SB 1151

This bill increases the amount of funding distributed to school districts as state aid through the equalization formula by $445,949,400 in the 2026-27 school year.

The bill also changes the rate at which the state reimburses school boards, operators of independent charter schools, cooperative educational service agencies (CESAs), and county children with disabilities education boards (CCDEBs) for costs incurred to provide special education and related services to children with disabilities and for school age parents programs (eligible costs). Under current law, the state reimburses the full cost of special education for children in hospitals and convalescent homes for orthopedically disabled children. After those costs are paid, the state reimburses remaining eligible costs from the amount remaining in the appropriation account at a rate that distributes the full amount appropriated. Currently, the Department of Public Instruction provides 1) special education aid to school districts, independent charter schools, CESAs, and CCDEBs; 2) aid to school districts, CESAs, and CCDEBs for providing physical or mental health treatment services to private school and tribal school pupils; and 3) aid for school age parents programs to school districts only. The amount appropriated for special education aid in the biennial budget was estimated to provide a proration rate of 42 percent in fiscal year 2025-26 and 45 percent in fiscal year 2026-27. However, on November 17, 2025, DPI notified school districts and other eligible entities that the interim proration rate for special education payments is 35 percent due to an increase in projected eligible costs during the 2025-27 fiscal biennium. The bill changes the appropriation for special education reimbursement to a sum sufficient and provides that, beginning in the 2025-26 school year, after full payment of hospital and convalescent home costs, the remaining costs are reimbursed at 60 percent of eligible costs.

The bill also excludes any increase in special education reimbursement from the calculation for the annual adjustment in the per pupil payment amounts under the Milwaukee Parental Choice Program, the Racine Parental Choice Program, the statewide parental choice program, and the Special Needs Scholarship Program, the per pupil payment amount to independent charter schools, the transfer amount under the full-time open enrollment program, and the required transfer amount for a child with a disability in a whole grade sharing agreement (collectively “per pupil payments”). Under current law, the annual adjustment for per pupil payments is an amount equal to the sum of any per member revenue limit increase that applies to school districts in that school year and any per member increase in categorical aids, including special education reimbursement, between the current school year and the previous school year. Under this bill, any increase in special education reimbursement between the current school year and the previous school year may not be included in the annual adjustment for per pupil payments, beginning with per pupil payments for the 2026-27 school year.