Task force reviews Kansas special-education funding: 92% excess-cost goal, $9 million "Medicaid replacement," and local transfers

The Special Education and Related Services Funding Task Force met (date and location not specified) for a multi-hour session focused on how Kansas calculates, distributes and audits special-education funding, and on near-term problems districts say they are facing, including staffing shortages, cash-flow timing and the distribution of a $9 million “Medicaid replacement” payment.

Members of the task force heard presentations from the Office of the Revisor of Statutes, the Kansas State Department of Education (KSDE) and the Kansas Legislative Research Department (KLRD) that reviewed the statutory “excess cost” funding formula, the mechanics of distributing state aid, recent 2024 law changes that affect local option budgets, and the limits of state reporting on outcomes for students with Individualized Education Programs (IEPs).

Nick Myers, of the Office of the Revisor, summarized how statute defines the statewide excess-cost calculation and the state’s funding goal. He explained that statute sets out steps to compute statewide excess cost — overall special-education expenditures minus the share attributed to regular education funding and minus other dedicated sources such as federal dollars or Medicaid reimbursements — and that “the total amount of special education state aid that shall be appropriated to school districts, is 92% of the excess cost determination,” as the statute frames the goal. Myers noted the statute also makes the 92% figure “subject to appropriation” by the Legislature and provides for prorating if the appropriation falls short of the statutory target.

How the state distributes the money

Task force members reviewed the sequence used to distribute whatever special-education state aid the Legislature appropriates. The top-line appropriation is first reduced by several categorical reimbursements, including: - catastrophic aid (reimbursement for extremely high-cost students), which statute calculates as a 75% reimbursement of costs that exceed twice the special-teacher reimbursement threshold; - a separate Medicaid-replacement payment currently capped at $9,000,000 and distributed by district based on the number of students who received Medicaid-eligible services; and - transportation and maintenance reimbursements, which the presenters said are reimbursed at a high share of actual cost (about 80% for transportation in the examples given).

Whatever remains after those categorical subtractions flows to the so-called special-teacher reimbursement, a per-FTE distribution based on each district’s count of special-education teachers and…