Task force reviews high‑cost models, student‑based proposals for special education funding

Members of the Special Education and Related Services Funding Task Force spent much of a day reviewing how other states pay for high‑cost special education and considering whether Kansas should move from its current mix of categorical aid and catastrophic payments to a student‑based formula or to a broader reimbursement approach.

Jennifer Light, senior fiscal analyst with KLRD, told the task force that a 2023 ECS survey found 21 states use a high‑cost services model and walked members through Colorado and Massachusetts as close examples. “According to this survey, there were, there are 21 states which use a high cost services model for special education,” Light said. She noted Colorado and Massachusetts were chosen as models because they are institutionalized in statute or state law and because Massachusetts recently expanded its program under its Student Opportunity Act.

Why this matters: the method used to pay for high‑cost special education affects how much state money is needed, how quickly districts receive funds and whether districts that already carry the largest shares of special‑education costs would gain or lose under a new formula.

Models and cost estimates

Dr. Harwood, a Kansas Department of Education staff member who presented alternative funding approaches, reviewed two ends of the policy spectrum. He described a statewide “100% reimbursement” model (modeled on Wyoming for the task‑force exercise) in which districts would be reimbursed for eligible special‑education expenditures above federal funds; the packet used 2023–24 actual costs and showed a total cost around $954,000,000 compared with the state appropriation that year of $528,000,000 — an increase of roughly $438,000,000 if the state paid full reimbursement. “So this is a little bit different than the other models we've talked about because we have been talking about student based models on 24‑25 data. This had to be 23‑24 because that's when we had the total amounts for,” Harwood said.

Separately, a work group led by April Hilliard, director of the Butler County Interlocal, recommended a student‑based weighting approach similar to Maine’s model. The group offered two student‑count weightings: a higher set of weightings that would have produced roughly $973,000,000 in total special‑education funding (their “money‑not‑an‑object” scenario) and a lower, more fiscally constrained set (weights of about 1.55 and 1.25 in the task‑force examples) that would have reduced the estimate to about $745,000,000 — nearer to a scenario covering roughly 92% of excess cost. Hilliard explained the student‑count approach “allows for simplicity because it's simply based on does a student have an IEP? If they do, they're gonna receive a weighting.”

Tradeoffs and implementation concerns

Task‑force members and presenters repeatedly emphasized tradeoffs. Hilliard and others warned that moving from reimbursement to a student‑based model without additional state dollars would reallocate existing dollars and create “winners and losers.” “When you lower the weightings, you end up with more districts that receive less funding under the student based model than they did under the reimbursement model,” Hilliard said, noting maintenance‑of‑effort rules could force districts to make up shortfalls locally.

Interlocal cooperatives and special‑education cooperatives also figured centrally in the discussion. Several presenters stressed that many Kansas districts receive services through coops; changing the flow of dollars from a reimbursement model to a student‑based allocation would require renegotiating interlocal agreements and could change cash flow for cooperatives that currently rely on ‘‘flow‑through’’ payments from district general funds.

Operational fixes proposed

Corinne Wolken, director of special education at A and W Interlocal, proposed operational changes to reduce unpredictability in the current Kansas system. Among the suggestions: consolidate the existing four pots (catastrophic aid, transportation, Medicaid replacement and special teacher reimbursement) into a narrower set of allocations; set a minimum, predictable special‑teacher reimbursement amount that would be paid first; and prorate transportation after that amount is set. Wolken also recommended using prior‑year claims to seed initial payments earlier in the year to ease interlocal cash‑flow problems: “Using last year's numbers, using the previous year's numbers, in those initial payments … the initial payment can be made before October and then make the adjustments for your current year's numbers later on,” she said.

High‑cost examples from other states

Light reviewed details from Colorado and Massachusetts. Colorado maintains a $4,000,000 categorical “Tier C” allocation; the state also adopted a high‑cost trust fund in statute with an initial $2,500,000 deposit from marijuana tax revenue that was used only for interest earnings and later withdrawn. Light said that although that trust exists in statute, Colorado had not funded supplemental trust awards in recent years. Massachusetts’ Circuit Breaker program reimburses districts once a per‑student threshold is reached; for fiscal 2024 that threshold was $51,721 and the state has moved to reimburse 75% of eligible costs above the threshold (the state appropriated about $27,800,000 for that component in fiscal 2024 but received eligible claims of roughly $33,800,000). Massachusetts also added a reserve‑relief fund (roughly $20,000,000 distributed in the initial year) to help districts whose current‑year costs rise substantially above prior‑year levels. The task force discussed the complexity of the Commonwealth’s extraordinary‑relief and reserve‑relief tests (including the 25% and 7.5% triggers described in the packet).

Questions, data and next steps

Members pressed for more and clearer numbers. Several legislators asked how many Kansas students might qualify under different thresholds; presenters said that statewide prevalence and population both matter and that the group is still collecting some cross‑state comparisons and district‑level data. Dr. Harwood and district presenters said local population differences, prevalence rates and economies of scale strongly shape how any formula affects a given district.

No formal votes were taken. The task force directed staff to continue analysis and to circulate follow‑up information (for example, more precise district‑level examples, the school‑by‑school counts for weightings, and answers to specific math/typo questions in the Massachusetts examples). The task force also discussed whether to meet again in October; scheduling remained unsettled.

What was not decided: whether Kansas will adopt a student‑count weighting, expand catastrophic/reimbursement funding, or pursue a hybrid. Presenters recommended further modeling that layers likely legislated funding levels onto the alternative formulas so the legislature can see both distributional effects and required additional appropriations.

Ending

Task force members said they wanted additional district‑level and implementation analysis before recommending a model to the legislature. KLRD will include the task force’s work in the statutorily required report; task force members left open the possibility of continued meetings into the next legislative session. Several presenters asked the panel to prioritize clarity on funding timing and maintenance‑of‑effort consequences before the group endorses a single design.