RSU 04 budget workshop flags sharp rise in special-education Medicaid costs and out-of-district tuition

RSU 04 budget staff told the school board on March 5 that special-education expenses are a major driver of the district’s proposed fiscal 2026 increase, driven largely by higher MaineCare-reimbursable service claims and rising tuition for out-of-district placements.

District presenters said the special-education cost center (Cost Center 2) reflects higher billed services that the Department of Education pays up front and then deducts from the district’s subsidy. The district recorded a roughly $173,000 increase this year tied to MaineCare “SEED” services, staff said, and is proposing to budget for 20 out-of-district tuition slots—one more than last year—to reflect current placement needs.

Why it matters: The MaineCare SEED (school-based, medically necessary services) line and private tuition payments have been volatile and hard to predict in recent years. Board members and staff said underbudgeting those lines has been a recurring problem and that the district is trying to budget more realistically for FY26 to avoid midyear staffing and service shortfalls.

Details from the discussion

• Staffing and contracted services: Justin, identified in the meeting as director of special education, outlined the staff and contracted-service mix that supports students with speech, occupational and physical therapy, board-certified behavior analysts (BCBAs), psychological services and related services. Justin and other staff explained that some services are provided by district employees and other services are contracted because the positions are not typically included in collective bargaining agreements or because caseloads do not justify a full-time hire in-district.

• MaineCare SEED: District staff said MaineCare-reimbursable services (speech, OT, some behavioral supports and related services) are billed by special-purpose private schools and the state pays that portion on the district’s behalf, then withholds the district share from state subsidy. The presenters showed a multi-year chart of the district’s budgeted vs. actual spend and said recent years show a steady upward trend in claims and rates, contributing about $173,000 to this year’s increase.

• Out-of-district tuition: Staff said last year the district budgeted for 19 out-of-district tuition slots and that FY26 is budgeted for 20 slots. The presentation noted an anticipated increase to tuition costs, and Justin and Samantha (budget staff) said an “additional $82,000” of the tuition increase reflects the extra slot and anticipated rate increases.

• ESY and summer programming: Staff reminded the board that Extended School Year (ESY) and expanded summer programming were funded through federal COVID/ARP grants in recent years. Pre‑COVID instructional summer-school costs averaged about $19,000 per year in the district, while the district spent roughly $170,000 on an expanded ESY program during the COVID funding period. The proposed FY26 budget restores some ESY and summer-school funding in the general fund but does not include transportation or food-service costs for those programs, which sit in other cost centers.

• Staffing reallocation, SPS closure scenario: Staff reviewed two budget scenarios—one with Sabattus Primary School (SPS) open and one with SPS closed—and explained that total district staffing is not reduced in the closed scenario but is reallocated among remaining buildings. Presenters said some special-education positions are being recoded to better reflect where staff actually work (for example, self-contained program staff moved out of a historical “resource room” line into the appropriate self-contained program lines).

• Contract vs. hire tradeoffs and next steps: Justin and other staff said the district will evaluate bringing some services (notably psychological services) in-house if it is fiscally and operationally feasible, noting that on-site staff could provide more regular support to teachers and students. Staff said they will investigate that option further in the coming months.

Board-level context and constraints

Board members pressed staff on predictability and asked for clear reporting of past underbudgeting trends. Staff noted the district’s local entitlement allocation for special education was $411,000 last year and warned the district does not receive final grant allocations until late in the budget year, complicating cash‑flow and planning.

Ending

District staff said they will continue refining the special-education lines and provide additional detail to the board, including rosters and placement counts on request. No formal vote or policy decision was taken at the workshop; the meeting focused on budget presentation and informational direction to staff to continue work and return with further detail.