Cost of special-ed services leans on local taxpayers

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Along with recruitment and retention of qualified staff, funding is also an issue in special education, with more costs being covered by local taxes over time as opposed to state and federal dollars.

As with general education, special-education funding is a combination of state and federal money (which may include Medicaid reimbursement) and local taxes. Expenditures for the 2017-18 school year added up to approximately $142.6 million, according to the Montana Office of Public Instruction’s Special Education Report to the Legislature presented in January.

Students with disabilities are entitled to a Free Appropriate Public Education under the Individuals with Disabilities Education Act from ages 3 through 18, but may continue through age 21. Students are eligible if they meet one or more disability categories (there are 13) and demonstrate a need.

Illustrated in the report was a bar chart that showed a trend that, “over time, the costs of special education have shifted so that the largest portion of the costs are paid from local funds, instead of state and federal funds,” said state Student Support Services Administrator Frank Podobnik.

“The increases in the costs of providing special education have outpaced increases in state and federal funding, so a greater proportion of the costs have to be funded through local tax dollars. When the Education of All Handicapped Children Act was passed in 1975 there was a promise for the federal government to fund 40 percent of the excess costs of providing special education and related services. The federal funding has not ever reached the 40 percent mark,” he said.

In the 2017-18 school year, the local share of money used to fund special education was 48.45 percent; the state share 30.45 percent and the federal share 21.10 percent, according to the report. This is in stark contrast to the 1989-90 school year when the state share was 89.49 percent, the federal share 11.38 percent and the local share 7.12 percent.

“The greatest share of funding for increased costs of special education has come from the local general fund budgets,” the report noted. “Local school districts have absorbed the increases in costs of special education by increasing their contribution to over $69 million dollars in state fiscal year 2018. This amount represented over 47 percent of the total expenditures for special education.

“The need for public school districts to expend local funds to cover the cost of special education presents a significant challenge to districts. However, another dimension of the challenge public schools face when they budget for special education is the relatively unpredictable nature of special-education costs, particularly for small districts.”

One of the issues with lagging state funding, is that unlike general education, there is no current law in place to provide automatic, annual inflationary increases, which House Bill 27, sponsored by Rep. Moffie Funk, D-Helena, seeks to build in.

“With special-ed payments we always have to ask to approve inflationary increases and it doesn’t always happen,” Podobnik said.

The bill also proposes revising how money is distributed with a higher percentage of funding allocated to special-education cooperatives to cover administration and travel costs and decreasing other allocation percentages.

Podobnik said this is the third legislative session a bill like this has been introduced. The bill is currently pending in the House Appropriations Committee.

Reporter Hilary Matheson may be reached at 758-4431 or

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