Just as important: Funding conundrum
By Heather Graves
BROWN COUNTY – Understanding the special education system in the State of Wisconsin can be challenging.
Add funding to the equation and comprehension is likely headed into a tailspin.
Federal and state mandates require all public school districts provide special education services to students who require them.
The state picks up a portion of the tab, with districts left to make up the difference – which they do with transfers from their general funds.
Last year, Green Bay Student Services Director Claudia Henrickson said Green Bay transferred more than $30 million from the general fund into the special education fund.
She described it as a “vicious cycle.”
“That is $30 million that didn’t go to the general education students that lowers your class sizes, gives them even more resources, things of that nature,” she said. “So, when we say the students with disabilities are regular students first, that means we are taking away from them (financially) anyways and may not be getting everything that the general education (students) aren’t getting either.”
This year’s budget proposal anticipates a transfer of $33.4 million.
Historically, special education funding in Wisconsin has seen drastic fluctuations over the last half century – hovering around 70% reimbursement in the 1970s to under 25% in 2018.
Just as no two special education students’ needs are the same, the ideology surrounding special education funding differs from one politician to the next.
The state seems to be entangled in a political battle of differing opinions on how much funding is needed, and who is responsible for said funding.
Gov. Tony Evers’ proposed budget called for an increase to 60% reimbursement, more than doubling the current level of 28.18%.
Republican legislators described the increase as unrealistic.
“What seems to be lost on a lot of people in public education is that there are many other aspects of the state budget that have to be taken care of by the Legislature as well,” State Rep. Jeremy Thiesfeldt (R-Fond du Lac) said, “and as legislators, we have to balance that.”
Democrats, on the other hand, said it’s necessary when looking at what is needed to adequately provide services to special education students.
“Unfortunately, Wisconsin does not have a strong history of providing special education reimbursement rates that actually meet the needs of kids and teachers,” State Rep. Kristina Shelton (D-Green Bay) said. “It is our responsibility to provide those and to do so with care and with a student-centered framework.”
The Republican-authored budget, which Evers signed July 8, includes an increase of about 2%, bringing the reimbursement level to 30% by the budget’s second year.
Thiesfeldt, chair of the Assembly committee on education, said this budget addresses the decline in special education reimbursement brought on by years of seeing little to no change.
“We are making progress,” he said. “In the year around 2000 or 2001, special education reimbursement was up around 35-36%. Those were the tail-end years of Tommy Thompson as governor, and then it started to dip after that, and those were the years when Scott McCallum and then Jim Doyle were governors, and then of course Scott Walker after that. And it was pretty much a consistent decrease, slow decline over most of those years. Until just the last couple of years, where there was recognition that we needed to boost this up again.”
Thiesfeldt said just as the decline was slow, the increases will also happen over time.
“We aren’t just going to see an instant increase – as was expected by the governor’s budget,” he said. “That is not realistic when you have so many other areas of pressure in the budget to suddenly boost that funding to where it was.”
According to Wisconsin Department of Public Instruction data, the percentage of students with a known disability who require an individualized education plan across Wisconsin has increased from 13.7 percent in 2016-17 to 14.2 percent in 2020-21.
At the same time, enrollment counts across the state fell from 863,881 in 2016-17 to 829,935 in 2020-21.
As statewide student counts continue to decline, the proportion of students with an IEP among that population has risen.
Because state funding is tied to district enrollments, which are declining, the proportional increase in special education students often puts a strain on districts.
Shelton said the lack of a significant increase continues to widen the funding gap across districts.
“Across the state, our school districts face a $1 billion funding gap in special education costs,” she said. “This funding gap has had both real and serious fiscal implications on districts across Wisconsin.”
Thiesfeldt said the federal money districts receive through COVID-19 relief funds can also be applied to special education expenses.
“So school districts, in addition to the state money, with that additional federal money are going to have vast resources for special education in the next two years as they come out of the pandemic to serve even more students that have fallen behind, because of not having in-person instruction for a long period of time,” he said.
Green Bay Superintendent Steve Murley said one-time funds create unstable situations for districts.
“It creates a funding cliff,” Murley said. “When it is gone, how will we continue to fund those things? They want us to pay for the deficit with dollars meant to remedy the damage caused by the pandemic? And then when the (relief) funding ends, we will have to take the deficit, which will have grown dramatically over three-four years, out of our general fund again? That sounds like a really bad idea.”
Thiesfeldt said the “goal of special education is students won’t need special education.”
“There is no way we are going to be able to maintain that level of funding that is coming from the federal government once that funding ends,” he said. “The goal is to put massive amounts of resources into it over a short period of time, use those resources to catch students up and hopefully things will stabilize in the next couple years.”
