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Special Ed In State May Lose $43M

ALBUQUERQUE, N.M. — New Mexico may be poised to lose $43 million in federal special education money next year because it failed to spend enough on the programs in fiscal 2010 and 2011, the Public Education Department confirmed Wednesday.

And under the worst-case scenario, the state could lose out on that much federal special education money every year, indefinitely.

State education chief Hanna Skandera, who had not yet arrived here when the budgets in question were drafted, said her department is trying to get a waiver from the U.S. Department of Education that would solve the problem.

In case that doesn’t work, Gov. Susana Martinez’s executive budget proposal includes $20 million that could be applied to the problem.

Moreover, Skandera said Congress is considering legislation that would give states a reprieve. If the bill passes, New Mexico would lose $43 million as a one-time sum, instead of losing that much every year.

Several House Democrats said the Public Education Department should have told them about the problem long ago.

The problem springs from federal law that requires states to maintain or increase their spending on special education each year. The intent is to make sure federal special education funding is enhancing services, rather than supplanting state spending.

Skandera said special education funding is somewhat harder to predict in New Mexico than in other states. She said while many states have a budget line-item for special education, New Mexico funnels special education through a funding formula that grants money to schools on the basis of how many students they have. The formula assigns extra funding to students with special needs.

Skandera said the formula makes it easier for New Mexico to accidentally run afoul of the federal spending minimum.

She also emphasized that she believes New Mexico fulfilled the purpose of the federal law. She said when students are making gains, they may not need as many special education services. So if teachers are doing a good job with students, the state can get penalized for decreasing special education funding.

“If you actually are a good steward and serve these students well, and if the maintenance of effort is strictly about more dollars or less dollars, you could be doing better for your children and actually be dinged for it,” Skandera said.

Skandera said she believes New Mexico has spent enough on special education since fiscal year 2011 to avoid running afoul of federal law.

She said she has been in contact with federal officials since shortly after arriving in New Mexico, working with them to determine how best to handle the problem. She said it was not initially clear New Mexico would need a waiver, but the PED began drafting a request for one in spring 2012.

The basis of the waiver is that New Mexico was undergoing financial hardship during the underfunded years and could not afford to maintain spending levels. But Skandera said she believes New Mexico still fulfilled its obligations.

“We believe we met the expectation of the law, which is make sure all your students are served, and that we were in a fiscal downturn that impacted total dollars,” Skandera said.

There is still no decision on the waiver, and the PED has until Feb. 14 to gather materials and answer questions from federal agents. In particular, the PED is working to clarify with federal officials that New Mexico’s special education enrollment numbers include gifted students, while the federal definition of special education does not. That difference has led to some confusion, and an initial estimate that New Mexico might owe as much as $93 million. Skandera said during the next two weeks, the PED will work with the Legislature on the waiver revisions to make sure lawmakers approve.

Rep. Mimi Stewart, D-Albuquerque, said that effort is too little, too late. Stewart chairs the House Education committee.

“I found out about this last week,” Stewart said. “They did not tell any of us about this … It’s the Legislature’s job to fund education appropriately. If we are working with an administration that isn’t telling us what’s going on, that’s hard to do.”

Skandera said the state’s delegation to Congress was copied on the initial waiver application sent in August. She said discussions with state lawmakers began when Martinez rolled out her executive budget proposal, since it included the $20 million appropriation.

Skandera said there have been talks with federal officials about dealing with the $43 million loss over two years, so the $20 million would cover nearly half the cost this year, if the state doesn’t receive a waiver.

Lawmakers said they wish they had known about the problem sooner, given that Skandera has been in talks with federal officials since 2011.

“I just think that we wish we would have known about this situation long before now, and we might have been able to resolve the situation faster and better than we are at the moment,” said House Majority Leader Rick Miera, D-Albuquerque.

Skandera and Miera emphasized the problem will be solved in a way that does not impact the services that students with special needs receive.

“The most important thing I want to say is, whatever we negotiate with the federal government, we’re going to make sure it does not pass on to the students that are receiving special education. That will not happen,” Miera said.
— This article appeared on page A1 of the Albuquerque Journal

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