MOE Reductions in 100 Largest School Districts

IDEA Money Watch has analyzed the data submitted by states regarding the reductions taken to local spending on special education – called ‘maintenance of effort or MOE – in the nation’s 100 largest school districts.

In 2008-2009, these 100 districts educated 1,424,053 students with Individualized Education Programs (IEPs) – that’s 24.2 percent of the nation’s special education students. On average, 12.8 percent of the student enrollment in these districts are students with IEPs. So, while we know the MOE reduction totals by state, it was important to look at how these 100 districts handled the enormous influx of IDEA federal funds sent to them by the Recovery Act in 2009.

As we have reported, the IDEA Part B funds in the Recovery Act triggered a provision in IDEA that allows local school districts to reduce the amount of local funds being spent on special education by up to 50% of an increase in federal funds, and to keep local spending at the new, lower level for each succeeding year. However, a district’s ability to take this reduction was dependent upon the “rating” it had received from it’s state dept. of education. (Many thought this was wrong, as we reported here.)

This annual “rating” is based on how the district is implementing the basic requirements of the IDEA – things like doing evaluations in a timely manner, completing IEPs for children transitioning from Part C to Part B, resolving disputes filed by parents. The ratings don’t take into account the performance of students with disabilities in the district – things like graduation rate, dropout rate, performance on state assessments. (We wrote about this issue many months ago in Closer Look: How States Determine Local District Performance.)

Our analysis of the MOE reductions taken in the nation’s 100 largest school districts turned up some interesting facts.

  • Half (50) of the 100 largest districts were not eligible to take a reduction in local spending (MOE) because they did not receive a “meets requirement” rating from their state on basic IDEA implementation. Together, these 50 districts educate 675,727 students with disabilities – or 11.5 percent of the nation’s special education students.
  • Of the 50 districts eligible to reduce local spending up to 50 percent of the increase in federal funds they received in 2009:
    • 22 (44 percent) took no reduction;
    • 15 (28 percent) took the full allowable reduction, impacting 241,675 special education students;
    • 13 took reductions ranging from 3 percent to 96 percent of the allowable reduction, impacting 212,753 special education students.
  • The reductions taken totaled $358.2 million (25 percent of total reductions nationwide) and impacted 454,428 special education students. (As we illustrate here, districts that took the full allowable reduction in 2009 end up spending less on special education after 3 years than if they never received the extra funds, since federal funding has not increased in the years following 2009.)


The total reductions taken in the nation’s 100 largest districts are substantially less than what could have been moved out of special education spending if all of the districts had been eligible to use the IDEA provision. The “rating” system – flawed as we feel it is – kept a significant amount of local funds from being moved out of special education, never to be replaced.

However, the new informal guidance released by USED in June 2011 now allows districts – regardless of their implementation of the most basic requirements of IDEA – to unilaterally reduce local spending on special education outside of the allowable conditions in IDEA. The reduction leaves the state dept. of education on the hook to repay the federal government an amount equal to the district’s reduction for the year the reduction was taken. According to USED, the district’s new lower level of spending – despite being arrived at illegally – becomes the new level required for succeeding years.

As we set forth in our Information Alert, this new guidance is a game changer for the ‘maintenance of effort’ precept of the IDEA. As evidenced by our analysis of big districts – half of them are failing to implement the basics of IDEA provisions. Now, the new OSEP guidance lets districts change their MOE by violating it!

More …

MOE reductions in 100 largest school districts

MOE reduction totals by state

MOE reductions in all LEAs in every state

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