As special education needs rose through the last decade, federal and state funding fell off.
School districts have seen a widening gap between the cost of special education services and what state and federal funding covers — called a cross subsidy.
Gov. Tim Walz has proposed an additional $77 million in education funding to address the gap. That proposal stops the gap from growing but doesn’t cover the difference districts already face, which is in the millions of dollars for most districts.
The average gap in funding for school districts in the Association of Metropolitan School districts was $847 per pupil in 2017, according to Minnesota Department of Education reports. The gap was about $859 per pupil unit. Pupil unit is a measure that takes into account the types of services students receive — not an actual number of students.
Federal funding, which was set to cover 40 percent of special education costs has not even approached half that level, which peaked at 17 percent, said John Carlson, Rochester Public Schools executive director of finance. Currently, federal funding makes up about 8 percent of Minnesota’s $2.2 billion annual special education expenses.
The portion picked up by the state has increased in the last decade, but not enough to keep up with rising enrollment and rising medical, mental health or behavioral costs. Those expenses are rising faster than the overall cost of education.
“All districts are spending general education funds for special education,” Carlson said.
For this budget year, Rochester Public Schools had a more-than $16 million gap between funding and need for services. The district also made about $1.5 million in cuts to its general education budget. Those cuts accounted for more than 20 full-time equivalence staff reductions.
Carlson said general education funding from the state is falling short. Costs rise by about 3 percent per year, but the state increased general education funding by 2 percent last year.
Rising costs and rising special education enrollment paired with declining funding is putting a pinch on school districts large and small.
“The amount of revenue school districts must divert from their general fund to pay for mandated, but unreimbursed, special education services is not sustainable and jeopardizes the quality of public education in Minnesota,” said Joey Page, Byron Schools superintendent.
Byron’s per-pupil unit cross subsidy is nearly $700 per student, which equates to about $1 million annually.
While state and federal funding for special education has fallen off, school districts around the state saw increased demand for special education services. Rochester Public Schools has been working with medical professionals to identify children who could benefit from special education as early as age three, said Karla Bollesen, executive director of student services for Rochester schools.
“Almost every child is evaluated by three years old,” Bollesen said. “We continue to identify earlier and earlier.”
To qualify, students must meet criteria in one or more of 13 areas of disability defined by the Minnesota Department of Education.
In some cases, early services can mean the student needs fewer services later.
“If we can get in early and provide services, oftentimes we see that gap lessen and might not need services later on,” Bollesen said.
Understanding of autism has also increased in recent years.
“Parents are more knowledgable now than they were 20 years ago,” said Melissa Stenke, assistant special education director for Rochester elementary schools. “The spectrum is so broad.”
Understanding of emotional issues has also broadened, district officials said.
“The needs children are bringing to us are more complex and more intense,” Bollesen said.
Parents can chose to opt out of services and students are regularly evaluated to assess their needs for special education services.
Since the 2007-2008 school year, special education spending in the Rochester district has more than doubled — from about $20.2 million to about $44.8 million in 2016-2017.
In that time, the district has expanded special education services, including an intensive program at Harriet Bishop Elementary School.
The gap in state funding has almost doubled in that time — from about $8.4 million to more than $16 million.
Carlson and representatives from other school districts plan to make their case to lawmakers about the funding. Carlson said he isn’t sure of lawmakers’ appetite for that amount of specific spending.
“The priority has seemed to be, put as much as they can into the general fund,” he said. “They’re going to have to prioritize and make some tough decisions.”
Although budget priorities will have to be made, district officials say they won’t sacrifice quality of special education services to make ends meet.
“Ultimately, the needs of the students drive the support for the programs,” Stenke said.
Part of the rise in needs comes from open enrollment-students from outside the district who register at Rochester Schools for service.
“Because we’re outside of the (Twin Cities) metro, we do get students from smaller communities,” Bollesen said.
Some districts, known as intermediate school districts, are set up to serve special education students from a broader geographic range. This might seem like a costly measure for the district, but ultimately can help save money from a broader, statewide perspective.
If a neighboring district has a class with one or two students with intense special needs, it can be less expensive in terms of teacher-to-student ratio to place those two students in a district that is already serving four.
School leaders say they don’t single those students out.
“We don’t ever look at where they live or come from,” said Jared Groehler, Bishop Elementary School principal. “If they’re in our school, they’re our kid.”