Finance committee urges board to waive FY26 true‑up for special‑education add‑on for expanding charters

The Utah State Board of Education Financial Operations Committee voted Nov. 7 to recommend the board waive paragraph 3 of administrative rule R277‑479 for fiscal year 2026 for expanding charter schools that would otherwise see reduced special‑education add‑on allocations when the rule's true‑up is applied.

The committee acted after hearing from charter‑school finance officials who warned large reductions could force staffing losses and interrupt services. John McQueary, business manager for Syracuse Arts Academy, said a proposed 42% reduction would be "catastrophic," estimating "approximately $1,237,000 in lost or reduced funding" and urging a phased correction over multiple years. Sam Gibbs, executive director at Salt Lake Academy, told the committee the change would "virtually make it impossible for us to provide FAPE" (free appropriate public education) if applied immediately.

Why the reductions appeared: staff explained the special‑education add‑on uses different data points and timing than the K‑12 WPU formula. New and expanding charter schools lack two years of average daily membership (ADM) data, so prior years' supplemental WPUs and separate expansion supplements were folded into later allocations; repeated expansions produced a higher base that the rule's December true‑up then corrected, resulting in sudden midyear reductions. Dale Frost, USBE minimum school program administrator, demonstrated that sequential supplements and growth calculations can compound and drive allocations well above a one‑WPU‑per‑SPED‑student intent.

Committee action and next steps: Vice Chair Cole Kelly moved the recommendation to waive paragraph 3 for FY26. The committee voted to recommend the waiver unanimously (Chair Jaime absent). The committee also directed staff to return at the next meeting with recommended corrective options and phase‑in models to reduce harm to students and allow LEAs time to adjust budgets and staffing. Committee members and staff discussed measures including multi‑year phase‑ins, temporary freezes on additional increases, and targeted hold‑harmless provisions for schools most affected.

What staff will bring back: staff agreed to prepare models showing phased adjustments, potential fiscal impacts across LEAs, and the legal implications of waiving the rule. They flagged timing constraints: the December counts and the agency's normal midyear updates are the next operational milestones for allocation updates. The committee instructed staff to provide corrective proposals at the next meeting so the board can consider whether to adopt a waiver and, separately, whether to pursue longer‑term rule or statutory changes.

Public comment and context: several charter representatives had asked the committee either to delay implementation or to phase corrections over multiple years. Staff emphasized the policy intent of the add‑on is to fund students’ services, but also acknowledged the current procedures had produced uneven year‑to‑year outcomes for some expanding charters.

The committee’s recommendation to waive R277‑479 paragraph 3 is advisory to the full state board; any formal change will require board action and, depending on the chosen fix, could require additional rulemaking or legislative engagement.