Special education requirement could derail budget plans

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Wednesday, April 20, 2011
— School districts cutting employee wages and benefits fear they’ll be forced to buy things or hire people they don’t need to meet federal minimum-spending requirements, two area superintendents said.

Federal rules require districts to maintain the same level of special education spending from year to year. But in districts such as Parkview, all teachers—including special education teachers—are taking a pay cut next year and are beginning to contribute to their retirement and health insurance.

The result is less money going into special education, which could put the district in violation of the federal requirement.

“We automatically won’t be spending as much on special education because we’re paying all our employees less,” Parkview Superintendent Steve Lutzke said.

The federal government has some exemptions, “but one of them is not government-mandated pay cuts,” he said.

The Wisconsin Department of Public Instruction officials have discussed the issue with the U.S. Department of Education, but neither department can make changes to the requirement, said Rachel Zellmer, a federal fiscal monitoring consultant with DPI.

The requirement, called maintenance of effort, is part of the Individuals with Disabilities Education Act, and only Congress could approve an amendment, she said. DPI has made no formal requests to Congress for an amendment, but Zellmer advises school districts to contact their representatives.

If a district spent $100,000 on special education this year, for example, and salary and benefit cuts reduce the expense to $70,000 next year, the district would have to find a way to make up the $30,000 drop to keep spending $100,000 on special education, Zellmer said.

“That’s why some districts are in a panic because there’s also a cap on the revenue limit, so you have to find those costs somewhere,” she said.

The penalty for not meeting the requirement is to pay the amount of the spending reduction to the government, she said. The district in the above example would be required to fork over $30,000.

A district is better off spending the money on something rather than paying the penalty without any return, Zellmer said.

It’s an unintended consequence of Gov. Scott Walker’s budget repair bill, local school officials say.

“The only way to fix it is to spend more money,” Lutzke said.

Teachers and staff at Parkview will begin contributing to their retirement and health insurance costs and taking a 2 percent pay cut starting this summer. Those cuts to special education staff leave Parkview about $100,000 shy of meeting the requirement, he said.

He wonders if it means the district needs to “hire someone to make up that difference or go buy a bunch of stuff we don’t need,” but it’s not like the district has money to do that, either.

DPI officials this week plan to send out a list of options school districts could consider that wouldn’t require hiring additional staff or making unneeded purchases, Zellmer said. Those options will consider the flexibility within federal rules to transfer costs or give extra general education services to students with disabilities, she said.

DPI also developed a calculator for districts to determine if they’ll meet the requirement.

“Right now, most districts are very concerned that they’re not going to be able to prove maintenance of effort,” Lutzke said. “We’re all scrambling and looking to DPI for guidance on this.”

In Brodhead, teachers will begin paying half of their retirement and 12.6 percent of their health insurance premiums starting July 1.

“When we save a bunch of money on salary and benefits, that allows us to spend less, but the feds don’t want us to spend less … I’m not sure what the answer is going to be yet,” Superintendent Chuck Deery said.

He said the law had a good intent—encouraging school districts to spend local money on special education and not rely only on federal funding—but the unintended consequences created a weird situation.

He doesn’t know the financial impact in Brodhead yet, but he said a “fairly significant amount of money” goes to special education.

The Janesville School District does not have this problem, at least not yet, said Barb Hilliker, director of special education.

Hilliker said she is monitoring the situation to make sure staffing levels match the need.

Janesville teachers are protected from the effects of the budget repair bill until their contract runs out in 2013.

Last updated: 4:56 pm Thursday, December 13, 2012

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