Stimulus Brings Spec. Ed. Funding Challenge
By Christina A. Samuels
The increase in special education funding driven by the economic stimulus is bringing new attention to a unique provision in federal special education law: Districts that get more special education funds from the federal government are allowed to cut back on the local funds that they use to pay for special education programs.
The intent of the provision in the Individuals With Disabilities Education Act was to allow districts to gradually scale back their own spending while using federal money to fill the gap. But the law did not anticipate a near-doubling of special education funding from the federal government in a short amount of time. States are receiving $12.2 billion from the American Recovery and Reinvestment Act to spend on special education over two years, so most districts are likely to see dramatic increases in federal funds.
The prospect of being able to shift some local money from special education programs to other education needs at a time of severe budget pressure has also prompted at least two states¬—Illinois and Missouri—to change the way they assess their districts’ performance with special education students. Under stimulus-funding rules, districts that are meeting requirements under each state’s federally-mandated “state performance plan” get the spending flexibility, while districts that need more help do not.
That’s an incentive to move more districts into the “meets requirement” category, and Missouri plans to do that for one year, said Heidi Atkins Lieberman, the assistant commissioner for special education for the state.
“When we developed the criteria [for evaluating districts], we didn’t realize there would be a fiscal impact,” Ms. Lieberman said.
Missouri evaluates districts on certain compliance issues, such as the percentage of children who receive special education evaluations in 60 days, as the federal government requires. But the state also added additional criteria for districts to meet, including specific graduation rates and dropout rates for students with disabilities. The federal government does not require that states use those measures to make final determinations for their districts.
Criteria like graduation and dropout rates, which are called “performance” indicators, are the ones that Missouri is suspending or a year. The change will allow every district in Missouri to meet state requirements, and thus allow those districts to shift a percentage of the local money that they spend for special education to other education programs. Without the change, nine districts would have had lower ratings.
The local money that would have been spent on special education can be used to avoid cuts to other programs, pay for teachers, and fund systemic changes to can improve schools for all students, Ms Lieberman said.
However, Ms. Lieberman said she had mixed feelings about the one-year change. “I am worried that people will get the wrong message. We have shifted from a compliance-oriented focus to a performance one, so it’s sort of going backwards.” But the state could not pass up the prospect of increased spending flexibility, she said.
‘A Feeding Frenzy’
Illinois is another state that is using different calculations to bring more districts up to standards. Under a new state formula for calculating compliance, the number of districts that need assistance has dropped from 321 to 159, according to a weekly message distributed to districts in June by Superintendent Christopher A. Koch.
The blog IDEA Money Watch, a project of The Advocacy Institute, a nonprofit organization in Marshall, Va., has been tracking special education spending, including gathering the documents on the changes to the policies in Missouri and Illinois.
The spending flexibility is a concern to some special education directors, who don’t want to see local special education funding diverted to other uses as new federal money flows to districts.
Mary Watson, the president of the National Association of State Directors of Education, said state education directors in a tough position. They recognize the financial bind many districts are in, but the officials also feel pressure to show that stimulus funding can help provide a better education for children with disabilities, as was intended.
“It’s been such a feeding frenzy,” said Ms. Watson, the director of the exceptional children division of the North Carolina Department of Public Instruction. The message that districts are getting is that “we’re doing well now, so our system can now take money away. It’s been really hard,” she said.
In North Carolina, 53 out of 115 districts now can reduce the amount of local money that they spend on special education programs, Ms. Watson said.
It’s unclear if all of those districts will choose to do that. The state has several successful initiatives under way, including programs to improve literacy and “tiered intervention” programs for academics and behavior at school. Those are all problems that could be continued, or expanded, using stimulus dollars.
But Ms. Watson is primarily getting questions from districts on how to retain teachers. “That leads me to believe that’s going to be the priority,” she said.
Local Funds Cut
The spending flexibility provision is part of the 2004 reauthorization of the IDEA. The law states that if districts receive an increase in federal funds for special education, they can reduce the amount they contribute to special education by 50 percent of that increase. So, if federal money to a district increases by $1 million over the previous year, that district can reduce its local contribution to special education programs by $500,000.
There’s a second condition on the money that is linked to evaluations that states must make of each district on a yearly basis, under the IDEA. Districts are evaluated on various indicators, and their performance determines whether they “meet requirements” or receive one of three lower ranks: “needs assistance,” “needs intervention,” or “needs substantial intervention.”
If a district receives one of those three lower ranks, it has to maintain its current level of local funding and loses the flexibility to shift local dollars to other education needs.
Mabrey Whetstone, the director of special education services for the Alabama department of education, said the stimulus has heightened the importance of those evaluations for state and local education officials.
In Alabama, 76 districts are allowed to reduce their local funding for special education because of the stimulus, though budgets are not final and so it is not clear how many will do so. Fifty-six districts do not have the flexibility, including the state’s largest school systems, Mr. Whetstone said.
The leaders in those districts have visited his offices to find out if they can get their determinations changed. Mr. Whetstone said he has carefully explained to them why it is necessary to hold the line.
“We’re being very clear: There were reasons the stimulus money was given to us,” he said. “This is an opportunity to improve the programming that is provided to students with disabilities.”
Vol. 28, Issue 37