This bill amends the special education aid formula by establishing a new threshold for state aid distribution to school districts. It sets the minimum cost for which districts can receive aid at $60,000 per pupil, replacing the previous calculation of 3.5 times the state average expenditure per pupil. The bill introduces a cap of $200,000 per pupil for costs eligible for state reimbursement, with the state covering 80% of costs up to this amount and 90% for costs exceeding it. Additionally, it stipulates that no special education aid will be reimbursed by the department of education for more than a total of $160,000 per pupil. The bill emphasizes that only expenses directly related to special education services will be considered eligible, while basic classroom expenses and non-mandated transportation are deemed ineligible.

Furthermore, the bill requires school districts to maximize the use of other revenue sources, such as Medicaid, to offset reimbursable costs, with any amounts received from these sources deducted from the total reimbursable amount. The changes are set to take effect on July 1, 2028, and the fiscal impact on local expenditures and revenues beyond FY 2029 is indeterminable. The Department of Education has expressed concerns regarding the increased administrative workload and potential conflicts with federal regulations, as the bill prioritizes financial considerations over the specific needs of students with disabilities. Overall, while the bill aims to reform special education funding, it raises questions about its implementation and the challenges it may pose for school districts.

Statutes affected:
Introduced: 186-C:18
HB1563 text: 186-C:18