Members of the commission to study special-education costs spent the meeting parsing the major cost drivers district leaders say are increasing and reviewed modeling of a proposed change to catastrophic-aid thresholds.

DOE staff described the DOE 25 supplemental reporting that captures special-education spending by wages, benefits, contracted services, supplies/equipment and transportation and said district-level DOE 25 reports are publicly available. The department acknowledged it has not completed an exhaustive district-by-district analysis for the commission but said it can provide the data upon request.

Several members and SAU administrators emphasized transportation and contracted-service costs as growing line items. DOE and district representatives shared invoice examples showing large variation across vendors: daily rates and mileage charges ranged widely, from $124 per day to more than $600 per day and a reported flat-rate vendor invoice of $7,200 per month. Members attributed some variance to market scarcity (few vendors, recruitment difficulty for drivers and therapists) and contract structures that can produce steep per-student costs for remote or specialized placements.

The commission discussed an LSR that would change catastrophic-aid sharing between the state and districts by lowering the district’s first-dollar threshold (examples discussed were moving toward a $60,000 local-first amount and a per-student cap at $160,000). DOE staff modeled the proposal using current-year submissions: districts submitted roughly $133 million in special-education invoices for 894 students this year; under the department’s calculations the old formula yielded about $78 million in district share and $54 million in state share. Applying the proposed $60,000 local-first model to the submitted population would increase local costs by roughly $4 million and reduce state costs by the same amount for the dataset used; DOE cautioned that the model includes only students currently submitted for reimbursement and that lowering thresholds could change district submission behavior and add students to the reimbursable pool.

Members raised operational concerns: lowering thresholds increases the number of students districts must enter into DOE and Medicaid systems to seek reimbursements; many districts currently only submit students they expect will reach catastrophic caps. DOE staff said the department’s new data system (referred to as NSS2 or NESIS) is still being built and its financial module is not yet implemented; integration with Medicaid-to-Schools (MTS) would require DHHS collaboration and additional development work.

Commissioners asked DOE to provide further breakdowns — by district, by service category (transportation, contracted services, residential tuition), and by placement type (in-state program versus out-of-state residential) — so the panel can better estimate changes to local budgets and the administrative burden districts would face if thresholds change.

The chair asked members to submit ideas and potential data requests in advance of a follow-up meeting; no formal votes on policy were taken during the session.