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Senate subcommittee: private special education and provider rates are driving CSA spending
Summary
An Office of Children's Services briefing showed private special education accounts for the largest share of Children's Services Act spending; staff and senators flagged proposed rate caps and match changes that would shift costs to localities if providers and local budgets do not change.
Scott Reiner, executive director of the Office of Children's Services, told the Senate Health and Human Resources subcommittee that the Children's Services Act (CSA) has rebounded from a pandemic-era dip and now serves roughly 16,000 unique children, with combined state and local expenditures just over $600 million.
Reiner said cost growth is driven by both a rising census and higher per-child service costs. "Private day special education is the most costly service per child," he said, estimating it "averages just over $60,000 per child." He listed residential treatment at about $45,000 per child and foster care roughly $20,000 per child, with community-based services and additional special-education wraparound funds under $10,000 per child.
Reiner emphasized the program's local governance and funding structure: many service decisions are made by local teams or school divisions and each locality must provide a local match that averages about 35 percent (local shares in some localities run roughly 17 percent to about 53 percent).
The introduced budget includes two CSA-related containment strategies Reiner highlighted. First, a cap on the growth the state will reimburse for private day special education: this year the appropriation act limited growth to 5 percent above FY25 rates; the introduced budget proposes a 2.5 percent cap going forward, with estimated savings of roughly $3.5 million across the two fiscal years. Second, the budget would change the three-tier local-match structure for community-based services, shifting the average state share from about 83 percent to about 71 percent and increasing the average local share to about 29 percent; Reiner said that change would save approximately $11 million in the first year and $12 million in the second year if local spending patterns remain constant.
Senators asked whether residential treatment is the dominant cost driver; Reiner said private day special education has produced the sharpest growth in recent years. Reiner pointed subcommittee members to Department of Education utilization reports and offered to provide links and locality-level placement rates.
What happens next: Reiner concluded by offering follow-up data and the subcommittee moved to the broader HHR budget briefing. The CSA proposals noted by Reiner remain subject to subcommittee review and potential amendment during the budget process.
