Special-needs vouchers cost districts $2.4 million in aid

Wisconsin school districts will lose $2.4 million in state aid this year to fund 202 students with disabilities in private schools, state figures show.

Milwaukee Public Schools and 21 other districts will be affected by the new Special Needs Scholarship Program, which allows qualifying resident students to attend private schools on state-funded tuition vouchers worth $12,000 annually. Many of the new vouchers are supporting children who were already attending private schools. 

One school-choice advocate said more children qualified for the program than anticipated and the funding mechanism will need to be addressed in the next legislative session. But the bigger story is that there’s a limited amount of school funding to go around, and more children in private schools are qualifying for a share of it than ever before. And children with special needs are expensive to educate no matter where they go to school.

“What I’m excited for is the addition of resources,” said Dwayne Jobst, principal of the 310-student Lake Country Lutheran High School in Hartland. The school will receive $108,000 this year for nine students who qualified for special-needs vouchers, including five students who were already attending the school.

The way Jobst sees it, the state gets its money from taxpayers, and his private school's parents are taxpayers.

"Should they not have some say in where their money goes?" he asked.

Down the road in Hartland, Arrowhead Union High School officials opened their state aid figures this month to find a new deduction of $84,000 to pay for seven resident children using special-needs vouchers. 

The method for paying for special-needs vouchers results in districts with declining enrollment, like Arrowhead, losing a separate cushion of funding. That amounted to an additional $20,000 loss from last year, Business Manager Steve Kopecky said.

“It’s a new tweak we have to budget for," he said.

Districts can recoup some of the aid losses through a complicated funding formula. But over time, most districts would still face a gap of at least $2,000 per participating child each year.

Milwaukee Public Schools has the largest number of resident children using new special-needs vouchers. The district will lose about $1.8 million in state aid to pay for about 150 resident students. 

Most Milwaukee suburban districts have just one to three resident students using special-needs vouchers, and for some, the impact is minimal. The Waukesha School District will lose $48,000 to pay for four resident students in private schools. That's barely noticeable on a balance sheet for a district with about 13,000 students.

Two options for eligibility

The Special Needs Scholarship Program was passed as part of the 2015-'17 state budget, despite protests from disability rights advocates who feared the program would divert resources from public schools, which have the legal obligation to serve all students with special needs. 

Private schools argue that they serve more special-needs students than they ever get credit for, and that special funding could help them get more students the appropriate resources.

Ultimately, the program was inserted into the budget without public debate. Previous failed versions of the bill were aimed at helping parents who were unhappy with services in their school districts and had been denied attending another through the open-enrollment program. Districts can deny open-enrollment applications from non-resident students if they don't have space or the resources to serve them.

By the end of June, 28 private schools had registered to participate in the new program.

For students to be eligible, they had to be enrolled in public school the previous year, have an active special-services plan or an individualized education plan, and have been denied a seat in another district through open-enrollment. In a second option, a child only needed to have a special-education plan and an open-enrollment denial sometime within the past five years.

Private schools could take advantage of the second option — available for just one year — to shift some of their existing special-education students into the program. Once those students are in the program, they can stay in until they graduate.

The second option is how Lake Country Lutheran High School got new resources for some of its existing students. And it's also how St. Marcus Lutheran School, where almost all children attend with a Milwaukee Parental Choice Program voucher worth about $7,300 annually, shifted almost 70 students onto special-needs vouchers.

St. Marcus leaders directed their parents of children with disabilities to apply for open enrollment at suburban districts that they knew had no seats available and that they knew their parents had no desire to attend. Once the districts denied the applications, the St. Marcus children were eligible for the higher-paying vouchers.

"This law has created an incredible opportunity for our special-needs students," said St. Marcus Superintendent Henry Tyson, while acknowledging larger problems with the structure of the program.

Thanks to generous donors, St. Marcus has built a special-education program that it couldn't afford with the low per-pupil cost of the Milwaukee voucher alone. The additional funding through the special-needs voucher, Tyson said, allows the school to provide even more resources for students who desperately need them.

In future years, children will have to attend a public school before they can become eligible for the special-needs voucher.

Jim Bender, the president of the pro-voucher group School Choice Wisconsin, said the enrollment process and subsequent funding for special-needs vouchers will be part of the upcoming legislative session.

"We want the program to work for parents, schools and districts alike," he said.

Email Erin Richards at erin.richards@jrn.com or call (414) 224-2705 / @emrichards