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AOE urges restoring reinvestment language as school‑based Medicaid shifts to AHS
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Summary
Agency of Education staff told the committee that a transfer of school‑based Medicaid administration to the Agency of Human Services leaves some rulemaking authority at AOE; staff requested restoring statutory language so districts must reinvest Medicaid revenue into prevention and intervention programs and to enable rulemaking and data collection.
Agency of Education staff testified that a provision removed from a transfer bill should be restored or clarified to preserve AOE rulemaking authority over how school‑based Medicaid reinvestment funds are used.
For the record, staff noted the transfer moves administration of the school‑based Medicaid program from the Agency of Education to the Agency of Human Services, but AOE would retain a limited role in rulemaking tied to reinvestment and quality standards. Katie Grant (speaker 3) said current statute requires districts to reinvest revenue from the school‑based Medicaid program into prevention and intervention programs — examples include school nurses, mental‑health supports, attendance programs and connected social‑work services — and that removing the statutory language would break the state’s fiscal processes and weaken accountability for student outcomes.
AOE requested that the committee consider restoring the language so the agency can adopt rules to guide districts, collect better outcome data, and reduce duplicative payments. Staff emphasized that without statutory specification, districts could treat funds as general revenue — potentially lowering property tax rates rather than funding student supports — and that clearer statutory guardrails would support budgeting and public communication.
On fiscal scale, staff provided rough figures for context: about $50,000,000 of currently 'unset' funds exist in the program, the broader program has historically been around $30,000,000 in federal funding and approximately $15,000,000 is immediately under discussion for spending in the near term. AOE asked the committee to review the exact language and to coordinate with appropriation staff about any budgetary implications; staff said they would submit written language and additional background documentation for the committee’s consideration.
The committee requested the written text and directed staff to return with proposed language and fiscal analysis before finalizing the appropriation or conference committee decisions.
