New Report: New York City’s Special-Education Litigation System Is Driving Up Costs

Soaring Carter-case spending is straining the city budget and weakening public-school capacity

NEW YORK, NY – Earlier this week, Mayor Zohran Mamdani identified the Department of Education’s (DOE) special-education “due process” costs as one of six major unbudgeted needs contributing to a projected $5.4 billion city budget deficit, even as his budget director signaled potential new investments in special-education. 

In a new Manhattan Institute report, fellow Jennifer Weber argues that before expanding spending, New York City must reassess how it is spending more than $1 billion annually on special-education tuition reimbursement. Weber finds that the city’s current approach to special-education due process has drifted from the original intent of the Individuals with Disabilities Education Act (IDEA), undermining both fiscal stability and public-school capacity within the nation’s largest special-education system.

Under the Supreme Court’s 1993 ruling in Florence County School District Four v. Carter, families may seek private tuition reimbursement when a district fails to provide a Free Appropriate Public Education (FAPE). In New York City, however, what was intended as a year-by-year safeguard has evolved into a system in which private placements often continue for years without renewed assessments of whether the district can meet a student’s needs.

Key findings include:

• Carter-case spending rose from $47 million in 2005 to $1.3 billion in fiscal year 2025, comprising 3.25% of the DOE budget.
• Due-process filings nearly tripled between 2015–16 and 2021–22.
• New York State reports 517 due-process filings per 10,000 students—by far the highest in the nation—with New York City accounting for most cases.
• The average settlement now exceeds $101,000 per student, more than three times the city’s per-pupil spending. 

Weber cautions that expanding funding without structural reform risks entrenching a litigation-driven system rather than strengthening public programs. She outlines five reforms aimed at restoring IDEA’s intended framework: 

1. Restore annual FAPE determinations.
2. Expand DOE-run evaluation teams.
3. Create a Preschool Response to Intervention (RTI) framework.
4. Adopt a mediation-first model.
5. Strengthen specialized public-school programs. 

With due-process costs now tied directly to the city’s budget shortfall, Weber argues that reassessing Carter-case spending is essential to improving equity, restoring fiscal discipline, and ensuring that students with disabilities are effectively served within public schools whenever possible. 

Click here to read the full report.