February, 2023
Lincoln — Nebraska's latest attempt to deal with complex public school funding and property taxation issues has unexpectedly brought about new and welcome discussions about increasing state tax support for schools' special education programs.
Several parties, including the governor, see substantial increases as key to smoothing over other differences in state education aid formulas. The governor has called for the state to pay 80% of local schools' special education costs, as set forth by statute but not funded at that level for decades. Educators and local school board members have endorsed the increases.
The new discussions can benefit from a look back to 1974, when Nebraska enacted a forward-looking statute and made a major funding commitment to the education, at the local level, of children with special needs.
Working in the state Budget Division at the time, I was a close observer of the passage, funding, and implementation of that legislation.
Prior to 1974, children with disabilities were often sent to state residential institutions or hidden from sight, as opposed to their education being a responsibility of local school districts. The federal government had not yet passed the Individuals with Disabilities Education Act (IDEA) of 1975, which guaranteed access to a free appropriate public education in the least restrictive environment to every child with a disability.
Credit for Nebraska's early leadership in focusing on local public schools' responsibility for special education goes mostly to two individuals, as I witnessed it.
Jack Lamphere was director of special education at the Nebraska State Department of Education. He envisioned placing responsibility for special needs children clearly with the local school district for appropriate placement, whether it was a program at the local school or elsewhere, with the state paying 90% of the cost, through the school. The financing was important so that schools did not have an incentive to place children at state institutions rather than serving them locally.
Dale Johnson of the state legislative fiscal office worked closely with Lamphere to refine the concept into legislative language and estimate its substantial costs accurately. He kept both the legislature's Education and Appropriations committees advised of discussions. Senator David Stahmer of Omaha introduced the legislative product as LB 403.
I was brought into the discussions to assess the outlook for the legislation as seen by the executive branch, the support of which would be crucial for passage. Jack Lamphere advised that support from the state Education Commissioner and the State Board of Education would be less than he hoped. Dale Johnson concluded that support from Senator Jerome Warner, chair of the Education Committee, and from Senator Richard Marvel, chair of the Appropriations Committee, would not be forthcoming unless Governor J. James Exon made the first move to give it his endorsement.
I thought highly of Lamphere and Johnson and the work they had done. Their legislation was necessary to give school districts the right incentives to create and expand badly needed special education programs. Although federal IDEA legislation was two years away, I agreed with them that Nebraska could lead the way and be ready if and when federal legislation was enacted.
In early 1974, several of us met with Governor Exon in his corner office at the state capitol to discuss LB 403 and other budget-related issues. My recollection has Norman Otto, Don Leuenberger, Stan Matzke, and John Jacobson also present. I made the presentation on special education and the pros and cons of LB 403. Governor Exon asked for my recommendation. I said that although it had a big price tag, the needs were great and the legislation well-crafted.
There was no dissent in the room. Governor Exon waited momentarily for others to weigh in, then made his decision: "It's the right thing to do." Later that year, LB 403 became law.
The new law's implementation in 1975 was bumpy, to say the least. Jack Lamphere left the Department of Education for a job with the Houston Public Schools in Texas. Francis Colgan, inexperienced in administering state programs, replaced him with his own ideas on how the funding mechanisms should work. With the support of Commissioner Cecil Stanley, who had never involved himself in understanding LB 403 incentives and was soon to retire, Colgan began to distribute LB 403 funds directly to schools as if the money were general state aid, not tied to special education, and directly to residential institutions, such as the state schools for the visually impaired and the deaf, without any effort between local schools and the institutions to draw up individual plans for the children's most appropriate placement.
When the payment vouchers came to the Department of Administrative Services, they were delayed pending a determination by the state attorney general as to their legality. Deputy attorney general Gerald Vitamvas and assistant attorney general Harold Mosher advised DAS that the Colgan vouchers could not be paid until they conformed to the new LB 403 statutory requirement that all the funds were to flow through the local schools in support of individualized education plans, regardless of where the plan was carried out.
Francis Colgan did not back down and started lobbying state senators directly for his distribution scheme, which had the support of school superintendents who were eager to receive state money but did not want to recognize their responsibility for special needs children. He also had support from the leaders of state residential institutions who feared losing their populations to the de-institutionalization movement of the times, of which LB 403 was a part.
I witnessed one Colgan lobbying effort in front of senators in a legislative chamber. He used an onion to explain that children have layers, like onions, and that everyone has special needs if we just uncover enough layers. On that basis, he said he was justified in distributing special education funds as general state aid to schools, no strings attached, because everyone has some kind of limitation. He said the special education money would make up for shortcomings in other state aid appropriations.
Upon learning of the impasse, Governor Exon consulted with Gerald Whelan, newly elected lieutenant governor and recently chairman of the State Board of Education. They offered to come to a meeting of the state board and its new commissioner, Anne Campbell, accompanied by assistant attorney general Harold Mosher, to clarify legal requirements for payment of the vouchers. I also attended the meeting, which took place in Lincoln's old Cengas building, then the education department's headquarters. It was a bad start for the new commissioner, who had been poorly served by her predecessor, Cecil Stanley, and by Jack Lamphere's replacement, Francis Colgan. The upshot of the meeting was that vouchers would be paid only on the condition that they followed the law, and those who wanted the new money but the old ways of dealing with special needs children were free to make their case to the next legislature to amend the law. The governor made clear that he was pleased with the new law and expected the commissioner to carry it out.
Francis Colgan soon found employment in another state. A few statutory changes were made in subsequent years, but public schools gradually began to accept more responsibility for special needs children, prompted by parents who were enthusiastic about mainstreaming options rather than institutionalization. LB 403 of 1974, overall, has been a huge success.
State special education funding in 2023 has fallen to less than 50%, unfortunately, but this year may be the time for another boost. The lessons of the past suggest that it is money well spent, but that it can get entangled with other agendas if state legislators and officials are not watchful.
State officials must not repeat the mistakes of 1975 by confusing special education funding with other state aid, to the neglect of the population that is to benefit.
