SPRINGFIELD, Vt. — Superintendent Zach McLaughlin warned the Springfield Schoolboard this week to anticipate complications for the 2020-21 budget work, due to ongoing disputes over the state’s new funding rules for special education.
At Monday’s schoolboard meeting, McLaughlin and Director of Special Education Kelly Ryan briefed the board about two new changes by the Vermont Agency of Education that will reduce the amount of state reimbursement that school districts receive for services to students with special needs.
One was the state’s announcement in June that, for special education students attending out-of-district schools, the state will only reimburse districts for the tuition cost that covers special education services, such as therapeutic services, but not the “regular education” costs like general class instruction.
In other words, if a district sent a student to a private special education school such as the Kimball Farm School in Newfane, the state’s new rule will not reimburse the district for the tuition cost to provide English or math instruction. The district will have to cover that amount — approximately $15,000, which reflects the average per pupil cost in Vermont for regular education — from its local spending.
The state originally intended this new funding rule to take effect this school year, but pushback from local school districts convinced the state to postpone the implementation date to July 2020.
The other change, Act 173, is more complicated, McLaughlin said.
According to McLaughlin, the state’s plan under Act 173 (approved by legislators in March 2018) would phase out the state’s current reimbursement formula over the next three-to-five years and replace it with the equivalent of a block grant. The amount of the block grant would be significantly less than what Springfield currently receives.
At the time of Act 173’s approval, the legislature said that while the new formula would reduce revenues to districts, the new laws would give districts more flexibility with how to operate their special education programs, by reducing costs and resources spent on bureaucratic paperwork.
Later, however, the state reported that federal law would prevent the districts from having the flexibility with these funds, which essentially meant that the districts were just going to lose revenues.
Kelly told the board that he projects a worst-case revenue loss of up to $1.5 million in Springfield, which would be phased out over the next three years, if the new rules go into effect next school year.
But McLaughlin said that Act 173 is now in the middle of a legal dispute between the state and a coalition of superintendents, principals and educators, whose law firm argues that Vermont has too narrow a definition of federal special education law.
“We’re now in this interesting dispute that needs to be resolved, so there’s some delay by the state to enact the new regulations,” McLaughlin said.
McLaughlin said that by December, when the district and board delve into their budget work for the 2020-21 school year, the district will need to predict what budget situation to prepare for: the hopeful event that the Act 173 changes get pushed back another year, or the worst-case scenario in which the district budgets for less revenue from the state and covers the difference with local spending.
“My frustration is that as these changes are coming down, there’s no guidance coming from the Agency of Education to help us prepare,” Kelly said.
Kelly told the board that he plans to discuss different ways to provide services with the special education teams in order to stay ahead of the changes.
“So we can be proactive instead of reactive,” Kelly said.