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Legislators debate fixing special-education funding gap after Grand Forks and Wapenton data
Summary
School officials and legislators discussed options to address a widening local funding gap for special education: raising the special-education weighting factor, lowering the 'high-cost' reimbursement threshold (currently 4× state average), or replacing parts of the formula with a cost-based reimbursement system; DPI provided preliminary fiscal context and statutory references.
Grand Forks Public Schools business manager Brandon Bombach told the committee that rising IEP counts and more intensive services have driven district special-education expenditures far faster than state funding increases. Using Grand Forks data, Bombach said students on IEPs rose by roughly 44% between 2015 and 2026 while state formula support grew by roughly 6% over the same period, producing a district funding shortfall that has been absorbed locally.
Bombach explained how the state aid formula applies the special-education weighting factor (currently 0.088) to total average-daily-membership rather than to the number of special-education students, which can mute responsiveness to growing special-education populations. He proposed a move toward a cost-based reimbursement model or, as interim steps, raising the weighting factor or altering how the weighting calculation is applied.
Representative Carla Hansen (District 44) presented Wapenton Public Schools’ proposals: reduce the statutory "excess cost" threshold (currently four times the state average special-education cost) to a lower multiplier (for example 3×) so more district students qualify for excess-cost reimbursement; or increase the statewide special-education weighting factor (her example: 0.088→0.174). She urged DPI to model fiscal impacts before the committee considers legislative changes.
Adam Tesher, DPI school finance officer, told the committee that the 4× multiplier and the requirement to identify the top 1% of costly students are statutory (NDCC 15.1-32-18). DPI’s rough runs show that in school year 2024–25 DPI reimbursed about 146 student contracts under the 4× rule and that moving the multiplier would create a measurable biennial fiscal note, though the exact cost depends on how many students fall between current and proposed thresholds. Tesher also described how Medicaid reimbursement is deducted from the excess-cost calculation to avoid duplicative payments and noted timing issues in student-contract submissions that affect fiscal estimates.
Committee members voiced concerns about administrative burden and equity. Some members warned an actual-cost reimbursement model could introduce substantial variability, require heavier DPI review and audits, and create perverse incentives unless thresholds and local shares are carefully designed. Several members suggested hybrid approaches (tiered responsibility with a local contribution up to a defined multiplier, then state reimbursement) and asked DPI to model scenarios (3×, 3.5×, increased weighting factor) and provide dollar estimates for the next meeting.
No changes were enacted; the committee requested DPI and legislative staff to prepare fiscal analyses and additional data for follow-up deliberations.
