Individuals with Disabilities Education Act (IDEA)

The Federal Education Budget Project (FEBP), Ed Money Watch’s parent initiative, maintains the most comprehensive education database available on funding, demographics, and outcomes for every state, school district, and institution of higher education in the country. This week, we’re announcing an update to the database: FEBP’s federal special education funding at the school district level is now up to-date for years 2010 and 2011.

Special education funding comprises the second-largest federal K-12 program, behind Title I grants to economically disadvantaged students. In fiscal year 2012, Congress allocated $11.6 billion to special education grants to states under the Individuals with Disabilities Education Act (IDEA), Part B.  The funding is divided across the states according to a complicated formula that factors in fiscal year 1999 levels of funding, the share of children ages 3 through 21, and the share of those children living in poverty. (To learn about some of the complicating factors of IDEA, check out our background page on the subject.)

States then divide the money across school districts through a number of different formulas. That’s why FEBP collects its district-level IDEA data directly from the states. The data are displayed at edbudgetproject.org, where you can plug in your own district and compare it to others of similar funding levels and locale types, within or across states, alongside other related data points like student poverty rates and per-student spending levels.

For example, we looked at one large urban district – Clark County School District in Nevada, which encompasses Las Vegas. Funding for the district increased slightly for IDEA Part B each year from 2009 through 2011 – up from $37.3 million in 2009 to $39.5 million two years later.

Meanwhile, though, special education enrollment held relatively steady – fluctuating by a tenth of a percentage point over the same period from a low of 10.3 percent to its peak of 10.5 percent. And student poverty rose quickly from 15.6 percent to 21.7 percent. Although it’s hard to make comparisons across state lines without significant caveats, the data still provide valuable micro-level analyses. 

The latest update also includes IDEA Sec. 619 preschool grantsfor 2010 and 2011, as well as the number of children served by those early intervention programs, for those states which are able to provide the data at a school district level.

Head to edbudgetproject.org to look up your school district, compare it to other districts, and perform your own analysis. The full data file is also available for download here.  And for more background on special education grants and other federal education programs, check out FEBP’s background and analysis pages here.

A legislative provision, buried eight hundred pages into the continuing resolution passed by the House and Senate last week and signed into law by President Obama, could hold significance for states that have reduced their spending on special education in recent years.

Under the Individuals with Disabilities Education Act, the federal law that governs special education policy, states are required to meet maintenance of effort every year to continue receiving federal education spending. Maintenance of effort (MOE) forces states to provide levels of funding for special education that are at least equal to the prior year’s state spending levels. Unless they are granted waivers from the U.S. Department of Education, states that fail to comply see their federal special education allocations drop by the amount that they failed to provide at the state level – permanently.

But the new language in the continuing resolution says states that fail to meet maintenance of effort will no longer be held permanently liable for that drop in state spending. Instead, the Department of Education will only be able to cut a state’s federal allocation for one year. In the following year, and in every year thereafter, the state’s federal allocation will revert to the higher amount.

Additionally, in the year in which the Department of Education cuts a state’s federal IDEA allocation, the amount of federal funding that the state loses will be redistributed across all other states.  The funding will follow the same formula as regular IDEA spending, with 85 percent distributed according to the population of children ages 3-21 in the state and the remaining 15 percent according to the poverty rate of children ages 3-21. States will pass on the additional funds to school districts under the same statute as regular IDEA funds.  Any state that fails to meet maintenance of effort is not eligible to receive a portion of the extra funds.

The policy change is hardly hypothetical, as this post from Education Week’s Politics K-12 blog explains. South Carolina, whose congressional delegation was instrumental in pushing for the measure, currently stands to benefit the most. In each of fiscal years 2009, 2010, and 2011, South Carolina cut its special education budget. The 2010 cuts were a bridge too far. The Department of Education refused to grant the state a full waiver for its excessive cuts that year and vowed to cut the state’s IDEA allocation by $36 million, effective October 2012.

Kansas faced similar challenges from the Department of Education last year, and ultimately lost $2 million in federal special education funding. In both cases, the reduction in federal IDEA funding would permanently lower the state’s IDEA allocation, were it not for the new provision contained in last week’s continuing resolution.

