State special education funding in the spotlight with federal support in flux

Parents with the "Learn in My Shoes" campaign including Amanda Sherman and Melanie Grosse stand before the Joint Finance Committee at a public hearing in West Allis. (Photo by Baylor Spears/Wisconsin Examiner)
Wisconsin’s special education reimbursement rate has been a concern for public school advocates for many years, but with districts’ reliance on school referendum requests increasing and federal support in doubt, the state’s reimbursement rate is quickly becoming one of the top issues this budget cycle.
Public school districts currently get about 30% of their special education costs reimbursed by the state. Advocates have called to increase that to at least 60% and as much as 90%, which is the amount that private and charter schools participating in the state’s voucher programs already get.
Tiffany Schanno, a Sheboygan parent, and Melissa Custer, a Grafton parent, have been showing up at state budget hearings and meeting in the Capitol to bring awareness to the experience of families seeking special education services in schools.
“We both have kids with disabilities who are trying to access special education, and we both experienced a lot of obstacles just trying to get our children accessible education, and the thing that we discovered is that it all comes down to funding,” Schanno said in an interview with the Examiner. “There’s only so much as far as resources to go around, so a lot of times families are competing against each other for services.”
The pair put together a display — titled “Learn in My Shoes” — that included letters from families about their children’s experience receiving services and financial strains on schools. They placed the letters in a pair of children’s shoes. Custer said they thought having a visual representation and sharing stories would give lawmakers a “small taste” of the reality.

One letter described how educators and paraprofessionals have helped 12-year-old James “communicate with peers, become more confident and able to share more of who he is in meaningful ways.” James received important supports thanks to a “persistent” parent who said not all parents understand the process or know how to advocate for what their children need.
“Because public school budgets are stretched to the point of hundreds of referendums over the past few years, families don’t ask for what they need because they don’t want to be thought of as burdensome,” the parent wrote. “Our family can find workarounds to an extent, but many others cannot. All children deserve an equal opportunity to a sound public education, and funding that keeps up with cost increases.”
Another parent said her son, who has Prader-Willi Syndrome, requires specialized support to navigate school safely and help with emotional regulation, transitions and physical safety.
“Due to funding shortages, services are stretched thin… ” the parent wrote. “My children — and thousands of others across Wisconsin — deserve a chance to succeed, to feel safe, and to receive the support they need to reach their potential. Please make this a priority.”
Schanno and Custer delivered the shoes and letters to lawmakers.
Schanno said some lawmakers expressed skepticism that additional state money would actually be used for special education. She said that isn’t a “valid argument” since federally mandated special education costs are carefully tracked.
“It’s not like you’re just giving a district a whole bunch of money and trusting them to use it for the right thing,” she said.
“Ultimately, what I took away from our visits… is that we have a long way to go with people understanding more about disability in general … and about the value in educating people who are different than they are,” Schanno said.
Proposals in discussion
Gov. Tony Evers proposed in his state budget that the reimbursement rate be raised to 60%. Republican lawmakers, including Sen. Howard Marklein (R-Spring Green), have acknowledged education funding as a top concern for the public, and some, including Rep. Patrick Snyder (R-Weston), have said they want to put more money into special education, but it is unclear what Republican lawmakers will support.
As Republican lawmakers seek a deal on tax cuts, WisPolitics reports that spokesperson Britt Cudaback said Evers “expects Republicans to come to the table on investing in education at every level, among other critical priorities, in order to move forward.”
During the last budget cycle, lawmakers increased the special ed reimbursement rate, though Sen. Chris Larson (D-Milwaukee) notes it was a sum-certain rate, meaning there is a finite amount of money available, so the rate of reimbursement is not guaranteed as funds run low. The current reimbursement rate is hovering around 30%.
“School funding is complex” and special education funding is the “baseline that we absolutely should be doing,” Larson said. Special education funding in Wisconsin peaked at 70% in 1973 and at one point was as low as about 24.5% in 2018-19.
Larson supports increasing the rate to 90%. He said he thinks Evers’ 60% proposal is looking at it “from a political standpoint of what he perceives as what he wants to start the negotiations at in the budget with Republicans instead of what’s needed” and also taking into consideration other budget priorities.
“That’s helpful and that would be significant and still double the percentage of what schools are currently getting, and I appreciate that…” Larson said. “I would hope that the governor would say 60% or veto.”
Larson also noted Evers’ budget would change special education reimbursement from sum certain to sum sufficient — so reimbursements at the set rate would be guaranteed.
Larson said he hopes his Republican colleagues support boosting the rate.
“It still baffles me that some people think this is a partisan thing. Schools all over the state need help. The districts that are going to referendum are rural, they’re urban and they’re suburban. There’s nobody who’s special who is dodging this. Everybody is getting screwed over by the state,” Larson said. “I hope that the folks, the Republicans, who hold the narrow majority in the Assembly and in the Senate, would listen to their constituents who are saying, ‘Stop throwing this on us to cover your gap.’”
Special ed reimbursement could relieve referendum pressure
The discussion about school funding, especially for special education, comes as school districts have increasingly come to rely on referendum requests. Public school leaders, advocates and Democratic lawmakers have said increasing the special education reimbursement to at least 60% could help relieve some of that pressure.
Anne Chapman, research director for the Wisconsin Association of School Business Officials Association, said that increasing special education funding by a significant amount would allow school districts to not have to pull as much money from their general funds for the mandated services.
“You would see way fewer referendums, and you would see kids surge with better programs,” Chapman said.
