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Blue Ribbon Commission Studies Special Education Funding Changes

By March 8, 2026No Comments

Blue Ribbon Commission Studies Special Education Funding Changes

The Blue Ribbon Commission (BRC) was created by the 2025 Legislature.  Its legislated purpose is to develop and present to the legislature and the governor an action plan for transforming special education services while maintaining a free appropriate public education for students with disabilities by October 1, 2026.

In addition, the Commissioner of Management and Budget must assume a $250 million reduction in the appropriations for special education aid for the biennium beginning July 1, 2027. In creating the biennial budget beginning July 1, 2027, the legislature must identify enacted provisions that were recommended by or based on the recommendation of the Blue Ribbon Commission on Special Education. To the extent these recommendations do not reach $250 million, the Commissioner of Education must reduce the cross-subsidy aid percentage to reach $250 million. (See 2025 Enabling Legislation)

Hear two rural members of the BRC discuss the work of Commission at MREA’s Advocacy Briefing Monday, March 9 at 10 am.

The BRC has met five times and has five active sub-committees. To address recommendations to reduce special education appropriations by $250 million, the BRC is looking at the following four reimbursement (aid) funding streams that come to districts based on previous year’s expenditures.

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MREA took the MDE data for these funding streams and projected a 50% special education cross-subsidy reimbursement (aid) based on the latest special education cross-subsidy data, which is for FY24. To control for district size and assess the relative impact of these funding streams on individual school districts and relative impact of BRC funding reduction recommendations, MREA analyzed and mapped these funding streams by ‘25-26 APUs.

View District Run for Four SPED Reimbursement Funding Streams

Complicating this deliberation and decision making is the Federal Maintenance of Effort (MOE) Requirement under IDEA ensuring Local Educational Agencies (LEAs) spend at least the same amount of local—or state and local—funds for special education services as they did in the previous fiscal year. It prevents the substitution of federal IDEA Part B funds for local tax dollars.

Key Aspects of Special Education MOE

  • Purpose: Ensures that federal funds supplement, not supplant, local/state financial commitments to students with disabilities.
  • Components:
    • Eligibility Standard (Budget): The LEA must budget for the upcoming year at least the same amount of state and local funds spent in the most recent fiscal year.
    • Compliance Standard (Actual Spending): The LEA must spend an equal or greater amount in the current year compared to the prior year.
  • Consequences of Failure: Failure to meet MOE may require the LEA to pay back the shortfall using non-federal funds.
  • Exceptions: LEAs may reduce spending if specific conditions are met, such as the voluntary departure of special education staff, a decrease in enrollment of children with disabilities, or the termination of costly, long-term purchases.  (source: MDE)

Join the MREA Advocacy Briefing on Monday, March 9 for a discussion of the work of the Blue Ribbon Commission as it addresses its legislative directives, these funding streams and the constraints of Maintenance of Effort.