Education Funding

Feds Loosen Rules on Cutting Special Ed. Spending

By Nirvi Shah — August 31, 2011 5 min read

New guidance from the U.S. Department of Education has put another chink in the once-solid armor protecting special education spending.

In the past, federal law was interpreted to mean that once a district set its special education budget, it could not be reduced permanently except for very specific reasons. The so-called maintenance-of-effort provision was built into special education spending rules to buffer students with disabilities from changes in services triggered by the ups and downs of public spending and politics.

One of the few exceptions to the maintenance-of-effort rule is when a district experiences an actual decrease in expenses, such as when an experienced, highly paid special education teacher retires or a high-needs student leaves a district. Cutting the special education budget for almost any other reason meant a district was running the risk of losing its share of federal funds.

But a letter to the National Association of State Directors of Special Education in June from the Education Department now says otherwise.

A district “is not obligated to expend at least the amount expended in the last fiscal year for which it met the maintenance-of-effort requirement. In other words, each year’s [district] maintenance-of-effort obligation is based on the actual amount expended in the immediate prior fiscal year,” wrote Melody Musgrove, the director of the office of special education programs.

That means that if districts lower their special education spending for any reason, whether or not it’s because of the exceptions built into the law, the Education Department says it’s now permissible to never resume spending at the previously higher level.

The shift has special education advocates worried.

“In essence, what the department has done by issuing this interpretation, they have created one more way in which [districts] can reduce their local spending, which is not articulated either in statute or regulation,” said Candace Cortiella, who runs the website IDEA Money Watch, which tracks special education spending.

Last month, Kathleen B. Boundy, a co-director of the Center for Law and Education, based in Boston, sent Ms. Musgrove and OSEP Deputy Director Ruth E. Ryder a letter challenging their new position about districts’ responsibilities regarding special education spending. Ms. Boundy asked that the guidance be rescinded.

“This is illogical and is not consistent with the language of the statute. This is not a matter of interpretation, but a misreading or misapplication of the law,” Ms. Boundy said. “Districts are required to maintain the level of special education expenditures from year to year based on a notion that costs rarely decrease, the population of eligible children is predictable, and Congress in granting ... funds for the education of children with disabilities mandated that these federal dollars were being used to pay for the excess costs of educating this vulnerable population of children, not as a substitute for local and state funding.”

Recession No Excuse

The Education Department said it is still reviewing Ms. Boundy’s letter. But, in an Aug. 29 email, federal education officials said they think school districts’ obligation to provide students with disabilities a free, appropriate education as required by the Individuals with Disabilities Education Act will keep them from cutting spending haphazardly.

“We have some confidence that [districts] will continue to provide the funding needed to meet the ... obligation,” the email said. “Historically, because the cost of services has increased, most [districts] have needed to provide at least as much funding as in the prior year to meet this obligation. It would not be appropriate for a [district] to reduce spending simply because of ‘financially challenging times.’ ”

However, the American Association of School Administrators, in Arlington, Va., estimates that 10 percent of the nation’s districts will not be able to keep special education spending level this year, and 15 percent won’t be able to do so next year.

“School administrators have been forced to cut to the bone when it comes to general education costs, but current IDEA [maintenance-of-effort] requirements prohibit them from making the same difficult cuts to special education,” said Sasha Pudelski, a legislative specialist for the aasa.

“Fairness dictates that all programs and populations share in the burden of cuts, rather than holding a single program exempt from the cuts,” she continued. “If the situation was reversed and special education budgets received all the cuts while general education students’ budgets were left entirely intact, parents and school leaders would never stand for that.”

Special education budgets haven’t gone entirely untouched. Seven states—Alabama, Iowa, Kansas, New Jersey, Oregon, South Carolina, and West Virginia—have requested permission to cut spending on students with disabilities, citing unforeseen declines in financial resources—an option that had never been used by any state. Some have been granted their wishes.

“You can only protect this pot of money so carefully for so long before people are going to be upset,” said Nancy Reder, the deputy executive director for governmental relations for the National Association of State Directors of Special Education, in Alexandria, Va. Bill East, the executive director of the group, wrote the February letter to Ms. Musgrove that triggered the Education Department’s informal guidance on reducing special education spending.

“At the same time,” added Ms. Reder. “I don’t want services for kids to be cut.”

Part of the solution is more federal funds for special education, said Lindsay Jones, the senior director of policy and advocacy services for the Council for Exceptional Children, in Arlington, Va.

“CEC has long advocated for full funding for IDEA,” Ms. Jones said. When the law was crafted, it allowed the federal government to contribute up to 40 percent of the cost of educating students with disabilities. The current contribution is 16.5 percent. Members of Congress have proposed bills to increase the share of federal spending on students with disabilities, but none has passed.

“Everybody is taking a magnifying glass to their budgets,” Ms. Jones said. “But at the end of the day, these are individual services and there are lots of individualized needs for technology that are expensive.”

A version of this article appeared in the September 14, 2011 edition of Education Week as Rules Relaxed on Budget Cuts to Special Ed.

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