MDE: special education pupil counts and costs rising; cross‑subsidy aid expanded

Kathy Erickson, director of school finance at the Minnesota Department of Education, told the Senate Education Finance Committee on Jan. 21 that state special education pupil counts and related expenditures have increased in recent years and that several spending categories are driving the growth.

Erickson said state special education aid is a composite of multiple calculations — initial aid, excess‑cost aid, special transportation, charter tuition adjustments, a hold‑harmless provision for districts, cross‑subsidy reduction aid and homeless transportation aid — and that the department loads a single state special education payment into its payment system even though many calculations underlie it. "Unlike many of our other special ed or other funding formulas that use a pupil count to drive funding, state special education uses a reimbursement basis for calculating our aids and rates," Erickson said.

What the department reported to the committee: - Cross‑subsidy reduction aid: Erickson said distributions increased substantially in recent years after the state enlarged the distribution rate. Fiscal 2023 distributions were about $56 million (about 6.43% of whatever baseline distribution was…