Even with increase in state budget, school districts still foot millions in special education expenses
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MADISON — School administrators and a bipartisan group of lawmakers alike welcomed a $100 million boost in special education funding included in Wisconsin's newly minted state budget, but say it does little to meet the rising costs of serving students with disabilities.
Take the Bowler School District, where about 22% of students have a disability, according to figures from the state Department of Public Instruction. The additional funding means the district will receive about $22,000 more per year to cover special education costs, according to administrator and special education director Glenda Butterfield-Boldig.
But that amount "barely covers the cost of the salary for a full-time paraprofessional, let alone the benefits," she said. Public schools are mandated by law to provide what a student with a disability needs, even if that means hiring one or two additional staff members.
In the school year that just ended, districts were left to cover more than $1 billion in special education costs, forcing them to divert money from their general funds that benefits the entire student body — including students with and without disabilities.
"I'm under no illusion that there isn't going to still be at least a billion dollars of unreimbursed special education costs, even after this increase," said Dan Rossmiller, the executive director of the Wisconsin Association of School Boards.
Who pays for special education?
School districts are required by state and federal law to provide special education services to students with disabilities based on their individualized education plans, known as IEPs.
The plans could include services that require additional staff, like speech-language pathologists, physical therapists, nurses or counselors, and physical items, like assistive technology devices and specialized curriculum.
Under Wisconsin's new two-year spending plan, the state will reimburse a third of what public school districts spend to cover the costs in students' plans. The state also helps districts with particularly high costs through a separate program.
"It's not so much a question of whether students with special needs are receiving services, it's whether those services are being paid for by the state, or whether the district is having to find resources from other sources, property taxes or other state aids, to cover those costs," Rossmiller said.
Money also comes in from the federal government. In order to receive federal funding through the Individuals with Disabilities Education Act, the state and districts cannot decrease spending for special education year to year. Medicaid also reimburses services like speech and language therapy.
Private schools are not held to the same requirement: they cannot discriminate against students with disabilities during enrollment but can expel them if they cannot meet their needs. Voucher payments for students with disabilities are set to increase 18% to $15,443 per student under a shared revenue deal reached by Democratic Gov. Tony Evers and Republican leaders.
How much does the state cover?
The state budget, signed into law by Evers earlier this month, boosts the percentage of what the state covers — also called the reimbursement rate — to an estimated 33.3%.
That's the highest rate in 20 years, Evers said. The former state superintendent had originally recommended increasing the rate to 60%. Even with the increase included in the state budget, Wisconsin's rate remains among the lowest of the handful of states that use a reimbursement system.
Rep. Kristina Shelton, a Democrat who previously served on the Green Bay School Board, said the increase "doesn't even come close to covering what districts need to cover the rising costs of special education."
The budget puts about $100 million more in the state's pot of money to reimburse districts. The budget also allocates an additional $4.6 million to cover about half the costs when a student's needs exceed $30,000. In 2022-23, the state's fund covered an estimated 31.7% of special education costs and 29.6% of expenses in the year prior.
In 2019, a bipartisan Blue Ribbon Commission recommended increasing the reimbursement rate to at least 30% or up to 60%. Some public education advocates have called for covering 90% of special education costs — the amount reimbursed for private schools participating in the voucher program for students with disabilities, Shelton noted.
"I would like for us to continually raise (the rate) and get it eventually up to the two-thirds area," said Assembly Education Committee chairman Joel Kitchens, R-Sturgeon Bay, who also was one of the commission's chairmen. "I do hope that we can get up to a higher level at some point. I think everybody recognizes that, it's just that it's really expensive to do that. And if the public isn't demanding it, it just doesn't happen."
Are special education costs rising?
The state's reimbursement rate has remained relatively flat while special education costs have risen. The money set aside for special education covered as much as 70% of school districts' costs in 1973, according to a 2019 report from the Wisconsin Policy Forum.
"When the state doesn't keep pace with those cost increases, in terms of what it provides to districts, districts have to then look at cutting programs that benefit all students, including students with special needs," Rossmiller said.
Not only is inflation driving up the costs of services, but "students are coming in with more extensive needs as well," Renae McMurray, the administrator of Mercer School District, said. Mercer, which enrolls just slightly more than 100 students, contracts out for hourly speech services instead of hiring a full-time speech therapist.
School leaders agreed personnel is their highest cost, both in regular and special education, especially as attracting teachers and paraprofessionals becomes more competitive.
"It's very hard, because other districts can definitely offer them more money. It's very temping for teachers to leave and get that pay increase," said Nathan Hanson, the administrator and special education director of White Lake School District. "Hiring was never super easy in special education, but now it's almost impossible."
How do districts budget for special education?
In the academic year that just ended, school districts were left to foot about $1.1 billion in uncovered costs, according to the nonpartisan Legislative Fiscal Bureau. Districts tap into their general fund budgets to cover the rest, leaving less money for purposes that serve the entire school body.
White Lake transferred about $231,000 from its general fund to pay for special education, Hanson said — around $1,400 per pupil. Bowler transferred around half a million dollars, and even with the special education increase, a decline in high-poverty aid makes the impact "pretty much a wash," Butterfield-Boldig said.
The Adams-Friendship Area School District still expects to transfer more than $2,000 per pupil from its general fund to its special education fund, according to administrator Tom Wermuth. The district serves about 1,300 students — about a quarter of whom have a disability — putting the total well over $2 million.
Administrators emphasized that an increase in special education reimbursement helps all students, because it keeps more money in the general fund to serve the entire student body. Kitchens has recommended that districts lobby for an increase in the reimbursement rate, rather than per-pupil funding, for that reason.
"When we remove tens of millions of dollars from the general fund to cover rising costs for special ed, it harms all students," Shelton said, adding the Green Bay Area Public School District transfers about $33 million from its about $300 million budget. With the increase, the district anticipates receiving about $1 million more from the state, she said.
More: Why some schools will win bigger than others under state budget passed by lawmakers
Could programs be cut as a result?
Districts with higher percentages of students with disabilities have more costs that are not met by the state. They may have to make up for the shortfall by increasing class sizes, deferring maintenance or letting retirements go unfilled, Rossmiller said.
Administrators said it is difficult to determine what exactly they would cut from their general funds, as special education reimbursement is just one factor in the complicated budgeting process. Adams-Friendship has not made specific cuts in regular education programming to offset the deficit, "but certainly the whole picture is taken into account every year," Wermuth said.
For Bowler, the general fund supports programs like dual credit classes and youth apprenticeships. The school district used to offer more opportunities like a gifted and talented program, which no longer exists, Butterfield-Boldig said.
"It has an impact on what we're able to bring back or new initiatives that we're able to implement," she said. "Every time we have to make a transfer, that is limiting the amount of money that we have to support other programs. That's why it's so critical to look at getting those reimbursable costs closer to that 100% as possible."
Hope Karnopp can be reached at HKarnopp@gannett.com and on Twitter at @hopekarnopp.
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This article originally appeared on Milwaukee Journal Sentinel: Special education got a small bump in state budget. Why administrators say it's not enough.
