District officials warn state shift to high-cost special-education aid could widen inequities

WAUNAKEE, Wis. — At its June 4 budget committee meeting, Waunakee Community School District staff said they are closely monitoring state budget talks after receiving notice that discussions may be shifting funding away from general special-education categorical aid toward a high-cost special-education aid program that requires districts to apply.

A staff member (name not specified) told the committee, "We got a very concerning email from the school administrators alliance... the conversations in the capital were shifting off of state special ed categorical aid, and towards something called high cost specialty." The staff member said that shift is concerning because "not every district applies for that" and it requires significant administrative work to participate.

The district explained why the distinction matters: special-education categorical aid is a baseline reimbursement delivered to eligible districts, while high-cost special-education aid is a targeted program that districts must apply for and that is subject to proration across participating districts. The staff member said proration works by summing claims across participating districts and prorating the available appropriation, so participation and the size of the appropriation determine actual reimbursement percentages.

Tiffany Volk, Staff member, described Waunakee’s administrative experience, saying the district was among the top performers in filing high-cost claims for 2023-24 because of staff work earlier in the year. "Our reimbursement for the 23-24 process that we put in was in the top 10 in the state even though our district is nowhere near the size in the top 10 in the state," Tiffany said, crediting the effort of district staff. Tiffany and Allie have presented the district’s process at statewide conferences and been contacted by other districts about how the district maximized reimbursement.

Committee members raised practical concerns: one asked whether Waunakee could scale up to fill out the paperwork if the state pivots entirely to the high-cost program; staff replied the district is "incredibly well positioned" but warned many districts lack the administrative capacity. Another member noted timing issues: staff said DPI had not yet posted the district’s final reimbursement numbers for recent claims, making planning difficult.

Staff told the committee the district’s general fund subsidizes special education significantly and that the state’s actual reimbursement appears to be below the previously expected 32.5 percent; staff cited a DPI-quoted rate of roughly 29 percent in current communications. A staff member said that this year the district’s special-education costs required about $500,000 more from Fund 10 than the prior year.

The committee was told that high-cost special-education aid typically requires demonstrating expenditures above a per-student threshold (one staff member referenced a $30,000 threshold for certain high-cost cases), and that the program’s timing and administrative burden make it a different kind of funding stream than categorical aid.

Ending — District staff said they will continue to monitor the state budget and urged statewide attention to ensure any changes in the funding approach do not exacerbate equity issues between districts that can and cannot participate in targeted programs.