School Leaders: Increase Special Education Funding Rate

Door County school administrators echo the assertion by the governor and state superintendent that Wisconsin needs to better cover special-education costs.

Southern Door County Schools Interim Superintendent Tony Klaubauf, Sturgeon Bay Business Manager Jacob Holtz, Gibraltar Schools Superintendent Brett Stousland and Sevastopol superintendent Kyle Luedtke all say Wisconsin needs to increase funding for special education. 

“If the state would increase the funding for special education programs it would benefit each district in the state,” said Luedtke, whose district has 80 students with individual education plans (IEPs). “Every June the majority of school districts transfer funds from the general fund to the special education fund. Our transfer is projected to be $1.1 million.”

Luedtke said he does not know a district that does not transfer from the general fund to the special education fund annually.

Southern Door schools business manager Jason Melotte said making transfers from the general fund – which pays teacher salaries – to special education causes a hardship. 

“Special education is not funded in an equitable manner for schools,” Stousland said this month. “I am not aware of any proposals or resolutions at the state level that would bring relief at this time.”

State Rep. Joel Kitchens (R-Sturgeon Bay), chair of the Wisconsin Assembly on Education, said, “every school has this problem.”

He repeatedly tells educators, superintendents and education-lobbying groups that they should focus their school-funding arguments on increasing the special-education reimbursement rate. Kitchens said so far, he has advocated for those increases during the state budget process, and the reimbursement rate has increased from about 25% to approximately 33% over the past four state budgets.

He said if schools banded together to ask specifically for special-education-funding increases, they could succeed in persuading him to push for more funding to cover all of the special services called for in each plan for a student with an individualized education plan. He expressed uncertainty about crafting a bill that would pass and increase the rate to the 60% level, although the number of students with IEPs keeps growing, as does the cost of technical assistance and aides.

“Ultimately, I would like to see it at two-thirds,” Kitchens said. “That will cost hundreds of millions of dollars however. I don’t see that happening all at once.”

Districts have a legal obligation to educate all students. However, Melotte and Kitchens said schools have to transfer money out of their general fund as the districts’ special-education funds run out during each school year.

In 2023, the state reimbursed school districts for 31.4% of funds to cover special-education costs, according to the Wisconsin Department of Public Instruction. Yet even after an additional 2% increase from the budget passed this winter, Door County districts are relying on local property taxpayers to cover almost 60% of special-education costs.

That reimbursement rate can become more of a hardship for schools when they are legally responsible to educate a “high-cost” student who needs $30,000 to $100,000 worth of individualized instruction, though many students with IEPs only cost districts $1,000 or $2,000 more than peers, Kitchens said. 

“Special education needs to be reimbursed at a higher rate, and I keep encouraging the school lobbying groups to ask for that,” Kitchens said. 

“It’s hard to explain to people that when we don’t reimburse special-ed at the proper rate, it’s really the regular-education – the general fund – that gets hurt. It’s not the special-ed kids that get hurt.”

Wisconsin’s reimbursement rate stood at about 65% in 1980-81, according to the Wisconsin Department of Public Instruction.

In 2019, a bipartisan Blue Ribbon Commission on School Funding recommended additional funding for special education in general and increasing the reimbursement rate up to 60%, according to DPI. But no legislation passed to meet that call.

In late December 2023, Gov. Tony Evers announced the highest state surplus and “rainy day” fund balance in Wisconsin history – $7.07 billion. State Superintendent of Public Education Jill Underly quickly asked that some of that go to special-education funding.

“This budget news is a strong reminder that Wisconsin has tremendous resources readily available to help children and families,” Underly announced on Jan. 16. “We must set partisanship aside and invest in our public schools and the future of our kids. I am calling today for the state to increase its contribution to local districts and raise the special education reimbursement rate to 60%.”

Kitchens agrees with the need to increase the reimbursement rate, but not the use of a one-time budget surplus. He said the surplus came from low spending and extra funding during the COVID-19 pandemic.  

“We don’t want to spend that on something that has an ongoing cost to it,” Kitchens said.