We are a little over halfway through the 2011 legislative session. One topic of discussion this year may be less familiar to the general public; the subject is maintenance of effort (MOE), especially as it relates to special education funding.
MOE is a requirement for recipients of federal money to maintain a specified level of state and local funding in the preceding fiscal year in order to receive additional federal dollars.
Meeting MOE and receiving those federal dollars for special education has never been in question. It’s always been a given. The funding has not been in jeopardy.
The House, Senate and Governor always have presupposed MOE would be met. Any impression that failing to meet MOE has been up for discussion is either a simplistic assumption or a tactical non-starter; and yet, it makes for an easy storyline with more pot-stirring potential than the real story.
The real story is a tedious debate over when, how and how much. The difference between fiscal years 2009 and 2010 state and local funding, factored into a complicated funding formula, will determine what Kansas needs to do to meet MOE requirements.
According to the Kansas Department of Education, K-12’s unencumbered cash balance for special education, which includes special education and cooperative special education, was $129,916,949 on July 1, 2005 — this is money left in the special education accounts after expenses. By July 1, 2008, the unencumbered cash balance for special education had grown to $190,757,819. On July 1, 2010, the unencumbered cash balance for special education was up to $216,200,486.
Clearly, special education has funding available, but those funds may only be used for special education. They cannot be used, for example, to meet MOE requirements. The legislature does not determine how education money is dispersed, so any questions regarding the use or non-use of the unencumbered cash balances would need to be directed to districts.
Based on numerous variables and a complex funding formula, the requirement needed for the state to meet MOE will be released and certified by the U.S. Department of Education later in the year. When it is, it will be met. There have been many suggestions and disagreements between the House and Senate on how this could be accomplished.
Since money gained from the feds will be added to special education’s about $216 million cash balance and since the state is essentially broke, it has been the House’s position that we wait until the actual “invoice” comes in from the feds before allotting the money, since: 1) We’re going to pay it; 2) It’s not due yet; 3) We have heard five different estimates—from $13 to $26.4 million; and 4) The urgent task at hand is to adjust the FY 2011 budget now to reflect Kansas’ less-than-expected revenue numbers.
It would be difficult to communicate adequately the negotiation process between the House and Senate in conference committee, especially regarding how, when, and how much to pay for MOE. I would have to present both sides, and as much as I would try to give a balanced explanation, there would be individuals, myself included, who felt I’d missed something. Bottom line, in light of current economic realities, the House wants to discuss how we can capture dollars, not how we can spend new ones.
The Governor’s 2011 rescission bill for expenditures through the June 30 fiscal year would leave us $35 million in the bank to deal with inevitable contingencies; the House’s proposal would leave us $37 million in the bank; the Senate’s starting place spends additional money which, if left as is, would place us $35 million in the hole— around a $70 million gap between the Senate’s proposal compared with the House’s proposal and Governor’s rescission bill.
I believe it was important to share one aspect of the negotiation process — the MOE requirement for special education — in order to put to rest concerns about special education funding being in jeopardy. Unfortunately, this is the kind of storyline that is turned into headlines and passed along, even when the dollars and details don’t support it.
Marc Rhoades is a Republican member of the Kansas House of Representatives, representing the 72nd district including Harvey County.
