Colorado Legislative Council Staff

STATE and LOCAL

REVISED FISCAL IMPACT

(replaces fiscal impact dated February 18, 1999)

TITLE:            CONCERNING ESTABLISHMENT OF THE OBLIGATION OF THE STATE FOR FUNDING SPECIAL EDUCATION PROGRAMS FOR CHILDREN WITH DISABILITIES, AND MAKING AN APPROPRIATION IN CONNECTION THEREWITH.

Summary of Legislation

            As amended by the Senate Education Committee, Senate Bill 99-198 amends the Exceptional Children's Educational Act by setting a minimum level of state funding of the costs of special education programs for children with disabilities. For FY 2002-03 and each fiscal year thereafter, the General Assembly is required to appropriate sufficient moneys to cover the cost of 70 percent of special education programs statewide. The bill phases in this requirement by directing that the General Assembly appropriate 40 percent of the statewide special education costs in FY 1999-00; 50 percent in FY 2000-01; and 60 percent in FY 2001-02. These amended percentages are ten percentage points less than the percentages specified in the bill as introduced.

            The additional moneys appropriated for special education programs would be allocated to school districts under a distribution formula currently contained in the Exceptional Children's Educational Act. This formula requires that increased appropriations be distributed to school districts based on each district's number of children with disabilities relative to the total number of children with disabilities statewide.

State Expenditures

            This bill would require a General Fund expenditure increase of $103.3 million in FY 1999-00 and $163.8 million in FY 2000-01. Based on FY 1996-97 data (the most recent data available), direct state appropriations for the Exceptional Children's Educational Act accounted for 19 percent of total expenditures for special education programs statewide. Table 1 shows the estimated appropriations required by the bill from FY 1999-00 through FY 2002-03, the final year of the phase in. The estimated appropriations assume increases in special education expenditures of 8.0 percent per year and continuation of the FY 1998-99 General Fund appropriation level for special education.

Table 1. Increased Appropriations Required by Senate Bill 99-198

            The increased appropriations levels in Table 1 do not take into account the proportion of federal funds provided for children with disabilities or any other state moneys, such as funding for three- and four-year-old children with disabilities provided through the school finance act, that may be provided for special education programs.

School District Impact

            The bill would increase school district revenues by $103.3 million in FY 1999-00 and $163.8 million in FY 2000-01. The increase in revenue for special education programs would reduce the need for other revenue sources to subsidize special education programs, thus increasing the money available to serve regular education students.

State Appropriations

            The fiscal note implies that the FY 1999-00 General Fund appropriation for the Department of Education, Public School Finance, Special Education - Children with Disabilities would increase by $103,316,679.

Departments Contacted

            Education

Omissions and Technical or Mechanical Defects

            The Senate Education committee report amends the bill on page 4, line 7, to reduce the minimum special education reimbursement rate from 80 percent to 70 percent in FY 2002-03. The 80 percent reimbursement rate for FY 2002-03 is also contained on page 2, lines 6 and 14, which were not amended by the committee. This fiscal note assumes that the reimbursement rate for FY 2002-03 is intended to be 70 percent, and the references to 80 percent will be changed.