In effect, the new IDEA provision is a win-win for states. Gone are the very serious punishments for states that do not preserve their special education spending levels every year. And if a state does fail to meet maintenance of effort, every other state benefits by sharing in the spoils of its rescinded funding. States have seen unprecedented challenges in filling budget shortfalls throughout the recession, and the new provision gives flexibility to states that have made significant sacrifices to other areas to preserve special education funding. Still, maintenance of effort has been a cornerstone of federal special education policy for years, requiring states to live up to their promises to kids with special needs and protecting those children from budget cuts. The new policy revokes that protection and instead gives states a pass when they fall on difficult budget times.

During the media frenzy that followed President Obama’s unprecedented call for expanding pre-K to all four-year-olds in the United States, we estimated that the additional cost to states and the federal government, combined, to be somewhere between $10-15 billion per year. We estimate that the feds and the states currently spend about $9 billion on pre-K for four-year-olds.

We wanted to explain exactly how we came to that conclusion.

The early education world is about to suffer some serious whiplash. Last week was a time of excitement and hope, as President Obama announced his proposal for expanding preschool. This week the mood is the opposite, as federal spending cuts look increasingly likely, spelling potential hardship for a wide swath of programs, including Head Start, special education services and Title I school funding.

Yesterday the Early Education Initiative issued a new report by Maggie Severns, “Reforming Head Start.” In addition to this issue brief on Head Start “recompetition,” readers can also access our new Head Start background and analysis page, which was released in September as part of our pre-K expansion of the Federal Education Budget Project.

In 2009, President Obama and a Democratic Congress passed the American Recovery and Reinvestment Act (ARRA), an economic stimulus package that included large, one-time cash infusions for some of the federal government’s largest education programs.  But since then, Congress and the president reset funding for key PreK-12 programs back to their prior funding levels and haven’t increased it since. Meanwhile, they’ve ensured that the Pell Grant program for undergraduate students from low-income families maintained the one-time funding gains and then some. Will a second-term Obama administration continue this Pell-at-the-expense-of-everything-else policy?  First, let’s review how policymakers got here.

Under the stimulus bill, Title I funding for disadvantaged PreK-12 students grew by $10 billion.  Special education state grants under Part B of the Individuals with Disabilities Education Act (IDEA) nearly doubled, with an extra $11.3 billion, in addition to the program’s regular 2009 appropriation of $11.5 billion. And the Pell Grant program for low-income college students got a $15.6 billion add-on to its 2009 appropriation of $17.3 billion.

Since then, lawmakers have boosted the U.S. Department of Education’s budget overall by a healthy sum (especially when compared with other agencies), up from $59.2 billion in fiscal year 2008 to $68.1 billion in 2012. Amidst that healthy increase, however, lawmakers kept Title I funding and IDEA funding essentially flat.

What explains the overall funding increase? A big part of it went to Pell Grants. But there is more to the explanation. After the stimulus money had run out for other education programs, lawmakers approved four additional years of emergency supplemental funding for Pell Grants, which coincided with a separate increase to an entitlement funding stream for the program that started in 2008. The result may be the largest funding increase for any federal education program in history—while other programs remained flat.

Here’s the kicker: That emergency supplemental funding lawmakers approved for Pell Grants will run out this year. So the program needs another infusion of funding of about $5.8 billion, according to the Congressional Budget Office, just to keep it going in its current form. The following year that figure jumps to $8.7 billion. Over the next 10 years, the total gap is $76.5 billion.

Over the coming weeks and months, it’s time for lawmakers to starting thinking about smart ways to reform the Pell Grant program and put it on a sustainable funding path—but also to ensure that the program serves low-income college students well. PreK-12 programs have a lot riding on that outcome.

By Jennifer Cohen Kabaker

This post originally appeared on Ed Money Watch.

Several months ago, the Romney campaign released a document titled “A Chance for Every Child” that outlined the candidate’s education platform. Buried in the document is a proposal to “voucherize” the two largest federal programs for K-12 education: Title I and Individuals with Disabilities Education Act (IDEA) state grants. The proposal would allow eligible students to take that funding with them to the public or private school or district of their choice. While such student-based funding is gaining popularity, can a student really just show up at a school with federal vouchers in hand and demand to be educated? No. It’s not that simple.

