Subcommittee hears detailed debate on special education funding, Medicaid billing and Claremont shortfall

Members of the Subcommittee on Adequacy and Funding Sources devoted substantial time to special education funding, Medicaid billing practices for school services and a near‑term fiscal crisis in the Claremont School District.

Representative Ladd (Representative, New Hampshire House) and others reviewed recent fiscal numbers during the session: the transcript records a subcommittee discussion that the state’s total special education expenditures are roughly $977,000,000 per year and that roughly 85% of special education spending is locally borne. The transcript also cites approximate federal IDEA funding near $51,000,000, differentiated‑aid funding of roughly $68,000,000, and state special education aid figures that members cited as about $34,000,000 and “now up over $50,000,000” after recent budget action. Committee members said the catastrophic aid entry point is commonly discussed as about $70,000 per student, and that the current rules and reporting limits hamper attempts to estimate the effect of lowering thresholds.

Becky Wilson, director of governmental relations for the New Hampshire School Boards Association, briefed the panel on sources of district data and on the Medicaid‑to‑schools billing program. She told the panel that most districts that participate in Medicaid to schools already calculate hourly rates for billable, medically‑necessary services and that those hourly‑rate calculations could be used to estimate costs for the services that schools provide. She said, “the services that are already calculated, the hourly rates are for medically necessary services,” and that those rates are set by the state for reimbursement now but the reimbursement method is changing to a system that reimburses 50% of actual cost.

Wilson advised caution about using simple statewide averages. She suggested removing statistical outliers and said the information available from districts and the Medicaid billing system could be assembled into a distribution of student costs so lawmakers could estimate how many students would fall into cost tiers under alternate thresholds. She also emphasized privacy and administrative burden concerns with any request for student‑level cost data.

Committee members pressed for short‑term and medium‑term responses after hearing about the operational stress in Claremont. The transcript shows the Claremont district secured an $8 million revenue anticipation note to cover near‑term cash shortfalls, and that the board considered staffing reductions, delaying new hires, and bringing some high‑cost out‑of‑district students back in‑district to lower tuition expenses. Members said those steps illustrate the practical consequences for districts when reimbursements are prorated or delayed.

As a result of the discussion the subcommittee requested that the Department of Education and the Department of Revenue Administration provide district‑level distributions of special education costs, Medicaid‑to‑schools hourly‑rate summaries, and a count of students by cost bucket so the panel can model the fiscal effects of changing the catastrophic aid threshold or altering state share percentages. The panel noted SB57 — a separately created commission on special education costs — will also produce a report, but members said the subcommittee needs near‑term data to evaluate options that could be raised before the full committee deadline.

Ending: The subcommittee asked staff to prepare specific data requests for DOE and DRA and scheduled a follow‑up meeting to review the materials; no policy changes were adopted at this session.

Quotes in this article are attributed only to speakers who participated in the meeting and are drawn from the transcript, including Becky Wilson and Representative Ladd.