According to the Wisconsin Policy Forum, just this year there were 94 referendum requests across February and April elections with about a third of those representing “retry” efforts. As schools continue to rely on referendum requests to meet costs, Republican and Democratic lawmakers are seeking ways to change the dynamic, though the latter are focused on providing additional state funding, while the former are focused on implementing new restrictions.
Rep. Christian Phelps (D-Eau Claire) said a memo from the Legislative Fiscal Bureau that compares recent referendum requests to the amount of unreimbursed special education costs illustrates the correlation. He said he asked for the memo after noticing a detail about the finances of the Eau Claire School District.
“Eau Claire’s unreimbursed special education dollar amount was equivalent to the amount of money that they were asking for in their referendum just to not go too far into the red in their budget,” Phelps said, adding that he wondered “how widespread is this pattern?”
The 128 school districts that sought operating referendums in 2024, a record-breaking year, had over $488 million in unreimbursed special education costs for the 2022-23 school year, according to the Legislative Reference Bureau. The bureau’s memo also found that about one-fifth of the referendum requests in 2024 were equal to or exceeded special education costs that were unreimbursed by the state in 2022-23.
Some examples include:
- Bangor School District had a recurring referendum request for $900,000 that failed in 2024. Its unreimbursed special education costs were $973,299 in 2022-23.
- Edgerton School District had a $3,500,000 recurring request that passed. Its unreimbursed special education costs were $3,520,303.
- Eau Claire School District had a successful $18,000,000 request. Its unreimbursed special education costs were $17,933,991.
In some cases, a referendum request was for more than the unreimbursed costs, but even those were still close. Hamilton School District passed a $7,600,000 recurring referendum in 2024. The total of its unreimbursed special education costs was $6,128,870.
“Funding special ed fully lifts all boats,” Phelps said. “When we have an underfunded special ed system, we are creating discrimination and disparity against students with disabilities. The services are mandated, so we’re paying for them one way or the other.” He added that right now, property taxpayers are making up for the state’s low reimbursement rate, and school districts are depleting their general funds.
“Who loses when we’re stretching funds like that? Literally, every kid,” Phelps said, adding that funding special education through referendum isn’t effective because it’s also unpredictable.
“When referendums happen, they either pass or fail, so now this district is better off than that district for no reason other than the fact that they both had to ask their voters for a referendum, and so we have disparities… when there is literally a pile of billions of dollars sitting around,” Phelps said, referencing the state’s $4 billion budget surplus.
“It’s a gold mine in state budgeting to find something that you could do that just so clearly lifts all boats,” Phelps added.
While Phelps said 60% is a compromise, he said the request from Evers is significant.
“It was not that long ago, public ed advocates were literally getting laughed out of rooms when they would ask for 60%,” Phelps said. “Now, the pressure is just too big, and you’re not getting laughed at for asking for 60[%] anymore.”
Derek Gottlieb, an associate professor at the University of Northern Colorado and senior research director for School Perceptions, an education research firm, also said the state could pick up more of the cost of special ed than Evers’ proposed 60%.
“Even if the state didn’t touch revenue limits, even if the state continued to fail to raise just revenue limits upward to keep pace with inflation, we would see many, many, many fewer operating referendums if the state just paid 100% of special education expenditures…” Gottlieb said. “It is shameful, frankly, that the state has done less.”
Federal upheaval shadows special ed funding debate
During a virtual public forum in April, Wisconsin Department of Public Instruction leaders said the discussion about federal and state special education funding are connected.
State Superintendent Jill Underly said as reimbursement rates remain low, local communities will continue to take on the cost of the federal- and state-mandated services.
The special education reimbursement rate “is rather low — it’s 29% now, based on last year’s numbers — but the federal government also has a reimbursement rate, and it’s even lower,” Underly said during the session. “What this would indicate is that our schools are still going to provide the services, because that’s what our schools do. It’s just that they’re not going to be reimbursed fully for them, so the burden is going to shift more to the local school districts to compensate the costs.”
The comments come as the future of the federal government’s role in special education is in flux. The Trump administration has pushed to close the U.S. Department of Education, slashing its workforce and seeking to move “special needs” programs to the Department of Health and Human Services.
During the forum, Deputy State Superintendent Thomas McCarthy noted that when it comes to federal funding “special education is one of the things that, by and large, everyone has said, we’re not going to reduce the states now.”
“That is what I know today, ask me next week, it could be on the chopping block,” McCarthy said. Trump’s recent “skinny budget” proposal seeks to cut 15% from the education budget, but says it isn’t cutting funding for special education, though it does propose consolidating several Individuals with Disabilities Education Act (IDEA) grant programs into one.
As the upheaval creates uncertainty, DPI leaders encouraged Wisconsinites to take the opportunity to advocate for more funding.
When the Individuals with Disabilities Education Act became law in 1975, the federal government said it would fund 40% of special education costs, Underly noted. The federal contribution now hovers around 10%.
“When they are arguing that they’re going to make things more efficient at the U.S. Department of Ed or in the federal government… What are they going to do with those savings? This would be a great example. Well, let’s authorize Congress to reimburse up to 40% of special education costs,” Underly said.
“Not only do we need the current level of funding, we need more funding… so be having that conversation with your federal elected officials [and] also be having it with your state elected officials,” Assistant Deputy State Superintendent Sara Knueve said. “We’re in the heat of that conversation about what’s the state’s reimbursement rate and they’re connected.”
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