According to the state Department of Education, South Dakota’s funding formula for special education has remained “essentially unchanged” for 25 years.
Practitioners say the formula has failed to keep up with actual costs, but lawmakers are hesitant to approve anything that leads to higher taxes.
Monica Waltman is the director of special services with the Douglas School District in Box Elder. She supports House Bill 1098, one of a handful of bills in play this session looking to adjust that formula.
Waltman said HB 1098 addresses a longstanding misalignment in how special services are funded.
"It's not like this is an issue of new programs or sudden changes in the law," she said. "It’s just that student need—particularly students with medical, behavioral, and mental health needs— require more adult support and more specialized staffing and more coordination than they did years ago.”
HB 1098 recategorizes students with certain behavioral and medical needs from Level 1 to Level 2 disability status under state law, which increases the amount of state aid school districts receive for services they're federally obligated to provide to those students. But solving that problem creates another for policy makers anxious about property taxes.
Grant Judson with the Bureau of Finance and Management testified against the bill in the House Education Committe. He said the adjustments would amount to a $16.5 million increase in property taxes, with $7 million from owner-occupied properties.
“So the increase in property taxes is due to those students now being eligible for Level 2, which in turn is a higher per-student amount, and that requires the levels to be adjusted for the state share to be maintained," Judson explained to committee members.
The committee sent the bill to appropriators with a Do Not Pass recommendation based on those costs.
Monica Waltman understands the timing may not be right for this bill to gain tractions, but until the funding formula is adjusted, she said school districts will continue absorbing costs in other ways: from delaying hiring more staff to increased case loads for existing specialists.
“Those strategies certainly keep services going, but they’re not sustainable long term solutions at all," she said.
The other bills related to special education funding have not yet been heard in committee.
