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Auditor flags need to control rising costs of special education

published 3/6/2013
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If lawmakers change the state’s requirements for special education, they should study the impacts first.

That advice was among the recommendations that the legislative auditor made Wednesday in a report on special education that lawmakers discussed at a joint meeting of the House and Senate education finance committees. (Listen to the meeting)

The number of Minnesota students in special education has grown in the past decade even as the state’s overall k-12 population has shrunk. Costs have risen, too, said Legislative Auditor James Nobles. He advised the Legislature to consider ways to reduce the burden that school districts shoulder in special education costs.

In response to concerns raised by some legislators and educators, the report also compared state and federal requirements for special education. It found that, indeed, many Minnesota laws and rules exceed what the federal government demands. What it couldn’t find, though, was detailed analyses of the costs and educational effects of those state requirements.

If the Legislature considers changing the requirements, “We need more information to understand: What are the economic impacts that would result from that change? What are the impacts on the educational outcomes for the children?” said Jody Hauer, a staff member at the Office of the Legislative Auditor.

To some lawmakers, the lack of that information is a sign of what’s wrong with government. “We tend to pile additional regulations and laws on without understanding whether they really benefit the child or if they simply add burden and cost to the system,” Rep. Glenn Gruenhagen (R-Glencoe) said.

Nobles cautioned that changes likely would be controversial. His office found that educators and advocates had strong but diverging opinions about the value of special education requirements that are specific to Minnesota. If some people argue that a certain rule benefits students, others may counter that it simply increases costs. “On some of these questions, you will not be able to reach consensus,” he said.

Controlling costs is hard

The auditor’s report documented a rise in both costs and student numbers in special education. During the 2010-2011 school year, 13.6 percent of Minnesota’s public school students received special education, up from 11.9 percent in 1999-2000. Much of the increase stems from a dramatic rise in the number of children diagnosed with autism spectrum disorders, from about 2,000 students in 1999 to roughly 13,500 in 2010.

In 2011, school districts spent nearly $1.1 billion of state revenues tagged for special education. Adjusting for inflation, that’s a 22-percent increase since 2000.

School officials have long said that government mandates for special education are underfunded and that, as a result, they’ve had to pay the bills with money intended for general purposes such as lowering class sizes. From 2000 to 2011, a median of 56 percent of revenue for special education came from the state, and 11 percent came from the federal government, the auditor’s report found. School districts provided the remaining 33 percent. In the same period, the extent to which local districts have had to “cross subsidize” special education increased 40 percent in 2011 inflation-adjusted dollars, the report said.

The report advises the Legislature to look for ways to rein in special education costs – but also acknowledges that doing so is tricky. Persuading Congress to increase funding for special education is one way to reduce local costs, but the state has limited power in that sphere, the report said.

The funding systems for special education also contain disincentives to controlling costs, the report said. Legally, districts are required to provide special education, and federal regulations say that districts must maintain spending levels for special education from one year to the next. Even so, some districts have found possible ways to cut costs, such as increasing the use of assistive technology with some students, the report said.

Education Commissioner Brenda Cassellius agrees with most of the report’s recommendations. To address some of the concerns it raises, Gov. Mark Dayton has proposed to increase state aid for special education by $125 million in 2015 and $326 million in the 2016-2017 biennium, she said.

- Sarah Lemagie

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