Volume I, No. 21

April 30, 2009

Reclaiming Local Dollars Under IDEA

The following are excerpts from an article from the Association of American School Administrators (AASA).

The Individuals with Disabilities Education Act of 2004 includes language designed to ensure that as the federal government increases its commitment to special education, local districts are able to reclaim local dollars spent to cover the federal shortfall. Specifically, districts are allowed to reduce their local effort in special education by an amount equal to 50 percent of their federal increase. The only caveat is that districts will have to spend their reclaimed local dollars for activities authorized under the Elementary and Secondary Education Act. The $11.3 billion increase for IDEA under the American Recovery and Reinvestment Act has provided most districts the first possible opportunity to take advantage of this flexibility.

In order to qualify for the 50-percent flexibility, districts will have to “meet requirements” under IDEA. In the April 1 guidance on IDEA, the U.S. Department of Education noted that districts will have to actively reach out to their state departments in order to determine if they “meet requirements.” As more districts have started to reach out to their states, it is becoming evident that there is a wide variation between states regarding how they classify districts. Under IDEA, there are four classifications for districts:

• In compliance
• Needs assistance
• Needs intervention
• Needs substantial intervention

Some states seem to be wrongly drawing the line for eligibility above the ”needs assistance” line, prohibiting the majority of districts from being eligible for the 50 percent flexibility. In AASA’s opinion, this is not an appropriate drawing of the line. Most districts in the ”needs assistance” category are there for the first time. When ”needs assistance” is the trigger point for a state’s obligation to prohibit the reduction of fiscal effort, districts have no opportunity to correct a problem before facing the sanction on maintenance of effort.

Without the ability to utilize the flexibility under IDEA, districts will have a hard time spending all of the IDEA funding. Because the IDEA dollars have been detailed as just two-year dollars, districts cannot expand the services for their students under special education without being held liable for the continuation of those services after districts are no longer receiving the ARRA dollars. With the limited nature of rural district’s smaller budgets, this could become an even greater concern.

AASA is working with the U.S. Department of Education and other national organizations, including the National Association of State Directors of Special Education, to resolve this issue. AASA is committed to ensuring that the maximum number of districts have access to their intended flexibility. We plan to share additional information in upcoming newsletters.