For one, federal funds do not come close to covering the cost of that child’s education. To solve that roadblock, Romney’s plan is predicated on another, related concept – open enrollment. Open enrollment ideally gives students an opportunity to seek out the highest-quality educational opportunities, a worthy goal especially when targeted at low-income and high need students. The platform states that under a Romney administration, the U.S. Department of Education would ensure that every state has an open enrollment system.

Paul Ryan’s proposal to cut federal spending by 20 percent has been impossible to ignore – especially what that might mean for education programs. Federal spending currently makes up about 10 percent of annual spending for education, so a 20 percent cut to that spending would only translate to 2 percent of total spending, on average. But what about the impact on non-average school districts?  As it turns out, more than 1,500 districts rely on federal funds for 20 percent or more of their annual revenue, and those districts would take a big hit.

Last week, Ed Media Commons showcased data from the Federal Education Budget Project, Ed Money Watch’s parent initiative, to reveal that these cuts could mean much more for districts that rely more heavily on federal funds. Using Census data on school districts’ total annual revenue and federal revenue for the 2009-10 school year, we calculated the percent of each district’s revenue made up of federal funds, as well as how much each district stands to lose under a 20 percent cut.

Of the more than 1,500 districts that rely on federal funds for 20 percent or more of their annual revenue, seventy-seven would lose more than 10 percent of their annual revenue if Congress were to cut federal spending by 20 percent. Those districts tend to be smaller, with enrollments mostly between 100 and 2,000.

These districts’ reliance on federal revenue can mostly be explained by high proportions of American Indian students. Many districts receive funds under Impact Aid, a federal program that provides funds to school districts with high proportions of “federally impacted” students like American Indians. Because those districts do not benefit from property tax revenue from people living on Indian reservations, the federal government makes up for that lost revenue. For example, Sanders Unified School District in Arizona had an enrollment of 1,049 in 2010 and nearly 97 percent of those students identified as American Indian. Of that district’s approximately $15 million in annual revenue, just over $9 million comes from federal sources. If Congress were to cut spending by 20 percent, Sanders Unified could lose as much as $1.8 million, 12 percent of its annual revenue.

Many large districts would also be disproportionately affected by big cuts to federal education funding. Los Angeles Unified School District, Chicago Public Schools, and Miami-Dade School District, the second-, third-, and fourth-largest school districts in the country, each rely on federal funds for more than 16 percent of their annual revenue. Chicago receives nearly 24 percent, or $1.2 billion, of its annual $5.1 billion in total revenue from federal sources. That federal funding comes from several federal programs aimed at low-income students such as Title I (about $300 million) and Free and Reduced Price Meals (about $140 million), as well as special education (about $90 million). A 20 percent cut to federal funding would mean a loss of $244 million for Chicago.

Of course, some districts rely very little on the federal government for education funding. Over 2,100 districts get 5 percent or less of their annual revenues from federal sources. These districts also tend to be smaller – only 248 have enrollments over 5,000 – and tend to serve wealthier and less diverse populations. Cheshire School District in Connecticut, for example, had an enrollment of 4,950 in 2010 and an annual revenue of over $71 million, only 4.5 percent of which came from federal sources. The district has a student poverty rate of only 3.1 percent, very few English language learners, and is made up of nearly 87 percent white students. This means the district receives very little federal funding under programs like Title I or Free and Reduced Price Meals. If federal spending were cut by 20 percent, Cheshire would only lose $637,000 in revenue.

While a 20 percent cut would be devastating for many school districts, others would lose only the aforementioned 2 percent or even less. These austere times mean that cuts to federal spending are likely. We hope that Congress is able to target those cuts in such a way that protects the most vulnerable students that benefit directly from federal spending. While Title I and Individuals with Disabilities Education Act special education spending are often the most discussed, it is important that programs like Impact Aid also factor heavily into negotiations. For many of these districts, such a cut could mean millions of dollars or a substantial portion of their annual revenue.

Click here to download these data for every school district in the nation. To view programmatic and demographic data, please visit febp.newamerica.net/k12.

We wrote last week about the Senate Labor-Health and Human Services (HHS)-Education Appropriations Subcommittee’s vote to approve fiscal year 2013 appropriations for programs administered by those agencies. Later that week, the Senate Appropriations Committee approved the bill, clearing it for the full Senate’s consideration—though that may not happen—and made its text and report language public so we can view the full details. (For an explanation of how the bill would address the Pell Grant funding cliff in fiscal year 2014, check out this earlier post.)

