Analysts: Michigan special education reimbursement still leaves districts with roughly $601.5 million in uncompensated costs

LANSING — House fiscal analysts told the House Appropriations Subcommittee on School Aid that while special education appropriations have increased in recent years, districts still incur uncompensated special education costs.

Jacqueline Mullins said the special education appropriation totals roughly $2.6 billion in the current fiscal year, split into about $2.1 billion in state dollars and $533 million in federal funding. She said part of the state’s reimbursement requirement flows from the Durant court case, which requires the state to reimburse a specific percentage of special education and special transportation costs.

Mullins told the subcommittee that total uncompensated special education costs statewide — the gap districts still must cover after federal, state and local special education mills — amounted to about $601,500,000 in the most recently available fiscal year cited in the presentation (Mullins referred to that year as “FY ’20 ’3”).

Mullins also explained that the special education trend lines shown in the slides used FTE (full‑time equivalent) counts rather than head counts: “This is an FTE count, not necessarily a head count,” she said, noting that some students may be counted as fractional FTEs depending on the services they receive.

Committee members asked analysts to provide a head‑count breakdown so legislators could better understand whether special education enrollment or intensity of services had shifted. Members also raised concerns about how mainstreaming practices and increased identification (for example, autism and ADHD diagnoses) might change classroom staffing needs and the financial implications for districts.

No formal action was taken; analysts said they would provide requested follow‑up data to the subcommittee.