Agency of Education: special‑education enrollments rise and costs concentrate in high‑need cases

The Agency of Education told the Education Committee on Feb. 5 that Vermont is seeing more students on individualized education programs even as total enrollment declines, and that spending on a small number of high‑need students has driven much of recent cost growth.

“This is a really important report,” Secretary of Education Zoe Saunders said, introducing the statutorily required “current state of special education delivery” report under Act 73. Saunders said the report will guide the agency’s strategic plan and a reorganization intended to strengthen special education delivery across the state.

Agency staff summarized the report’s central findings: the number and share of students with IEPs has risen, a growing subset qualify for extraordinary‑cost placements, and extraordinary costs have accounted for nearly half of special education spending growth over the past six years while comprising roughly 15% of the total current special education budget. Anna Russo, the agency’s technical assistance and professional development manager in the special education division, said tuition and transportation for the most intensive students account for much of that growth.

Committee members asked why transportation costs have increased. Saunders said transportation reflects placements in settings that may not be available locally; when a student must travel to a specialized program, the state or districts incur higher transportation costs, and the agency is looking at program placement and how to position services spatially to reduce travel.

On disability categories, the agency flagged uneven trends. Russo reported that autism as a primary disability category rose by about 33 percentage points between the 2019 and 2025 reporting windows and that other‑health‑impairment rose by roughly 26 points. She noted emotional disturbance’s share has been relatively stable but that Vermont’s rate for that category has been higher than national averages in some years. The agency emphasized that extraordinary‑cost cases are a subset of each category — for example, about 700 students with emotional disturbance are driving extraordinary expenditures out of a larger statewide count of students so categorized.

Committee members pressed for more longitudinal analysis and for clearer comparisons with demographically similar states. The agency said the report uses LEA‑reported data that the state submits to the federal government under the Individuals with Disabilities Education Act (IDEA) and that differences in state evaluation procedures and reporting categories can affect cross‑state comparisons. Agency staff said some rule changes were implemented around 2023 and that there is not yet sufficient post‑rule data to measure the rules’ full effect.

The report also examined the implications of Act 73’s shift from a reimbursement model to a census block grant and noted that the Joint Fiscal Office will contract experts to evaluate alternatives, including a weighted foundation model. Saunders told the committee the agency has commissioned special‑education finance experts to review the advantages and risks of moving to a weighted model and will provide a secondary report during the legislative session to inform policymakers.

Agency staff described implementation priorities that include strengthening the quality of Tier 1 instruction (the general education classroom) and expanding in‑district capacity and professional development so fewer students require distant, high‑cost placements. “We have clarity around the right best practices, and we have clarity around the challenges,” Saunders said, adding that the agency will follow up with deeper analysis on the formula change and maintenance‑of‑effort implications.

Next steps: the agency committed to provide additional longitudinal data and a secondary finance/policy review this legislative session; the Joint Fiscal Office will also commission analysis of weighted‑model options. Committee members requested further detail on how the block grant and formula changes shifted local fiscal burdens.