Navigating the complexities of Special Education funding

In my previous articles, I’ve shared how our schools are primarily funded through a delicate balance of state aid and local property taxes. However, there is a specific area of school finance that remains one of the most misunderstood and challenging aspects of our budget: Special Education funding.
As your District Administrator, I believe in transparency. You deserve to know how your tax dollars are utilized and the hurdles we face in ensuring every student—regardless of their needs—receives a high-quality education.
The “Reimbursement” Reality
In Wisconsin, special education is funded on a reimbursement basis. This means our district must first pay for the mandated services our students require. We then submit those costs to the state and receive a percentage back the following year.
Think of it like an insurance claim where you pay the bill upfront, but the insurance company only covers a fraction of the cost. For the 2022–2023 school year, our district’s eligible expenses totaled $1,389,045.52. These funds paid for:

•Dedicated Staff: Our Early Childhood and Cross-Categorical special education teachers, counselors, nurses, and paraprofessionals.
•Specialized Services: Contracts for occupational therapy, physical therapy, and speech and language services.
•Student Support: Specialized transportation and assistive technologies.
At a reimbursement rate of 32.4%, we received only $450,064.28 back in aid. This leaves a significant gap that we must fill.
Closing the Gap: The General Fund Transfer
Because the state does not fully fund these legally mandated services, we are required to perform a “Fund Transfer.” We move money from our General Fund (Fund 10)—which pays for things like classroom supplies, heating, and general education teachers—into the Special Education Fund (Fund 27).
As the number of students requiring services grows and the cost of service rises, the “impact” on our general budget increases. The Bottom Line: Because state reimbursement is capped at a fixed percentage, every extra dollar we spend on these rising costs must be pulled directly from our General Fund - operational budget.
A Broken Promise and Funding Inequity
The most frustrating part of this process is the unpredictability of state support. This past year, we finalized our local budgets in October based on a promised 42% reimbursement rate for 2025. However, on November 15—well after our budget was adopted—the Department of Public Instruction informed us that the state would only cover 35%.
This sudden “moving of the goalposts” creates an immediate deficit that we must manage. Furthermore, there is a glaring inequity in how the state prioritizes different types of schools. While public schools like ours struggle with reimbursement rates in the low 30s, the state provides a 90% reimbursement rate for private “special needs vouchers.” NOTE: These schools do not have to accept students with significant or severe needs. Public schools are here for ALL students, regardless of need.
Our Commitment
Despite these financial shortfalls, our mission remains unchanged: The success of every student. We will continue to be responsible stewards of your resources, advocating at the state level for fair and predictable funding while ensuring our classrooms remain a place where every child can thrive.
I am proud of the work our staff does every day, and I am grateful for a community that values the education of all children.