The bad news is, the state was denied a waiver for underspending by about $34 million in 2011. Moreover, federal officials raised concerns the state may have underspent in fiscal 2012 and may be on track to do so again in 2013, according to a letter from the U.S. Department of Education to state education chief Hanna Skandera.
This issue has been watched closely by school districts, since the outcome could affect their budgets for the coming year. However, it is not expected to affect the services special education students receive.
Under federal law, states must 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. The law is called “maintenance of effort” in education circles, and states that fail to maintain their effort can be penalized by a loss of federal funding.
Skandera said Monday she is focused on the 2010 waiver, calling it a “partial victory.” She said she will continue talking to federal officials, in an attempt to soften or reverse the 2011 denial. Skandera said she believes some of the information they are using may not be right.
“There are some inaccuracies in their assumptions about 2011,” Skandera said, adding that she had just received the 16-page letter Monday evening and still needed to examine it more fully. She said she was not sure how some of the numbers in the letter were calculated.
According to the letter, the New Mexico Public Education Department provided inconsistent information at different times and failed to certify the data it submitted.
States that are denied a waiver can request a hearing, according to the letter, Skandera said she plans to do so and to use every available avenue to appeal the decision.
Contingency plans are in place in case the 2011 denial holds up. Gov. Susana Martinez placed a $20 million allocation in the upcoming budget to help cover the issue, and other legislative language has set aside an additional $16 million.
The letter, which is detailed and technical, essentially explains that New Mexico’s underspending in fiscal 2010 is excusable, because state revenues dropped precipitously that year and were hard to predict.
In 2011, however, the letter states that New Mexico had enough money to fully fund special education, but failed to do so, underspending by about $34 million. This means that, if no changes are made, the U.S. Department of Education will reduce New Mexico’s special education allocation by that amount for one year.