Shelton called it a Band-Aid.
“While this additional funding is certainly a step in the right direction, our students, families and teachers know that it’s still too little to cover the rising costs of special education,” she said. “Without the state stepping up and doing its job to meet the 60% threshold, districts will be forced to continue to pick up the tab by reallocating more money, year (after) year, from their general funds.”
Thiesfeldt said none of the extra dollars from the state or the federal government in special education funding are going to make a bit of difference if districts don’t use them for areas of academic need.
“It is really important that schools need to realize these federal funds are not going to be at this level forever, and they need to take advantage of it,” he said, “making sure they are investing those monies in the proper spot.”
As a former Green Bay school board member, Shelton said district planning is hindered by the lack of “consistent” and “significant” reimbursement funding.
“Our districts need to be able to financially plan, years in advance, to be able to prioritize the needs of their students and community,” she said. “Funding the special education reimbursement gap of more than $1 billion for Wisconsin school districts would transform the way districts operate. It would allow administrative leaders and their teachers to prioritize funding for other incredibly important projects and initiatives that enhance academic achievement and well-being for all kids.”
State Rep. David Steffen (R-Howard) said the state hits the 30% goal with the 2021-23 biennial budget, which meets the state’s financial portion of commitment as it relates to special education.
“I think (it’s) indicative of our overall support for ensuring that those who require additional services through our public education system are receiving it,” Steffen said. “So we are meeting or exceeding the expectations that have, for years, been set in terms of a goal for state participation in special education.”
Steffen described the governor’s proposed budget as a “series of liberal wish list items.”
“We didn’t really take it seriously,” he said. “So, it was dismissed pretty quickly, and we started from scratch.”
Murley said some increase is better than no increase, but it doesn’t fix the broken system.
“Anything short of 100% funding of special education costs takes money out of our regular education classrooms and pits students and programs against each other,” Murley said.
When districts fall short, he said they have to dip into the general fund to make up the difference.
“Special education costs already exceed the support provided by the state and federal government,” Murley said. “We already have an annual deficit for which we are required to rob the general fund to pay. That cost is borne by our regular education students.”
And it isn’t a struggle limited to the county’s largest school district.
Jennifer Garceau, executive director of student services for the Howard-Suamico School District, said even with the small increase coming with the new biennial budget, there is no way the district can provide the services required through students’ IEPs with just the dollars allotted to them through special education reimbursement.
“Therefore, we tap into the general fund, which then leaves less resources for all students,” Garceau said, “and even with the additional funds from general funding, we are still being super creative with our funding all the time. You are always thinking about how we are going to service all of our students, and you need to be as creative as possible.”
Rural districts are experiencing many of the same challenges.
“(The increase to special education reimbursement in this budget) is a good start, but it is not enough,” Pete Kempen, business manager for the Seymour School District, said. “Last year we transferred $2.25 million from Fund 10 into Fund 27. That is money that we can’t use for all student programming.”
Tammy Nicholson, director of pupil services for the Ashwaubenon School District, described it as a “balancing act.”
“I think when you look at the state in general, with the amount of districts in the State of Wisconsin that had to go to referendum because they aren’t able to repair buildings, which comes out of the general fund, they aren’t able to meet the mental health needs of kids, they aren’t able to do all of these things they need to do,” Nicholson said. “And I don’t want to say special ed is to blame for it, but there is only so much money to go around. The pot doesn’t get any bigger… When you are only reimbursing (pennies) on the dollar, that is not a lot of money, when it costs millions of dollars to support kids.”
Data visualization created UWGB 4th Estate Media
Pitting districts against each other
Nicholson said administrators at the helms of the special education departments throughout the state have to be creative to find the additional funds needed to make ends meet.
“There are many school districts that are – I know in Ashwaubenon and many of the other districts – constantly trying to find competitive grants to get more money,” she said.
Unfortunately, Nicholson said this inadvertently pits districts against each other – all vying for the same dollars.
“We have to do that,” she said. “But then it pits me against Howard-Suamico, or me against Green Bay or De Pere or West De Pere, because everyone wants that pot of money. So, it makes this competitive world. We have tried to break that down as directors as much as we can.”
Nicholson also said grant funds have cliffs.
“It is hard to hire people for a two-year grant position and say, ‘Well, we are hoping in two years we can apply for the grant again,’” she said. “When somebody is trying to raise a family and make a house payment, that is a really tough sell.”
Nicholson said it would be more cost-effective to fully fund special education.
“(I wish) we could just get the money and not have to spend all this time and energy applying for grants and hoping we get the money to staff,” she said.
