Special Needs

Special education funding is in jeopardy—and nobody knew

The recent revelation that New Mexico hasn't been living up to its share of a federal special education formula has prompted outrage among some state lawmakers. But even more troubling, they say, is how the Public Education Department left state them in the dark about the problem in the first place.

"We're kind of Johnny Come Lately's in knowing what's going on," state Rep. Mimi Stewart, D-Bernalillo, who chairs the House Education Committee, said at a HEC hearing earlier this week.

The issue stems from the Individuals with Disabilities Education Act, an initiative under the US Department of Education that grants federal special education money to the states. Under IDEA, each year, states must earmark as much or more money for special education as they did the year before.

But in fiscal years 2010 and 2011, New Mexico spent too little on special education. What's more, the amount of underfunding is in dispute. While PED claims that the spending was off by a total of $43.5 million, USDE claims it's more like $93.4 million, according to a memo by the Legislative Education Study Committee. (In total, New Mexico's special education programs cost approximately $838 million for 2010 and 2011.)

Now, New Mexico could be on the hook to make up for the shortfall by finding money elsewhere. One way out is by asking USDE for a waiver for states that experience "an unforeseen decline in financial resources." (PED did submit a waiver request back in August, but it was declined in December. Now, the state has until Feb. 1 to resubmit it.)

PED Secretary Designate Hanna Skandera tells SFR that the problem dates back to late 2009, a year and a half before she was named to run the agency. Then, the feds told PED that it might not meet the funding threshold required to get federal funding under IDEA.

Skandera says the discrepancy between PED's and USDE's numbers is a result of how PED reports its budgeting.

"We include in special education funding both our gifted kids and our students with disabilities," Skandera says. "For the federal folks, we cannot include our gifted students. That's not allowable by law."

Yet some doubt that such a large discrepancy would come solely from gifted student programs.

"That doesn't make any sense at all," Stewart, pointing out that gifted students make up roughly 4 percent of all students statewide, tells SFR. "Gifted students are not half the budget."

Other data seem to favor the federal estimates over the state's. LESC—which employs a full-time staff of education and budget experts—puts the total shortfall at just under $88 million, more that twice what PED claims it was. A LESC memo released this week attributes the difference between the committee's estimates and the federal ones—around $5.4 million—to USDE's policy of not including gifted programs.

Skandera has also suggested that some school districts are doing a better job serving their special education students in recent years.

"Some of them actually exit special education, or improve, if you will," she said of special-ed students at the hearing. "The irony is: yes, when students improve, the weighting in the funding formula actually reduces. So it's a catch-22."

Officials from Rio Rancho Public Schools, for instance, testified that between 2009 and 2010, 175 students in special education went from "maximum services" to "extensive services," leading to cost savings.

That point sent state Rep. Dennis Roch, R-Colfax, on a rant about states' rights.

"We take the strings attached because federal money is involved, and the strings attached are choking local control," Roch, who currently has a House Joint Resolution calling for New Mexico to assert its 10th Amendment rights, said at the hearing. "Maybe we shouldn't always take the handout from the federal government because the strings will strangle us."

Yet IDEA, which has been around for two decades and has the participation of all 50 states, is hardly controversial. What's more, most states have been able to keep up with it even through the recession.

"[Since 2008], there's only been seven states that have requested a waiver," Stewart said at the hearing. "Two of them have been denied and one has been partial[ly] denied—so it's not like every state in the nation has come forward with these issues."  

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