The ruling puts the state one step closer to losing $34 million in federal funding and is the latest development in New Mexico’s legal battle with the U.S. Education Department over special education funding.
At the heart of the dispute is New Mexico’s decision to reduce its special education spending in 2011 while receiving federal special education money.
The U.S. Education Department withholds money from states that don’t maintain or increase their own special education funding each year. The intent of the law, called “maintenance of effort,” is to ensure states are using federal money to enhance services, not to supplant state funding.
The New Mexico Public Education Department argued that because the federal government allowed the state to lower its special education funding in 2010, it should have been allowed to spend less in 2011, too.
The federal department agreed to give the state a waiver for 2010, noting that the recession pummeled the state’s revenues that year.
“I am unpersuaded by (PED’s) arguments,” Judge Richard F. O’Hair said in his ruling last week. The ruling came after an April 8 hearing in Washington, D.C. O’Hair is an appeals judge within the Education Department.
O’Hair’s decision will be sent to U.S. Education Secretary Arne Duncan for review. Duncan will overturn the decision only if it is clearly erroneous, a department spokesman said.
Despite O’Hair’s ruling, PED will continue to pursue a waiver to prevent the loss of funding, PED spokesman Larry Behrens said Wednesday.
“Depending on the outcome of the final decision, PED may appeal to the 10th Circuit Court of Appeals,” Behrens said in an email statement. “The initial decision pertains to preliminary issues and does not address whether PED is entitled to a waiver.”
Rep. Mimi Stewart, D-Albuquerque, said New Mexico should be increasing its special education funding, not arguing to reduce it, and that PED’s legal arguments were misguided.
“They’re perfectly happy with putting less money into special education,” Stewart said.
Meanwhile, if the state does not receive a waiver for 2011, there’s a strong chance federal officials will find New Mexico failed to meet “maintenance of effort” in 2012 and 2013, which would put even more federal funding in peril.