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Consultants urge smoothing ESA and rethinking special‑education funding to reduce cliffs and better match need

EDUCATION COMMITTEE - SENATE · November 9, 2020
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Summary

Consultants told the Senate Education Committee that ESA tiers create funding 'cliffs' and recommended smoothing and reweighting ESA, collapsing ESA categoricals, and exploring a move from census‑based special‑education funding to a multi‑weighted, student‑level model.

Consultants asked the Senate Education Committee to consider structural changes to targeted funding that they said would reduce instability and better align dollars to student need.

On ESA (the state mechanism that provides per‑pupil resources for economically disadvantaged students), presenters warned that tier thresholds create abrupt funding cliffs that can double district ESA dollars with a small percentage change in counts. To address that risk, they proposed smoothing the tiers, retargeting resources so all economically disadvantaged students receive more consistent support, collapsing overlapping ESA categoricals into a single pot, and tying the ESA amount to the base foundation as a permanent weight so ESA funding grows proportionally when the overall foundation is adjusted.

The presenters also urged exploring a move away from a census‑based special‑education allocation within the matrix toward a model that funds special education based on actual students served and service intensity. Using ADE 2018–19 data, presenters said district shares of special‑education students ranged from about 5 percent to over 30 percent and cited per‑student special‑education expenditures that varied roughly from $1,300 to $15,000; presenters argued that range indicates significant differences in service levels that a census approach may not capture.

Committee members asked whether the presenters recommended tighter restrictions on ESA uses. Presenters said they did not endorse immediate strict guardrails because districts often rely on ESA dollars to cover multiple needs, but they indicated that shifting some services (for example student mental health and school safety) into explicit matrix or dedicated funding could reduce ESA redirection. Members also sought clarification about federal maintenance‑of‑effort requirements for special education and the potential for perverse incentives; presenters agreed safeguards would be needed in any move to student‑level funding.

The committee did not take action on these ideas; presenters will return with a full report that the committee will review before deciding next steps.