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Feds Back Off Easing Penalties for Districts That Cut Special Ed. Funding

In a letter today, the U.S. Department of Education took back an offer it made to school districts last summer that would have let them cut special education spending in exchange for a lesser financial penalty than in the past.

The federal "maintenance of effort" clause has been built into special education spending rules to buffer students with disabilities from changes in services triggered by the ups and downs of public spending and politics. Violating the rules can lead to financial penalties for districts and states.

In a letter to the National Association of State Directors of Special Education last June, the department said—to the alarm of many in the special education community—that if districts lowered their special education spending for any reason, whether or not it was because of exceptions built into the law, districts didn't have to resume spending at the previously higher level. They can use the lower rate of spending as their new benchmark for future special education budgeting.

Today, the feds took that back.

"After further review, we have determined that the level of effort that a [school district] must meet in the year after it fails to maintain effort is the level of effort that it should have met in the prior year, and not the [district's] actual expenditures. We are, therefore, withdrawing the letter," wrote Alexa Posny, assistant secretary for the office of special education, and Melody Musgrove, director of the office of special education programs.

The now-retracted letter said that a district "is not obligated to expend at least the amount expended in the last fiscal year for which it met the maintenance-of-effort requirement. In other words, each year's [district] maintenance-of-effort obligation is based on the actual amount expended in the immediate prior fiscal year," Musgrove wrote in the now-retracted letter.

The new letter says the only way districts can cut spending without penalty is for the existing exceptions. One of those few exceptions to the maintenance-of-effort rule is when a district experiences an actual decrease in expenses, such as when an experienced, highly paid special education teacher retires or a high-needs student leaves a district.

The department's letter today was in response to one from Kathleen B. Boundy, a co-director of the Center for Law and Education in Boston. She challenged the department's position and asked that the guidance be rescinded.

"We are thrilled with this reversal. It is a tribute to all of the parents, advocates, and attorneys who worked to communicate to [the Office of Special Education Programs] and Congress about the inaccuracy of this guidance. Of course, we are most grateful to [the Center for Law and Education] for its superb work in constructing the legal analysis and we are grateful to OSEP for reviewing our concerns and taking this action," said Candace Cortiella, director of the Advocacy Institute and who also runs IDEA Money Watch, which tracks special education spending under the Individuals with Disabilities Education Act.

The backtracking may be unwelcome by other groups, however. Last year, the American Association of School Administrators heralded the department's action.

"School administrators have been forced to cut to the bone when it comes to general education costs, but current IDEA [maintenance-of-effort] requirements prohibit them from making the same difficult cuts to special education," Sasha Pudelski of AASA had said at the time. "Fairness dictates that all programs and populations share in the burden of cuts, rather than holding a single program exempt from the cuts. If the situation was reversed and special education budgets received all the cuts while general education students' budgets were left entirely intact, parents and school leaders would never stand for that."

For its part, the National Association of State Directors of Special Education, which triggered all of the back and forth, said it is comfortable with the Education Department's new position.

"We understand that a lot of other folks in the disability community were upset with the [Office of Special Education Programs'] interpretation," said Nancy Reder, the group's deputy executive director. "We think the revision makes sense."

As other groups weigh in, you'll read their thoughts here. Whether there will be flip-flopping on this issue again remains to be seen. The Education Department's letter today also said they plan to seek comments from the public on this issue.

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