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Committee boosts special-education differentiated aid, restores fiscal-capacity component in HB 563
Summary
The House Education Committee amended HB 563 to raise several adequacy formula components — including a $1,040 per-pupil increase in special-education differentiated aid for FY27 — and to reinstate a form of fiscal-capacity disparity aid. The amendment passed and the bill was reported OTPA.
The House Education Committee amended HB 563 on a bipartisan vote, increasing several components of the state adequacy formula and reinstating a fiscal-capacity disparity aid for property-poor municipalities.
Representative Ladd, sponsor of the bill and lead speaker on the amendment, said the committee proposed a two-step approach. For FY 2026 the formula would remain largely unchanged with the statutory 2% increases. For FY 2027 the amendment increases the base cost to $4,351 per pupil, raises the free-and-reduced (F&R) meal per-pupil amount to $2,441, raises the English-language-learner differentiated component to $849, and increases the special-education differentiated aid from $2,100 to $3,140 per special-education ADM.
“It will jump from the 2,100 up to $3,140,” Representative Ladd said while explaining the amendment. He told the committee staff and members the special-education increase is based on caseload modeling and national recommended caseloads for different IEP categories.
The committee’s analysis, as described in the meeting, estimated that raising differentiated special-education aid to the proposed level adds roughly $28,000,000 in new money statewide compared with current allocations; the transcript records current special-education expenditures at roughly $68,700,000 and the committee estimate of total cost for the differentiated aid area rising to roughly $98,700,000 under the proposal.
Committee members also discussed reinstating a separate fiscal-capacity disparity grant: unlike the extraordinary-needs grant, which mixes low-income student counts and property valuation, the new fiscal-capacity disparity aid targets communities with low equalized valuation per pupil. Staff circulated a spreadsheet showing the distribution; a committee member summarized the total statewide allocation for that fiscal-capacity disparity line as about $13,300,000.
Representative Luno and others said the package is a step forward but not a complete fix. Representative Luno: “I think this moves things in the right direction… it recognizes the increased costs associated with special education.” Representative Fellows and other members pressed for more time to review town-by-town impacts and the spreadsheets the Legislative Budget Assistant prepared; committee staff agreed copies were available and the group paused to review them.
After discussion and member questions about caps (a $3,750 per-pupil cap for municipalities with ADMR of 5,000 or more was explained), the committee voted on amendment 0650H and then on the amended bill. The roll calls recorded the amendment and final motion as passing on unanimous recorded voice/roll-call votes.
Votes at a glance: amendment 0650H to HB 563 passed (18-0); motion OTPA (Ought to Pass as Amended) on HB 563 passed (18-0).
The committee chair and members repeatedly described the change as incremental and noted revenue constraints: Representative Ladd said the special-education boost and fiscal-capacity aid are “not the end all,” but represent a policy direction the committee wanted to send forward to division and to finance.
Looking ahead, sponsors said the bill and its spreadsheets will be examined in division and finance for implementation and that further adjustments to the formula should be expected in subsequent sessions.
