Special Education Excess Cost Cooperative

While students with extraordinary learning needs represent less than one percent of Connecticut’s public school population, supporting these students with the special education services they need and deserve frequently results in high and volatile costs for towns and school districts. These services are often referred to as “excess cost” services because the cost of providing them to a student is at least four and a half times the district’s net current expenditures per student, which qualifies the district for partial financial reimbursement through the State’s Excess Cost grant.

However, for many of Connecticut’s municipalities and local school districts, these higher-need special education costs make budget planning difficult and unpredictable as districts do not know what their special education excess costs will be in advance. As a result, municipalities and school districts face an annual challenge as they plan for a balanced budget that benefits all students and ensures adequate funding for students with disabilities — no matter what their needs are.

Our Solution

Our solution to this special education funding and budget planning challenge is the development and implementation of a Special Education Excess Cost Cooperative (the Co-op). The Co-op is a special education finance system that allows the state and local governments to share in special education excess costs and keep decisions and delivery of special education services local.

To learn more about the Co-op, view our infographic and one-pager with more information

How the Co-op Works

Using a cooperative-type model, the Co-op makes special education excess costs predictable for districts and towns, allowing for better budget planning. The Co-op achieves this predictability by aggregating special education excess costs together at the state level to leverage the fact that, on a statewide basis, special education excess costs are predictable, even though they are frequently volatile at the district level.

The Co-op will be funded by contributions from local governments and the State of Connecticut. The State will contribute the current Excess Cost grant to the Co-op, while local governments will make a Community Contribution to the Co-op that will always be less than their total excess costs. The Co-op will allow towns and school districts to know exactly what their special education excess costs will be up for the upcoming school year, as they are planning their budgets, and it will reimburse districts for 100% of special education excess costs in the current year.

The predictability provided by the Co-op alleviates the budgetary strain that currently occurs when a student with disabilities’ needs require resources above a district’s budgeted excess cost amount, or when a high-needs student with disabilities enrolls in a district after budget adoption.

How the Co-op Benefits ALL Students
  • Ensures adequate funds are always available to provide services for ALL students with extraordinary needs
  • Stabilizes general education funding by ensuring districts don’t have to resort to dipping into their general education budget to cover the cost of unexpected special education expenses
  • Ensures all students with extraordinary special education needs receive the educational services they need and deserve, no matter where they live or what their needs are
  • Provides predictability and stability for students with extraordinary disabilities by ensuring funding for their special education services, even during financially uncertain times
How the Co-op Benefits ALL Towns
  • Removes excess costs from the Minimum Budget Requirement (MBR) to provide towns with fiscal stability and viability, and controls unnecessary property tax increases
  • Provides ALL school districts with the exact amount of funding they need to cover their excess costs so additional funding from their town to cover excess costs will not be needed
  • Establishes predictability in budgeting for towns and school districts
  • Prevents school districts from having unexpected budget deficits due to excess costs
  • Gives town officials a seat on the Co-op's board of directors and a greater voice in special education excess cost funding
How the Co-op Benefits ALL School Districts
  • Guarantees ALL school districts 100% of the funding they need to cover excess costs and provide services for their students
  • Provides school districts with funding for excess cost students as a grant to the school district, meaning the funding will not be part of the school district's appropriation from its town and towns will not be allowed to retain the grant for non-special education purposes
  • Prevents school districts from having unexpected budget deficits due to excess costs
  • Establishes predictability in budgeting for school districts and towns
  • Gives educators a seat on the Co-op's board of directors and a greater voice in special education excess cost funding
Independently Studied & Examined

As part of the biennial state budget for fiscal years 2018 and 2019 (Conn. Acts 17-2 (June Special Session)), the Special Education Cost Model Task Force was established to conduct a feasibility study on a cooperative model that included all special education students, not just those whose costs have reached the excess cost threshold. The task force decided to examine an excess cost-only model in addition to the more expansive model that included all special education students.

The task force hired an independent actuarial consultant to perform feasibility studies to determine if the Co-op models considered will remain solvent and increase predictability for towns and school districts. The actuarial consultant determined the models examined are feasible and create in-year predictability, as well as predictability across years, for towns and school districts.

While the task force did not make any recommendations to the General Assembly in its final report, the task force did highlight the benefits and potential challenges of each model it investigated. The full task force final report, along with meeting minutes and other documents from the task force, can be viewed by clicking the links below.

Final Report of the Special Education Cost Model Task Force (July 2019)

Task Force Meeting Minutes and Other Documents