Nicholson said oftentimes people think schools work in isolation, but in reality it’s a community effort.
“Brown County is in this together,” she said. “We are a great example of how we team together to do that. But how do all of these groups and businesses and nonprofits come together to really work to help our kids and our families navigate the world that we live in right now?”
Henrickson said Greater Green Bay area is fortunate to have generous community partners, such as the Green Bay Packers, the Optimist Club and The Boys & Girls Club, willing to support public education.
“But even they only have so much money that they are giving out to education,” she said. “So people are being very creative. And we have teachers doing GoFundMe pages, so that they can get wiggle seats in their classrooms.”
Across 50 states, there are 50 different ways to allocate special education funding.
A reimbursement system, which is what Wisconsin does, is in the minority.
According to the Education Commission of the States, as of 2019, Wisconsin is one of seven states with a reimbursement system for a district’s special education expenses.
Eric Syverson, a policy researcher at the Education Commission of the States, said comparing these like-system states is a challenge.
“Special education reimbursement policies vary quite a bit, which makes a simple comparison of rates challenging,” Syverson said. “For example, states may reimburse at lower levels than is in statute, like Kansas, or states may provide funding streams in addition to the reimbursement, like Minnesota.”
Among the seven, Wisconsin had the lowest reimbursement rate in 2019 at 28.18%.
The other six include:
• Michigan (28.61%)
• Minnesota (50% of the nonfederal special education expenditures for the prior year or 56% of the product of the sum computed using prior fiscal year data)
• Nebraska (reimbursed per hour, per specialist)
• Wyoming (100% not exceeding the amount reimbursed in the 2018-19 school year)
• Kansas (92% of excess costs – defined as costs over and above the average cost of educating a student)
• Rhode Island (up to 110% of the state median).
Thiesfeldt said he doesn’t see any reason why the state should have to fully fund special education.
“The state certainly is willing to pay a large percentage of that,” he said. “But districts should not be immune from having to transfer some money periodically from the general student funding into special education.”
In response to those who say the 30% isn’t enough, Thiesfeldt said “there is no amount of money that ever satisfies them.”
“There has never been a time where the public education advocates said ‘Yes, this is enough money for our needs,’” he said.
Steffen agreed, saying there will always be those who say it isn’t enough.
“But the 30% threshold has been considered the standard, the goal mark for state participation in that portion of the education system,” he said.
Shelton doesn’t consider 30% enough.
“This is much of the sentiment behind why I voted down the budget,” she said. “It had some good provisions that made it through the Joint Finance (Committee), yes, but it did not do nearly enough for our state. The governor’s proposed budget showed that we could have had a public education budget that prioritized the kids and people of this state first.”
Steffen said one of the challenges that exists if the state goes above 30% reimbursement is proper balance.
“One of the things schools have a tremendous amount of latitude on (is) who is considered special education,” he said. “And if that balance goes out of whack, there are concerns about people, individuals, students who are not truly special needs in terms of special education being pushed into that classification simply to get additional funding.”
Nicholson said districts have to follow state and federal guidelines when identifying special education students.
“We have to go by the federal criteria of what a specific learning disability looks like, and we have to go through those interventions with kids,” she said. “I think it is really important – students who have IEPs or 504s, they have a disability. It is not that they are just a little behind. It is not that they are just struggling a little bit with this and they need extra help, so give them an IEP. They have a disability, which is really an impairment that’s getting in the way of what they are doing.”
State Rep. Joel Kitchens (R-Sturgeon Bay) – who co-chaired the Blue Ribbon Commission on School Funding in 2018-19 – said by law, districts are required to spend whatever is needed to provide all students with an IEP the services they require.
“So when we increase the special ed aid, if we were to put it up to 50%, that money actually wouldn’t go to special ed kids, because they are going to get the same amount. That is sort of a fallacy of opinion – ‘You are not putting enough into special education, that is hurting special ed kids.’ It’s really not. It’s hurting the overall bottom line. But the special ed kids, (districts) have to spend that amount.”
Hendrickson agreed there are procedural safeguards in place so students who need services get what they need.
“There are laws, so our students are going to get what they need,” Hendrickson said. “It may not be the Cadillac, but they are getting what they need.”
But without full reimbursement, she said districts are left having to fend for themselves.
“When we fall short, then what happens is the money comes from the general fund,” she said.
This story was produced by the NEW News Lab, a collaboration of newsrooms that focuses on issues important to Northeast Wisconsin.
Next week: A place of belonging
Next week’s issue will feature a series supplement piece on Syble Hopp School.
The story looks at how the school supports county districts as it provides an educational option for students with intellectual and other developmental disabilities to reach their full potential.