Dept. of Ed. warns South Carolina to restore funds cut from special ed budget or lose same amount of federal money

EdWeek‘s special education blog reports that South Carolina may lose about $111 million in federal special education money for cutting its spending on students with disabilities for the last two years without the U.S. Department of Education (ED)’s approval.

U.S. Assistant Secretary for the Office of Special Education and Rehabilitative Services Alexa Posny  stated in a letter to State Superintendent Mitchell Zais that that if South Carolina doesn’t come up with the $111 million that it cut from special education budgets for the last two years, the federal government will penalize the state by the same amount.

The EdWeek post explained that the Individuals with Disabilities Education Act (IDEA) requires states to keep special education spending the same from year to year, or increase it, regardless of the condition of their state budgets. This rule is referred to as “maintenance of effort.” States must seek permission from ED to cut their special education budgets to avoid being penalized by the same amount in federal special education dollars.

In the current recession, such requests have become much more common than in the past.  South Carolina is the only state, however, to request the ability to cut spending on students with disabilities for three years in a row. For the 2008-09 school year, the department granted the state’s request to cut special education spending by about $20 million, or about 5 percent. For 2009-10, the state got a partial reprieve and was allowed to cut the budget by about $31 million, or 7.6 percent, although the state wanted to cut another $36 million and was turned down.

The state’s request to cut another $75 million from its special education budget of about $334 million for the 2010-11 school years was denied altogether. Posny reasoned in her letter to Zais that the 2.5 percent cut in the special education budget was a greater percentage than the cut to the total state budget—which was less than 1 percent.

South Carolina will have to show that it restored the $111 million ($36 million from 2009-10 and the $75 million from 2010-11) —or face a matching cut from the Education Department, Ms. Posny said. On top of that, she said the federal government will be closely monitoring whether students with disabilities in South Carolina are still being served well and receiving free, appropriate public education as required by federal law.

A committee in South Carolina’s General Assembly has approved a proposal that would boost special education spending by $75 million, said Jay W. Ragley, deputy superintendent for legislative and public affairs. Although the school year is over, the money would be transferred to districts by June 30, 2011, in time to count for the 2010-11 school year.

The state plans to fight ED’s disapproval of the remaining $36 million cut, he said.  It’s too late to restore money to a school year long over. “Frankly, we think the department is braving new legal ground. We look forward to braving that new legal ground with them,” he said.

Source:  EdWeek, 6/22/11, By Nirvi Shah

[Editor's note:  In June 2010, EdWeek reported that ED had granted both Iowa and Kansas waivers from the special education maintenance of effort requirements.   The article noted that a built-in escape clause in IDEA allows such waivers in “exceptional or uncontrollable circumstances such as a natural disaster or a precipitous and unforeseen decline in the financial resources of a state.” (20 USC §1412(a)(18)(C)(i)). A summary of the article appears at the link below.]

NSBA Legal Clips archive on maintenance of effort waivers

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