Committee hears that Kansas special education funding remains well below statutory 92% target

The Committee on K-12 Education Budget reviewed Kansas State Department of Education (KSDE) calculations showing special education state aid for the current biennium is far short of the statutory goal of covering 92% of excess costs.

KSDE Deputy Commissioner Frank Harwood told the committee that KSDE’s calculation of statewide excess costs is about $796 million and a 92% share would be roughly $733 million; the current appropriation is about $601 million, leaving a shortfall of about $122 million.

Why this matters: special education funding directly affects school district budgets, local tax levies and district services. Lawmakers and KSDE staff discussed both how the state formula calculates aid and what additional state dollars would be needed to move toward the 92% statutory target.

Harwood summarized KSDE’s method for calculating the “excess cost” base: start with district special education expenditures reported to KSDE (fund 30), adjust for expected cost changes (KSDE applied roughly a 5% inflation assumption in their estimate), subtract state and federal special education aid and Medicaid reimbursements, then apply the 92% statutory goal. Harwood said the current formula yields an estimated excess-cost total of about $796 million, 92% of which is about $733 million; KSDE’s enacted appropriation is $601 million.

Harwood and Fiscal Analyst Jennifer Light outlined the categorical distribution: catastrophic aid (limited to twice the teacher reimbursement cap and subject to a 75% reimbursement rule), a $9 million “Medicaid replacement” pool allocated per Medicaid-eligible student, transportation reimbursements for IEP-mandated student transport and teacher travel, and the special teacher reimbursement pool. KSDE told the committee the per‑teacher reimbursement distributed in 2023–24 averaged about $31,670 per FTE teacher-equivalent. Harwood noted that district reporting uses FTE (full-time-equivalent) rather than headcount — KSDE cited roughly 92,000 students with IEPs but only about 29,000–30,000 special-education FTEs because many IEPs represent part-time services (for example, speech-language).

On reappropriations and small balances, Light and Harwood described a $21.6 million SGF reappropriation from FY2024 into FY2025 that includes money originally designated for state foundation aid, supplemental aid, juvenile detention, the Flint Hills Job Corps grant and special education state aid. The Special Committee on Legislative Budget removed roughly $2.1 million of those reappropriations. Harwood advised the committee he did not recommend lapsing the small special-education reappropriation amounts into the general fund: ‘‘If you reappropriate it, we can use that next year and we can try to send it out next year. If you lapse it … you could find yourself violating maintenance of fiscal support,’’ he said, explaining the risk to the state’s maintenance‑of‑fiscal‑support calculation.

The committee heard that KSDE and the Governor proposed different multi‑year phase‑ins to move toward 92%. Jennifer Light said the agency’s FY2026 enhancement request included about $87.6 million SGF as year one of a three‑year plan. She said the Governor’s recommendation instead staged increases over four years, with about $72.6 million per year to reach 92% by FY2029. Later in the discussion Harwood said the State Board of Education’s revision to its request was approximately $82.692 million (a number he described as a revision to the board’s earlier request to the governor).

On distribution of any additional dollars, the committee reviewed a one‑time distribution method KSDE used for funds provided above the FY2024 baseline under 2024 House Sub. for Senate Bill 387. Harwood said the State Board designed a temporary equalization approach that allocates additional money proportional to each district’s local special‑education expenditure share (local effort); he described it as ‘‘serviceable’’ in the short term but questioned its viability as a permanent method if the supplemental funding became a larger share of total special‑education aid.

Committee members pressed KSDE on program details, auditing and cash‑flow mechanics. Harwood described that districts do not receive their full special‑education payments until October 15 each year (KSDE’s final settlement occurs in June), explaining why district fund balances can appear large early in a fiscal year because districts must carry cash until the October payment.

Ending note: lawmakers asked staff to evaluate several phase‑in choices in coming days. Harwood said the State Board’s plan would reach 92% by FY2028 under its schedule and the Governor’s approach would reach it later; members said they would weigh those schedules in upcoming deliberations.