Many factors will influence the final bill, including the presidential election, the Labor-HHS-Education bill’s political contentiousness (it also funds the president’s healthcare bill, for which a Supreme Court decision is expected this month), and the automatic sequester (across-the-board cuts) scheduled to take effect in January. But the Senate Appropriations Committee bill suggests where Democratic leadership will likely start negotiations later this year.

Under the bill, Title I grants to school districts for economically disadvantaged students and Individuals with Disabilities Education Act (IDEA) Part B state grants for students with disabilities would each get a $100 million increase over fiscal year 2012 levels. The Senate Committee bill also clarifies some details surrounding the implementation of the IDEAmaintenance of effort provision which requires that states provide funding for special education in a given year that is equal to or greater than what they provided the prior year. South Carolina, for example, was fined $36 million by the Department of Education for failing to show adequate spending on special education between fiscal years 2008 and 2011. The bill states that any penalties collected from states in violation of the provision must be redistributed via formula to the states not in violation. It also clarifies that in the year following a violation, a school district must reach funding levels equivalent to the year prior to the violation.

The Senate Committee bill would also maintain funding for Impact Aid at fiscal year 2012 levels, $1.3 billion. In doing so, the committee rejected a proposal from President Obama’s fiscal year 2013 budget request to eliminate $66.9 million in federal payments that compensate school districts that include non-taxable federal property.

School Improvement Grants, a program designed to provide turnaround funds for the nation’s lowest-performing schools, would also be level-funded at $533.6 million. The bill adds a new reform strategy to the existing four plans that grant recipients can use to turn around schools.  Under the new plan, schools could opt to use “research-proven, whole-school reform” strategies such as those that the U.S. Department of Education funded through the Investing in Innovation (i3) program. According to the committee, this change would address the challenges low-capacity schools have had in implementing the four existing reform options.

The bill would also level fund the Improving Teacher Quality State Grants program at $2.47 billion. However, the Senate Committee would set aside 5.5 percent of those funds for use in an existing competitive grant program for national non-profit teacher training and recruitment organizations like Teach for America, rather than the 1.5 percent set-aside provided under current law. That still falls far short of the president’s fiscal year 2013 request, in which he suggested setting aside 25 percent of the programs funding to invest in and collect evidence on best practices for recruiting, training, and supporting teachers and leaders.

The committee bill would fund Race to the Top at slightly-above fiscal year 2012 levels ($549.3 million in 2013 as compared to $549.0 million last year), an unidentified portion of which would be reserved for another Early Learning Challenge round. Investing in Innovation (i3) would receive level funding at $149.4 million for both fiscal years. The committee also emphasized the importance of ensuring a rural focus in future competitions for both programs. Promise Neighborhoods would receive a $20 million budget boost, up to $80 million in fiscal year 2013. Of that, the committee suggests providing $67 million for implementation grants to past planning grant recipients and only $13 million for new planning grants.

And the Fund for the Improvement of Education (FIE), effectively a catch-all fund for various favored projects, would grow from $66 million in fiscal year 2012 to $86 million in 2013. That would include continuing an existing child literacy program at $29 million, as well as a new Science, Technology, Engineering, and Mathematics (STEM) initiative funded at $19 million. The STEM program follows through on a similar proposal from the president in his 2013 budget request. It also adds $1 million to a new competition to fund a national education facilities clearinghouse – virtually a line-item request for the existing National Clearinghouse for Educational Facilities.

In all, the committee approved $68.5 billion for the Department of Education – a slight increase over fiscal year 2012 ($68.1 billion), but still less than the president’s request for fiscal year 2013 ($69.8 billion). We should also note that the House of Representatives has not taken any action so far on a fiscal year 2013 Labor-Health and Human Services (HHS)-Education appropriations bill. Check back with Ed Money Watch for details on the appropriations process. For more on early education spending in the bill, check out this post from our sister blog, Early Ed Watch.

The economic recession that began in 2008 hit state and local tax revenues hard and has had a lasting effect. Many states targeted education budgets—often their largest expenditure—to make up for budget shortfalls in the past few years. Although some states cut general K-12 funding, the federal government has a mechanism to prevent states and districts from making disproportionate cuts to special education services. And for the most part, the strategy has worked.

