Texas school districts slashing $300 million in special education funding

Lone Star state school districts are slashing $300 million in special education services, according to Texas news reports.  

The state’s school districts are encountering significant budget cuts due to a billing dispute that arose between the state and federal governments dating back to 2017. The anticipated outcome is a collective loss of over $300 million annually in special education funding.

Rick Ruiz, Assistant Director for Special Education at Tuloso-Midway ISD, said his department was initially expecting $606,000, but in light of the adjustments, they are now only receiving $156,000.

The difference between the expected and revised amounts for Tuloso-Midway's special education funding is nearly half a million dollars.

Districts receive funds through the School Health and Related Services program (SHARS) with Medicaid.

They receive reimbursement from the federal government when their staff offers medical services to special education students, as opposed to regular educational services.

This indicates that the child needs medical attention as well as physical assistance from a school employee. In order to receive reimbursements, the district documents the activities, and files the process to claim the funds back.

The problem didn't arise suddenly.

It traces back about seven years when an audit revealed that Texas schools were inaccurately coding items meant to be considered as medical services.

This misclassification led to overpayments, causing a significant reduction in the state's former special education funding, from $700 million to approximately $300 million less annually.

The federal administration's decision has caught many districts off guard, especially since they typically receive their budget documents in December. With only two weeks into January, these districts now face the challenge of figuring out how to support the remainder of the school year's budget.

“We'll need to find ways to maximize our resources to account for that,” Ruiz explained.

He highlighted the difficulty of a sudden turnaround, stating, "It’s very difficult to have a quick turnaround and say, ‘Hey, by the way, you’re missing out on almost $500,000 that you could have had.’”

Several districts report existing challenges with staffing shortages, insufficient funding, and economic uncertainties. The additional funding cuts could deepen these issues, potentially triggering a domino effect throughout the halls of Texas schools.

“It’s real easy to understand that now you’re impacting the entire student body, the entire district,” Ruiz added. “Not just a special pop. We’re going to provide a quality education to our students, regardless of what’s going on.”

Many educators anticipate that numerous school districts will likely have to depend on the state for assistance in addressing the lack of funds.

A recent study reveals that Texas is ranked 49th overall in special ed across the country, a position that remains nearly identical from the 2016 report. Notably, Texas has consistently held the 49th or 50th position (out of 51) in every edition of the report since its inception in 2007.

In a separate report, the overall ranking of the Texas public education system is found to be 28th among the United States.