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Special Education Funding in Wisconsin

How it Works and Why it Matters

February 2019

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One of the foremost fiscal challenges for state government and school districts throughout Wisconsin is the cost of providing special education.

School leaders from across the state testified at last year’s Blue Ribbon Commission on School Funding hearings on the acute fiscal strain caused by special education costs. Meanwhile, during his gubernatorial campaign, Governor Tony Evers called for a $1.4 billion boost in state K-12 education aid in the 2019-21 budget. His proposal included a $600 million increase for special education—the largest increase over the current budget of any other education line item by far.

Calls for additional resources stem from a growing gap between available state and federal funding for mandated special education and rising special education costs (which are considerably higher per pupil than general education costs). To satisfy the mandate, school districts are diverting resources away from programs intended to meet the needs of all students.

Recent state funding trends illustrate the dimensions of this financial challenge. Between the 2007-08 and 2017-18 school years, special education costs eligible for state aid increased by 18.3% to about $1.4 billion. At the same time, the state’s primary funding source has remained flat at far below aidable costs (i.e., those eligible for state reimbursement)—$369 million—for a decade. As a result, state funding of special education has fallen from 28.9% in 2007-08 to an estimated 24.5% in 2018-19 (and is down from a peak of 70% in 1973).

In the 2015-16 academic year, to pay for special education costs, school districts used more than $1.0 billion in resources that otherwise would have served all students. For two-thirds of Wisconsin school districts (283), this equates to 10% or more of resources available under their state-imposed per pupil revenue limits. These diversions appear to be especially prevalent in school districts serving high poverty, high minority schools, which raises equity concerns.

This report does not cover all aspects of Wisconsin’s system for financing special education. Rather, it looks at how the conflict between special education mandates and available funding drives a key fiscal challenge for Wisconsin’s policymakers and local education providers. Continue reading…

Media Coverage

"Report: Special Ed Funding Gap Grows To $1B" [1]WPR
"Report Examines Consequences of Underfunding Special Education" [2]WUWM
"Wisconsin’s special ed system: High stress, sparse state funding" [3]Madison 365
"Schools receive less money for special education as costs rise and parents struggle" [4]Madison.com
"Green Bay Area Public Schools facing projected $36 million budget deficit" [5]NBC-26 Green Bay
"Editorial Roundup: Wisconsin" [6]USA News
"Gov. Tony Evers proposes $2 billion increase in Wisconsin public school funding" [7]Madison.com
"Jill Underly renews call for more funds, challenges GOP efforts to limit teaching racism" [8]Kenosha News
"Increased state funding for special education would help all" [9]The Cap Times
"New report calls for more special education funding, illuminates statewide disparities among school districts" [10]Wisconsin Public Radio
"Wisconsin's special ed fund only covers a third of what schools spend. See what it means for your district." [11]Milwaukee Journal Sentinel
"State superintendent: Joint Finance Committee needs 'to do their job' and boost funding for schools" [12]Wisconsin Public Radio
"State Superintendent Urges Legislators To ‘Do Their Job,’ Boost School Funding" [13]Urban Milwaukee
"Even with increase in state budget, school districts still foot millions in special education expenses" [14]Milwaukee Journal Sentinel
"School District of Rhinelander operational referendum on the April 1 ballot" [15]WXPR
"Understanding Wisconsin’s public school funding crisis: Inflation, Act 10, and referendums" [16]Racine County Eye
"Educators, parents from about 40 Wisconsin K-12 districts have urged lawmakers to increase special ed funding" [17]Milwaukee Journal Sentinel
"GOP legislators approve $220 million increase for special education, $1.3 billion in tax cuts" [18]Wisconsin Examiner