Lawmakers press MSDE over autism-waiver enrollment freeze, budget transfers and special-education funding

DLS budget analyst Catherine Barber told the Education and Economic Development Subcommittee that the fiscal 2027 aid-to-education allowance increases by $271 million (2.5%) to $11.1 billion but flagged several concerns that drew sharp questions from lawmakers.

Barber said the analysis shows significant transfers and closeout amendments moving funds intended for student services into MSDE’s headquarters budget, including nearly $4.0 million in a fiscal 2025 closeout amendment and additional realignments in fiscal 2026. “DLS is concerned that MSDE is diverting savings from some programs providing services to children … to expand administrative spending in the headquarters budget,” she said, and recommended reducing appropriations for several underutilized programs and deleting funds for a leadership foundation the analysis said is no longer operating.

Barber also described programmatic and fiscal pressures across the aid-to-education budget: lagging math proficiency on the Maryland Comprehensive Assessment Program (MCAP), demographic gaps in scores, a projected blueprint funding gap that DLS estimates at $1.7 billion in fiscal 2028 (growing to $3.4 billion by fiscal 2031), and a statutory change that contributed to a drop in compensatory-education enrollment.

The analyst’s remarks prompted sustained questioning about the autism waiver program. The DLS report says MSDE’s November 2025 report indicated no invitations to apply for services had been sent since November 2023 and that utilized slots decreased from 1,934 in fiscal 2025 to 1,784 in fiscal 2026 and are projected to decline further. Barber asked why MSDE did not report a fiscal shortfall to the comptroller and recommended a committee narrative requesting an update and a timeline to end the enrollment freeze.

State Superintendent Carrie Wright and other MSDE officials disputed the characterization in part and described steps to address cost growth and oversight. Wright said the department has worked with the governor’s office and the Department of Budget and Management (DBM) and that some programs originally placed in the aid-to-education budget are administratively driven and should be in the headquarters budget. On the autism waiver, MSDE described cost-containment measures including implementing level-of-care assessments linked to individual plans, requiring providers to clock in and out, and pursuing federal waiver amendments where needed. “What we’re doing is getting a level of care or needs assessment completed, and then the plan of care for that individual is linked to that needs assessment,” an MSDE staff member said.

Lawmakers pressed for additional data. Delegate Forbes and other members asked why the department did not notify the legislature about an apparent enrollment freeze and requested the current wait-list count; MSDE said it will provide those figures and other follow-up information. MSDE also said it has updated procurement delegations and requires superintendent sign-off for contract modifications above $100,000 as part of corrective-action measures.

Advocates and lawmakers at the hearing urged caution before reducing special-education funding. Barber and other analysts said the Kerwin Commission’s assumption that early interventions would reduce special-education enrollment has not materialized; MSDE and witnesses said an adequacy study is underway and urged waiting for its findings before changing per-pupil funding levels.

The subcommittee requested written follow-ups and additional documentation; MSDE said it has submitted a detailed written response and offered to provide the requested data and timeline.