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North Santiam SD 29J directors hear sharp rise in special‑education costs as state funding cap draws scrutiny
Summary
The district reported a jump in special‑education enrollment and projected state/local expenditures rising to about $4.1 million this year, prompting board discussion of maintenance‑of‑effort requirements and a state legislative effort to lift the 11% funding cap.
Directors were told the district is seeing both a notable increase in students identified for special education and a corresponding rise in state/local expenditures that affect federal maintenance‑of‑effort obligations.
Director of Business and Fiscal Services (speaker 8) presented the district’s financial snapshot and explained MOE — the federal requirement that school districts keep state and local spending for special education at least at prior‑year levels before drawing down IDEA federal funds. He said the district’s MOE baseline (from the 2022–23 data) was just over $3.0 million and that current projections for state/local special‑education spending are about $4.1 million for 2024–25.
“Maintenance of effort ensures that federal funds are used to supplement, not to supplant local and state special education funds,” Allen said, explaining the district could face reduced federal funding if it cut local/state special‑education spending below the baseline. Allen attributed the projected increase to a rise of 46 special‑education students (from 341 to 387) plus higher contract costs from Willamette ESD and added staffing and transportation costs.
Board members asked whether the rise reflects better identification, transfers into the district or other trends. Allen and other staff said the increase is likely a mix: some better identification and service access, state eligibility changes that extended some birth‑to‑five services into school age, and residual COVID‑era effects. Assistant staff noted kindergarten referrals and identification rates have risen and projected the kindergarten cohort could push next year’s counts higher.
Superintendent Loving summarized the state‑level policy context and said advocates have introduced legislation to raise or remove the 11% cap on additional special‑education funding; he said full elimination of the cap would require a substantial infusion of funding statewide and cited a COSA briefing that estimated roughly $750 million in additional K–12 funding would be needed to fully remove the cap.
District staff emphasized the current budget remains balanced overall, but they framed the MOE changes and rising special‑education costs as a structural pressure that could force choices if the state funding formula is not adjusted. The board discussed the policy ask — whether the legislature will increase the overall 'pie' rather than reallocate funding from other programs — and asked staff to continue monitoring legislative developments and budget implications.
No formal vote was taken on funding changes during the meeting; staff said ongoing budget items (supplemental budget, transfers) that appeared on the agenda were considered separately.
