Time and money are both running out as state education officials try to broker a deal with the U.S. government by the end of the legislative session, at noon Thursday, to prevent the loss of at least $34 million in federal funding for special-education programs.
The pact, which state Public Education Secretary Hanna Skandera said she negotiated with the U.S. Department of Education earlier this month, calls for the state to invest an additional $9 million a year over the next five years — $45 million in all — into its special-education programs in lieu of future federal grant cuts. The state faces the funding cuts as a penalty for failing to invest enough of its own money in the programs in years past.
To make the deal stick, before the session ends, the state Legislature would have to approve the release of the first year’s payment of $9 million from a fund that lawmakers set aside in preparation for a worst-case scenario. But there’s only $16 million left in that contingency fund, as lawmakers have “swept away” some $36 million to help balance the state budget for the coming fiscal year.
Complicating the matter further, details on the agreement remain unclear — lawmakers from both parties say they haven’t seen them — and federal Education Department officials have not confirmed the deal.
“I can’t commit future legislators or future executives to that type of a deal without seeing a formal agreement,” Rep. Jimmie Hall, R-Albuquerque, said Tuesday. He said the dwindling contingency fund means “we have the $9 million for the first year and go a long way toward covering the second year.”
Last week, a spokesman for the U.S. Department of Education said he couldn’t confirm anything about the deal beyond saying, “This matter is pending litigation, and we do not comment on matters pending litigation.” He didn’t respond to a follow-up email queryTuesday.
“I am very frustrated that they [PED] thinks they have solved everything, but the United States Department of Education is not willing to say anything about it,” said state Sen. Mimi Stewart, D-Albuquerque. “That means that the deal is not really done.”
Stewart said Monday that she discovered the deal includes a commitment of an additional $3 million per year from the state to maintain federal funding standards, making it a $60 million investment over five years. But a spokesperson for the state Public Education Department said Tuesday that the agreement would allow the state to pull that $3 million from the extra $9 million investment.
At stake is the potential loss of at least $34 million in future federal funding due to at least two violations of the federal government’s special-education grant requirements. The federal dollars augment state dollars for programs that serve nearly 50,000 special-education students across New Mexico. The U.S. government requires states to contribute a certain amount of their own money to receive the special-education grants, but if a state fails to do that, it may receive decreased federal funding for those services in the future.
Dating back to the end of Gov. Bill Richardson’s administration, the New Mexico Public Education Department did not keep up with those federal funding requirements in fiscal years 2010, 2011 and 2012, falling short by more than $100 million total over the three years.
The U.S. Department of Education did grant New Mexico some flexibility by approving a request for a waiver from the grant requirements for fiscal year 2010. New Mexico maintains that given the financial situation the state is facing, it has the right to reduce its own special-education expenditures.
But in the spring of 2014, federal appeals Judge Richard O’Hair said he did not concur with the state’s reasoning, and last October, former U.S. Education Secretary Arne Duncan affirmed O’Hair’s ruling.
Stewart said she feels the Public Education Department “jumped the gun” on announcing the deal.
“It’s a very messy, ‘what is it?’ contract. I just don’t trust the PED anymore,” she said.
Contact Robert Nott at (505) 986-3021 or [email protected].