Committee commences Extraordinary Cost Fund study

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Committee commences Extraordinary Cost Fund study

Legislators tabbed to review special education funding began their study recently (6/13).


The 13-member legislative panel convened to review South Dakota’s extraordinary cost fund for special education, which districts can apply for to receive additional funding for special education costs.


“It’s an important subject for all of us,” Committee Chair Rep. Mary Duvall said.


LRC Fiscal Analyst Lucas Martin outlined the scope study for committee members, noting its focus on the increasing need for special education and its services, what is behind the need for increased funding, state and federal responsibilities to special education, how students are being identified for special education services and how adequate funding can be provided.


“Our goal should be not just to study the subject, but come up with some recommendations,” Committee Vice Chair Sen. Jim Bolin said.


To get the committee started on the path towards potential recommendations the initial meeting provided an overview of special education’s evolution throughout the years and the role of property taxes in special education funding, as well as a review of special education funding.


S.D. Department of Education Director of Finance & Management Tami Darnall noted the Special Education child count “has been growing” in recent years, with the 2017 count at more than 21,000 students identified across the six disability levels.


Darnall added in FY18, 94 school districts did not receive any state funding because their amount of local effort raised exceeded the formula need. The amount of lost local effort exceeded $23 million statewide.


The extraordinary cost fund, which was established in 1995, was outlined by Darnall. ECF was initially based on what remained after the formula was fully funded and what was carried over from the fund in the previous year. The fund was adjusted during the 2013 legislative session to set a cap on ECF at $4 million plus funds set aside from the previous fiscal year.


“It was an attempt to really get a handle on how much funding was truly available,” Darnall said.


Thirty-six districts requested ECF dollars in the 2013-14 school year with $3.1 million expended. After the legislative adjustment to ECF in 2013, between 2014-15 and 2017-18, the number of districts requesting ECF dollars never exceeded 30, but the dollars expended surpassed $4 million in three of the years.


Darnall added in FY19 there is the potential for an additional $5.8 million in special education funding needed for school districts, which ECF would be accessed to cover.


Representatives from three school districts – Bon Homme, Brookings and Watertown – shared their experiences with special education with the committee.


“We are seeing an outpace of special needs services,” Brookings Superintendent Klint Willert said, which was a sentiment shared by each district, and added the district doesn’t “identify students for special education services unless we absolutely have to.”


Brookings Director of Special Programs Wendy Otheim noted the difficulty in determining the district’s special education needs from year-to-year.


“You don’t know what you’re going to have every year,” Otheim said. “You don’t know what to project.”


The committee is set to meet again on Thursday, July 26.


For updates on the ECF study, and other legislative interim activities, check the ASBSD Blog, Twitter feed and Facebook page.

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