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Staff member: rising costs leave districts exposed under "circuit breaker" special-education funding
Summary
A staff member explained how rising per-student special education costs have outpaced stable state "circuit breaker" reimbursements, outlined FY26 threshold and reimbursement mechanics, and described a legislative push to lower the threshold and increase the reimbursement rate.
A staff member briefed attendees on the state'level "circuit breaker" program that reimburses school districts for unusually high special education costs, saying the program is intended to prevent a single costly placement from overwhelming a district's budget.
"The goal is to help districts cover the cost of, you know, high cost special education placements," the staff member said, and described the circuit breaker as analogous to a household circuit breaker that trips before a system is overwhelmed.
The staff member gave concrete FY26 figures: the claim threshold is $53,431. Using a worked example, they said that for an outside placement costing $150,000, the district would cover the threshold amount (about $53,430), leaving roughly $96,005.69 subject to state reimbursement. With the reimbursement rate at 75% in recent years, that would yield about $72,000 in state reimbursement for that student.
A questioner asked whether the reimbursement percentage has changed over time. The staff member replied that the reimbursement rate has been 75% for several years and said part of the statewide legislative agenda is to seek an increase to 90% (with 100% described as unlikely). The staff member also said the district lobbies an entity referred to in the transcript as "HEPA"; the transcript does not define that acronym.
The briefing highlighted that statewide eligible special education costs have increased about 59% over the last five years, while the number of students receiving services has remained largely stable. "In other words, it's the costs aren't being driven by more students. It's just being driven by higher costs," the staff member said, using this point to explain why rising per-student costs, not enrollment changes, are the main driver of the funding gap.
The staff member also noted transportation costs are a significant expense. They said transportation reimbursement is lower (about 61% this year) but that including transportation in reimbursements is a recent change that has eased some district burdens compared with when transportation was not reimbursed.
On policy responses, the staff member summarized the proposed legislative approach: create a study commission to examine special-education costs, lower the claim threshold (the staff member suggested lowering it by roughly $10,000 as an example), and raise the reimbursement rate from 75% toward 90%. The staff member framed those changes as tweaks to an existing statewide approach rather than a wholly new program.
The briefing concluded with a reiteration that the information was being shared to inform ongoing discussions and legislative lobbying around special education funding.
