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Minneapolis leaders and teachers back bill to reduce charter special-education billbacks; fiscal cost to state estimated in tens of millions
Summary
House File 1099 would reduce charter-school special-education billbacks to resident districts from 80% to 50%, shifting the remainder to the state; Minneapolis officials said the current system is creating a multimillion-dollar cross-subsidy and urged state action. The committee laid the bill over.
Lawmakers heard detailed testimony on House File 1099 on March 12, a proposal to reduce the share of special-education costs that charter schools bill back to students’ resident districts.
The bill would lower the resident-district billback for charter-school special-education costs from 80% to 50% of the unreimbursed portion, moving the rest to state funding, according to author remarks and fiscal documents presented to the committee.
"Nearly 40% of that cross subsidy is due to special-education tuition bills we received from charter schools," said the Minneapolis superintendent testifying in support, describing a cross-subsidy that supervisors say drains district general funds. Minneapolis told the committee its net tuition billbacks top $30–37 million in recent estimates.
Dr. Liz Keim, Minneapolis Public Schools’ associate superintendent for special education, illustrated how costs fall out: for a $10,000 speech-pathology service, she said, the state covers roughly $7,000, Minneapolis pays roughly $2,700, and the charter covers $300 — leaving the resident district with a sizable net expense. She added that the district’s cross‑subsidy was measured in the tens of millions.
The House fiscal analyst told members the bill as drafted would cost roughly $41.6 million in fiscal year 2027 and about $75.5 million in fiscal years 2028–29 combined, noting additional one-time IT and implementation costs. Fiscal staff also produced a district-by-district printout showing the distribution of current special-education aid and the net tuition-billback amounts.
Charter-school leaders, represented by the Minnesota Association of Charter Schools, said they support stable funding for students with disabilities and expressed concern that shifting costs specifically for charter students to the state could create a vulnerable line item in future budget stress. Classroom teachers and parents from Minneapolis urged passage to stabilize staffing and services in traditional districts.
Committee members and witnesses discussed the longer-term structural issue — the federal government’s longstanding underfunding of special education — and the Blue Ribbon Commission on Special Education that will return recommendations. After testimony and questioning, the committee laid House File 1099 over for further consideration.
The bill was laid over for possible inclusion; the transcript records no roll-call vote tallies.
