In the 2014-2015 school year, Hutchinson Public Schools spent $1.4 million of local tax dollars on special education. In the 2017-2018 school year, it spent $2.5 million on special education to reach a little more than $6 million in total spending after the state and federal share.
“There was a significant change to the (state) special education funding formula during this time,” said Lisa Kraft, director of special services at Hutchinson Public Schools. “Districts across the whole state are experiencing this.”
At a recent special meeting last week, the School Board sat down with Holt Consulting Group to discuss its special education program, the reason for the shift in expenditures, and what it might do to get ahead of the issue. At its core, the problem goes back to the 1970s when the federal government mandated students in need of special education services be able to receive them in their home school district.
The mandate came with a pledge to provide substantial aid with funding.
“For years and years the (federal government) promised to pay these expenses and they never have from day one,” said superintendent Daron VanderHeiden. “The bottom line is the state pays more than the federal government. Way more.”
Legislation passed in 2014, effective starting in 2016, changed the way the state calculates its contributions. During last week’s meeting, consultant George Holt told board members he could think of one tiny school district that benefited from the changes, but most, such as Hutchinson, were left with larger expenses.
The district was aware of the changing formula, but as with other districts it didn’t know how it would all play out ahead of time.
“The state’s claim was that it wouldn’t negatively impact schools,” VanderHeiden said. “That’s just not true. Not for us, anyway.”
The formula comes with a base amount Hutchinson Public Schools can receive formed on previous spending. VanderHeiden said if the school tries to make big changes to the program to reduce costs, the state will change the base, therefor further reducing state funding the school receives.
“If we continue on this trajectory, we would expect to spend more (on special education),” VanderHeiden said. “That’s one reason we wanted this audit.”
The biggest winner in the formula change, he said, is the state, which caps its liability. Hutchinson Public Schools is among a growing number of schools in the state that has reached its funding cap, Holt told board members last week.
On the other side of the issue is the amount of service provided by Hutchinson Public Schools and districts across the state. More Minnesota students qualify for special education services than before, Holt said. A growing number of students have complex medical, mental health or behavioral needs, which comes with a higher cost to the district to provide assistance.
In 2009, the district served 360 students with disabilities. The number grew by 66 to 426 in 2019.
According to Holt Consulting’s report, the district saw a significant increase in the number of students with autism spectrum disorder and moderate increases in the number of students with other health disabilities, emotional behavior disorder and specific learning disabilities.
“We need to be clear we are not debating the fact that these kids need these services,” VanderHeiden said. “What is being debated is who should cover (the expense). Every dollar spent (by the district) is a dollar that can’t be spent on other programs.”
“It’s the school’s responsibility. These students have needs,” Kraft said. “But there are only so many dollars.”
Holt Consulting identified two expenses in particular at Hutchinson Public Schools as sources of high expenses.
One of those expenses, the cost to pay and provide benefits to staff, is common among schools and businesses. Holt encouraged the district to continue finding ways to provide more efficient service with support staff and a strong base of support among stakeholders. He said the school was already on the right track as it increased the number of students per staff person.
Board Member JoEllen Kimball asked if that efficiency may also be a concern, as the district was giving heavier case loads to staff.
“I don’t think you’re going to be loading down your teachers,” Holt said. “You have systems and support in place for those teachers.”
The other expense, transportation, had ballooned by 178.36 percent from 2013 ($355,490) to 2018 ($933.880). Why?
“The cost went up because of the number of special education kids needing transportation,” Holt said.
In addition to local transportation costs, there are a higher number of students who open-enrolled from other districts who need transportation.
“The school has to go get them,” Holt said.
The school is also responsible for students in need of transportation to specialized services out of the area.
The School District has started studying its transportation system to seek ways to provide its services more efficiently, but a larger change may be on the table.
“We may potentially work through a joint powers agreement with other local school districts,” VanderHeiden said, “to help with services that are too expensive to offer.”
In addition to sharing the burden of expenses, what makes a joint powers agreement especially appealing is the way it may help schools make better use of state funding. VanderHeiden said expenses of a joint powers entity do not count against the cap on the individual school districts.
“Another area is to look at our medical assistance revenue and try to maximize it,” Kraft said.
She said her office plans to look over how the school gathers information and files it for medical assistance revenue that can be used to aid students with individualized plans.
Current proposed legislation to increase the state’s contribution to schools based on the number of students would help as well, if passed, VanderHeiden said, as would $77 million in Gov. Tim Walz’s proposed education budget meant to help offset special education costs among schools.
Not all bad news
Though much of what Holt presented to the School Board was about data and analytics, he took time to talk about the staff as well, and called special attention to their dedication.
He said it isn’t unusual to hear people say they love their work, but the tone and passion with which Hutchinson educators said so was of note.
“We have very dedicated staff,” Kraft said. “We have staff that have been with us a lot of years. I feel fortunate.”
The school’s graduation rate for 2017 was 92 percent, 10 points higher than the state average. Its graduation rate for students enrolled in special education was 68.42 percent, but an additional 26.32 percent continued education past the four-year mark. That compares favorably to state averages of 61.18 percent and 23.71 percent.
Holt said he was impressed by the staff’s focus on helping students enrolled in special education services build independence. He also highlighted the district’s high graduation rate for special education students, and its transition assistance program, which helps students adjust from life as students to the next stage of life.
Kraft said districts from around the region are regularly seeking to send their students to Hutchinson Public Schools’ transition program.
“We are really trying to help students determine where their strengths are, and their work skills,” she said, “and point them in the direction that makes sense for them.”