Texas School Districts Poised to Lose More than $300 Million in Special Education Funding

Thanks to a recent federal administrative decision, Texas school districts are poised to lose more than $300 million in special education funding, as first reported by San Antonio Express-News. 

This development comes at a critical time when districts are grappling with a surge in requests for special education evaluations.

The funding reduction stems from a long-standing dispute with the federal government over the school Medicaid program. However, the sudden decision caught many districts off guard. 

“Had we known this in August or September, we probably would have made the adjustments at that time,” Rene Barajas, deputy superintendent for business and finance at Northside, told San Antonio Express-News. “Our budget is fairly tight. There’s not a lot of wiggle room in there for us to pull back on expenditures.”

Several school districts, including Northside ISD in San Antonio, Dallas ISD, and Cypress-Fairbanks ISD near Houston, are anticipated to face substantial losses, with three districts staring at shortfalls exceeding $10 million each. Houston ISD is also expected to lose nearly $10 million, according to data from the Texas Health and Human Services Commission.

With Texas school districts already spending over $2 billion more on special education than what they receive from the state, the additional funding crunch exacerbates existing challenges. 

The Texas Association of School Boards is urging lawmakers to devise a stopgap solution, emphasizing the urgency of addressing the financial shortfall in the face of districts already operating in a deficit. The broader financial struggles of school districts in Texas, coupled with the state’s reluctance to increase per-student funding since 2019, further compound the predicament.