A closer look at Special Education funding in Wisconsin—Part two of a series

This is the second of a series of blog posts that takes a look at special education requirements and funding, including both state and federal funding.  This post focuses on federal funding. 

When state and federal mandates to provide special education service were first imposed on local school districts back in the 1970s, it was generally assumed that targeted state and federal funding that went along with these mandates would cover much, if not all, of the costs of providing special  education services to students with disabilities.  That assumption was quickly proven wrong.

While both the federal government and the state provided and continue to provide categorical aid specifically for special education, this aid falls far short of paying district’s full costs of providing the required services and is woefully inadequate compared to the original commitments made by both the state and the federal government .

With respect to federal aid, it is commonly understood that when Congress imposed the mandate to provide special education services it also committed to pay 40 percent of the cost of educating special education students in this country. That is not technically true.

As a recent report from the non-partisan Education Commission of the States (ECS) puts it, “The funding goal in current IDEA legislation is for the federal government to provide 40 percent of the average per-pupil expenditure in the U.S., multiplied by the number of special education students in each statenot 40 percent of the cost of educating all special education students.”

That report also notes that, in reality, the 40 percent figure is more of a funding goal than a commitment, and further ii is a goal that has never come close to being met.

According to the ECS, when one looks at the most recent data available (from the 2015-16 school year), the federal government provides only about 15.3 percent of the average student expenditures. To meet its 40 percent funding goal, estimates the ECS, the federal government would have to provide states and school districts with at least an additional $19.7 billion in IDEA funding annually.

According to the ECS, meeting the 40 percent funding goal in 2015-16 would have required the federal government to far more than double the $12.3 billion in IDEA, Part B and Part C funding that flows through to school districts it provided to states that year.

Earlier this year, the non-partisan Legislative Fiscal Bureau (LFB) noted:

“Federal special education aid is provided through the federal Individuals with Disabilities Education Act (IDEA) and Medicaid. IDEA flow-through grants provide funding related to special education services, including staffing, educational materials, equipment, and other costs. Medicaid reimburses school districts for a portion of the costs of certain medically necessary services or equipment that are referred or prescribed by a physician, advanced practice nurse, or psychologist.

“The following table shows statewide special education costs in 2015-16, the most recent year for which audited cost data is available, as well as offsets from state and federal special education aids and other offsets, such as transfers between districts. The table includes only state and federal aids paid to public school districts, and excludes aids paid to independent charter schools, cooperative educational service agencies (CESAs), or county children with disabilities education boards (CCDEBs). Additionally, the attachment shows special education costs by district, minus state and federal education aids and other offsets.

Special Education Costs and Funding, 2015-16

Total special education (Fund 27) costs                               $1,630,181,500

State special education aids                                                      $359,354,000
Federal special education aids                                                 $201,949,500
Other offsets                                                                                     $38,812,600
Total aids and other offsets                                                        $600,116,100

Net costs after aids and offsets                                                 $1,030,065,400

This suggests that federal special education aids offset roughly 12.4 percent of total special education (Fund 27) costs in 2015-16, the most recent year for which figures are available.

Up next:  More on how the declining share of special education costs paid by state and federal funding places burdens on local districts and their (regular education) budgets.