Spring ISD warns state SHARS changes could cut millions from special‑education budget

Dr. Lupita Hinojosa, superintendent of Spring Independent School District, told the board on Feb. 18 that changes to federal and state SHARS reimbursements — driven by a federal audit of Texas’ billing — are creating substantial budget uncertainty for the district’s special‑education program.

The district expects its SHARS revenue for 2024–25 to be about $2.5 million, Miss Westbrooks, staff member, told trustees, but initial state calculations reversed that expectation and showed the district owing roughly $250,000. "So that's a swing of about $2,700,000," she said. The district has requested an informal review from the Texas Health and Human Services Commission (HHSC) and has submitted detailed transportation logs and supporting documentation.

Why it matters: Spring ISD’s special‑education program runs at far higher cost than the state funds. Miss Westbrooks said the district spent approximately $42.6 million on special‑education services in 2023–24 while state aid covered about $27 million, leaving an unfunded gap of roughly $15.6 million that SHARS reimbursements help offset. If the SHARS revenue is reduced or the district is required to repay past funds, the district would need to use fund balance or cut other expenses to cover the difference.

What trustees were told and asked - The district traced changes to a 2017 federal audit of Texas’ SHARS billing. The federal audit led to revised state calculations and a requirement that districts obtain parental consent for Medicaid billing. The district said those changes reduced the number of students that can be included in the reimbursement numerator and narrowed what transportation costs are reimbursable. - Miss Westbrooks said one example is that an aide on a bus can now be included in SHARS claims only when the aide provides medically necessary services while the student is on the bus. She described other tighter documentation and claim‑filing requirements. - Trustees pressed how the district will cover any shortfall. Miss Westbrooks said the district would use fund balance if necessary, noting the services already were provided and staff already paid. "We're gonna provide the services regardless of whether or not funding because we're required," she said. - The district reported it had turned in bus logs and other documentation and is awaiting HHSC’s review; Miss Westbrooks said the timing and outcome are at the agency’s discretion and that informal reviews had previously taken long periods in other districts.

Context and constraints - The board heard that SHARS payments historically have reached as high as about $7.6 million in some years for Spring ISD. The district said it maximized federal ESSER funds in 2023–24 and added to fund balance while still recognizing special‑education cost pressure from higher vendor/contracted services tied to staff vacancies. - Trustees asked about internal monitoring and the district replied the changes were made at the state level and communicated to all districts after the audit results; the district has since tightened campus processes, increased monitoring and training, and worked with third‑party vendors to audit claims before submission.

What the district is doing next - The district said it has formally requested an informal review from HHSC and supplied supporting documentation, including transportation logs. Miss Westbrooks said the district expects a revised IEP (individualized education program) ratio calculation but cautioned the district’s best estimate is that any recovery will be less than the $2.5 million originally budgeted for 2024–25.

Ending - Trustees were warned that SHARS uncertainty, combined with vacancies, increased use of contracted services and maintenance‑of‑effort rules, contributes to an already stressed special‑education budget. The board asked administration to provide updates after HHSC completes its informal review and to include any revised SHARS figures in the March budget discussions.