Under the Individuals with Disabilities Education Act (IDEA), the federal government provides annual grants to states to help cover the cost of providing special education services. To receive these funds, states must meet a “maintenance of effort” requirement that Congress included in the law to ensure that states prioritize special education in their budgets and don’t use federal funds to replace their own spending.

Specifically, states must provide funding for special education in a given year that is equal to or greater than what they provided the prior year. School districts must expend the same amount or more of combined local and state funding for special education as they did in the prior year. If a district spends less, the U.S. Department of Education will fine its respective state government for the difference between that year and the prior year’s spending. If a state allocates less than it did the previous year, the federal government will deduct the difference from its federal IDEA allocation the following year. States are held accountable for district cuts because they receive and distribute IDEA grants.

Many states have met the IDEA maintenance of effort provision (MOE) by making steeper cuts elsewhere in their budgets to maintain their special education funding – a sign that the provision is working as Congress intended. But the law grants states a way out of meeting MOE – a state can apply for a waiver from the Department of Education if it cannot maintain its special education funding due to “exceptional or uncontrollable circumstances.”

How does the Department of Education determine if a state has endured “exceptional or uncontrollable circumstances”? A closer look at some of the reasons state requests were approved or denied helps answer this question.

From the 2008-09 school year to the 2010-11 school year, seven states—Alabama, Iowa, Kansas, New Jersey, Oregon, South Carolina, and West Virginia—requested these waivers. In their applications, these states cited huge budget shortfalls as the reason they could not meet the MOE. Each state specifies in its waiver request the amount of special education funding the state plans to cut. In some instances, states do not discover that they have cut funding until after the fiscal year has ended, forcing them to apply for waivers after-the-fact.

The Department of Education has not approved some of the waivers based on whether or not a state prioritized special education in its budget. For example, Alabama requested a waiver for $9.2 million, a 1.5 percent reduction in the state’s share of special education funding for the 2009-10 school year. According to their request, the state experienced a 10.0 percent drop in tax and other sources of revenue, but protected special education from most of the cuts. Because Alabama cut its special education funding less than other programs, the Department of Education approved the waiver.

The case of South Carolina, on the other hand, shows that the Department of Education does not take granting waivers lightly.

Last year, the state submitted waiver applications for the 2008, 2009, and 2010 school years because newly elected State Superintendent of Education Mick Zais realized the state had not met the maintenance of effort requirement for those years. The Department approved the request for 2008 because the state made cuts to special education that were proportionally smaller than those for other agencies, but it denied the waiver requests for the other years.

Specifically, in 2009 South Carolina cut special education spending by 12.0 percent, or $67 million, despite a decline in tax revenue for the year of only 4.7 percent. In response, the Department of Education is reducing South Carolina’s IDEA allocation for 2012 by $36 million – an amount that reflects the state’s special education spending gap. South Carolina is appealing the Department’s decision.

For 2010, South Carolina requested a waiver for a proposed $75 million special education funding cut even though the state’s revenues had increased by 2.6 percent that year. This funding gap was based on the state’s 2008 special education funding levels, the last year it met the MOE. After the Department denied the waiver, the state ultimately restored the $75 million in special education funding. Had it not, the Department of Education would have likely withheld additional IDEA funding from the state in the annual appropriation. In this instance, it appeared that South Carolina applied for a waiver even though it had sufficient funds to meet the MOE.

Kansas is another good example of the Department’s implicit criteria for approving or denying IDEA MOE waivers – the proportion by which states cut spending for special education cannot exceed the proportion by which state revenues have decreased. For the 2009 school year, the state requested a waiver for the $60 million it planned to cut from its special education budget, a 14.0 percent reduction. In that year, however, the state’s revenue fell by a smaller proportion – 12.3 percent. Ultimately, the Department approved an amended waiver for Kansas for $53 million, a 12.3 percent decrease commensurate with the revenue decline the state reported.

The table below shows the requested waivers by year and the Department’s decision for each of the seven states.

Based on these applications, it appears that the federal government has actually been quite successful in using the IDEA MOE provision to ensure that states maintain or increase their special education funding. No doubt, this has helped maintain the quality of special education services in schools across the country, particularly as spending for other areas of education have dropped. Check back with Ed Money Watch to see if this pattern persists as we continue to track state IDEA MOE waivers.

To see the state waiver applications, click here.