for New York City in the state comptroller’s office, told POLITICO.

How we got here

The right to seek reimbursement for private school tuition when the educational needs of students with disabilities aren’t being met by the public school system stems from a Supreme Court ruling, Florence County School District Four v. Carter, decided more than 30 years ago. 

So why have the number of Carter Cases in New York City only exploded over the last decade? Part of the answer stems from a 2014 policy shift under de Blasio.

At the time, the city decided to stop fighting cases settled in previous years. The result: Once a student receives approval for private tuition reimbursement, they typically continue receiving that subsidy year after year — even if the public school system could meet their needs.

“When you’re not actually contesting those placements year after year … you don’t know whether the child has made progress or not,” said Weber, who’s written extensively about the city’s special education challenges. “Year after year a child changes so much that if the goal is for the student to receive a free and appropriate public education in the least restrictive environment, those private placements may not be the least restrictive environments for that child year after year.”

Special education advocates praised the policy change as a way to support parents who couldn’t afford lawyers to fight the city. But critics contend it fueled a network of law firms, private evaluators and education providers serving families seeking private placements.

Christina Foti, the Department of Education’s deputy chancellor for students with disabilities and English language learners, said the policy was well-intentioned but weakened accountability.

“What has happened in the absence of checks and balances is that we've seen a cottage industry of folks benefiting and profiting off of due process,” she said.

The change in how Carter Cases were handled under de Blasio is just one element in a complicated stew of factors. The shift did not create demand on its own. Staffing shortages, lengthy evaluation timelines and a shortage of seats in specialized programs left students without federally mandated services, pushing more families toward private schools. Rising autism rates and students with greater needs post-pandemic have also increased demand.

New York’s legal framework is another factor. Beyond the federal standard allowing for private placement, state law gives families another avenue: parents can enroll a child in a private school and then seek reimbursement for special education services.

“The growth in spending [is] the fiscal symptom of a system that all too often fails to deliver appropriate programs and services on the front end and then forces families into litigation to obtain what their children are legally entitled to receive in the first place,” said Jesse Cole Cutler, an attorney at SkyerLaw, one of the most prominent special education law firms in the state.

A pendulum of approaches

Mayors have taken drastically different approaches to Carter Cases.

Under former Mayor Michael Bloomberg, the city aggressively challenged private school reimbursement cases, staffing up on lawyers to review them. His administration argued the strategy would keep money in the public school system and strengthen special education. But parents and advocates criticized it as hurting families who could not afford attorneys.

His successor, de Blasio, changed course early on. In June 2014, the city pledged to stop contesting cases it settled in previous years or that parents had won in court, as long as the child’s individualized education plan and school placement remained unchanged.

The de Blasio administration also promised to resolve private school tuition disputes within 15 days when it determined a settlement was appropriate, speeding up a process that typically dragged on for months.

The next mayor, Eric Adams, and then-schools Chancellor David Banks, focused on serving more students within the public school system, announcing initiatives to expand preschool special education as well as programs aimed at autism and dyslexia.

Those programs, however, did not meet demand.

In 2022, Banks took direct aim at what he viewed as the underlying problem — Carter Cases — arguing that money meant for public school kids was “going to private schools” and that “folks have figured out how to game this system” — comments that stoked controversy and were later walked back.

Under Adams’ administration, the DOE created a new budget category just for due process cases, a move budget experts viewed as a sign of progress. In June, the Mamdani administration went further, with the budget now distinguishing between different types of cases.

“This new transparency is something that allows us and others to track what's going on within the spending and also decide and evaluate if we do think that there's some progress made in the future,” said Julia Konrad, assistant director for the education team at the New York City Independent Budget Office.

Last year, the City Council pushed the DOE to disclose demographic data of special needs students for whom the city is paying private school tuition, which the agency initially declined to provide. The data shows that the majority of the students who receive funding are white.

Jain, the deputy comptroller, said the data could help the city identify similarities among families who’ve successfully sued or settled with the city, potentially allowing officials to target those patterns and costs.

Nelson Mar, a senior staff attorney at Bronx Legal Services — which handles special education cases for low-income, predominantly Black and Latino families — said many of those families are entitled to services and they “typically win their cases.”

“People with resources, people who have access, they know how to use the system to benefit themselves and their families,” he said, noting affluent families are disproportionately white. “They know how to access evaluators. They know how to access attorneys to help them litigate these cases.”

Can Mamdani break the cycle?

The work is now left to Mamdani. Like his predecessors, he’s vowed to take on the growing costs associated with private school reimbursements. His ally Gov. Kathy Hochul also identified Carter cases as an area where the city should cut spending.

Mamdani’s administration says its strategy is to expand the public system's capacity so families can access services without resorting to litigation, an approach similar to the one pursued by Adams.

That includes a $67.5 million investment announced in July to extend existing special education programs to preschool as part of the mayor’s broader effort to institute universal child care. The city has long lagged on providing preschool seats for special needs students.

Mamdani also pledged to hire hundreds of new staffers to reduce evaluation wait times and help families navigate the process for individualized education plans. He described the investment as aimed at ensuring kids can attend programs closer to home and keeping more students in public schools.

The mayor projected $149 million in annual savings. A DOE spokesperson told POLITICO the budget for those cases in 2027 is $1.4 billion, compared to $1.5 billion the previous fiscal year, and $1.2 billion in 2025.

The DOE says the number of due process cases filed has fallen by more than 40 percent since 2024. Over the past few years, the agency has also added resources to review cases involving students in private and parochial schools, bringing more of that work and oversight in-house, according to Foti.

Meanwhile, Mamdani is sparring with the teachers union over pay for paraprofessionals, who assist students with disabilities, as he looks to block a City Council law granting paraprofessionals a one-time, $10,000 bonus.

“Over time as we start to fill those vacancies, it will start to bring down the Carter case cost,” Council Speaker Julie Menin said.

The city reported last month that the number of due process complaints decreased by 19% between the 2024-25 and 2025-26 school years — with the overall dip driven primarily by private schools.

Ana Champeny, vice president of research for the Citizens Budget Commission, a fiscally conservative budget watchdog, said the city’s focus on expanding specialized programs within the public school system is the right approach. But she cautioned that it’s too early to ascertain whether the Mamdani administration’s approach will ultimately tackle the broader issues driving those costs.

“It’s nine months in,” Champeny added. “They’re making certain steps and they’re taking certain actions, it’s still really early.”

Foti, the deputy chancellor, said she’s prioritizing expanding specialized programs, especially to Black and brown communities.

“What I’m really hoping to do in our upcoming years is to make sure that that expansion is done a little bit more quickly, a little bit more broad scale,” she said.