New Iowa House bill keeps AEAs as provider of special ed services

DES MOINES — Iowa’s area education agencies would continue to be the sole provider of special education support to the state’s school districts under a bill House Republicans proposed Wednesday, but the funding structure and provision of other services would change.

The bill comes as an alternative to a proposal by Gov. Kim Reynolds to overhaul the agencies that provide special education and other services to schools in Iowa. House lawmakers last month declined to move Reynolds’ bill forward after hearing from dozens of parents and school administrators, but have now revived the bill but with changes.

The Iowa Senate late Wednesday advanced Reynolds’ original proposal, Senate Study Bill 3073, out of a committee but with an amendment.

“Ongoing conversations about improving special education and reforming the AEA system have been productive and will continue to inform legislation,” Reynolds said in a statement. “From the start, my focus has been on ensuring students with disabilities receive high quality services that help them achieve their potential. I appreciate that we will be able to continue the discussions on how we do that. Our kids deserve better.”

Iowa's nine AEAs, which are governmental agencies separate from the state Department of Education, provide special education to school districts in their boundaries and assist with classroom equipment and media services, professional development and talented and gifted instruction, among other services.

What does the House bill do?

The new House bill, House Study Bill 713, removes a key piece of Reynolds’ proposal that would allow school districts to contract with other parties, like a private company, to provide special education support services to students with disabilities.

Under the House proposal, federal special education funding still would go directly to the AEAs. Beginning in the 2025-26 academic year, funds for special education support coming from state sources would be kept by the school districts rather than flow to the AEAs.

The districts still would have to spend that money with the AEAs for special education services, but could receive those services through any AEA in the state rather than the one in their specific region.

The bill would establish a “fee-for-service” model for media services and education services at the AEAs by the 2025-26 school year, similar to what Reynolds’ bill proposes. Property tax funding for those services would go to the school districts rather than the AEAs, and the districts could contract with the AEAs or another party for those services.

“The AEAs will continue to be required to provide the special education services with our school districts,” Iowa House Speaker Pat Grassley told reporters Wednesday. “That addresses the concerns we have as far as forward planning assurances, making sure that if there's changes with what school districts want to do, there's still school districts in rural Iowa that will have access to the services.”

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Like Reynolds’ bill, the House bill would bring oversight of the AEAs under the state Department of Education, which would happen in the first year.

The bill would move AEA governing boards to an advisory capacity, and require state approval of AEA budgets. The salary for AEA administrators would be capped at the average salary of all superintendents in the district served by the AEA.

The bill calls for establishing a Division of Special Education in the Iowa Department of Education to handle federal and state compliance, which would be staffed with 58 new employees — five at each AEA and 13 in Des Moines.

The House bill also calls for establishing a 10-member task force to study the AEAs, led by the legislative leaders of both parties. The group would assess and make recommendations related to the property owned by the AEAs, the services they provide, the accountability and oversight measures in place, the organizational structure of special education in Iowa and a timeline for staffing modifications at the AEAs.

Grassley said Republicans felt the need to begin making changes while the study is underway in order to move faster on the issue and keep lawmakers engaged as the changes play out.

“The reason why we put this mechanism in place to move it forward is because the results of the legislatively led study can help us address some of the unanswered questions that may exist that come from this,” he said.

House Minority Leader Jennifer Konfrst said Democrats remain skeptical of the bill and do not think any major changes are needed to the AEAs.

“We continue to reject the premise that AEAs needed wholesale change and to be overhauled,” she said. “So we're going to be looking very closely to see what the impact will be on kids and rural communities who need mental health services and special education services.”

What is in the Senate version?

Senate Republicans made some changes to Reynolds' original proposal when they passed it out of committee Wednesday, but largely kept in place the provision that would allow school districts to use their special education dollars outside the AEA.

Districts would begin receiving 90 percent of their state-provided special education funds starting in the 2025-26 school year, while AEAs would retain the other 10 percent. The districts could use that money to provide special education services on their own or with another party, according to a summary read by Sen. Lynn Evans, R-Aurelia, during the meeting.

"This amendment is the result of listening to and working with AEAs and superintendents, while also understanding that this is not the final product, and we will fully expect more changes to be made in a floor amendment," Evans said.

The Senate bill would keep in place property tax streams funding media services and education services. Districts would receive 60 percent of the state funds dedicated to those services starting in the 2024-25 school year. That money could be spent with the AEAs or another party, using the same "fee-for-service" model called for in the House bill.

Similar to Reynolds' proposal, the bill would call for establishing a Division of Special Education in the Department of Education that would be in charge of compliance and oversight for the state. The department would need to work with the AEAs on a plan to transfer employees focused on oversight to the department.

The Senate proposal would allow the Department of Education to set the AEA administrators' salaries, and cap them at no more than 125 percent of the average superintendent salary in the region. The bill would also increase starting teacher salary to $46,251.

Senate Democrats roundly criticized the bill as not significantly different from the original proposal. They said they were worried it would lead to worsened outcomes for students with disabilities.

Sen. Molly Donahue, D-Cedar Rapids, said the bill would disproportionately hurt rural schools if larger schools decide to pull their money out of the AEAs.

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"Our rural communities don't have the same ability to provide these services that our urban cities do," she said. "Which is why the AEAs were put into place in the first place."

Lawmakers call for teacher salary bump

House lawmakers also proposed two other education bills Wednesday, including one that would raise starting teachers' salaries to $50,000 over two years.

Reynolds' AEA bill called for raising the starting teacher pay to $50,000 and setting the minimum pay for teachers with 12 years of experience at $62,000.

House Study Bill 714, which is separate from House Republicans' AEA proposal, would set the starting teacher salary at $47,500 in the upcoming school year, and $50,000 in the 2025-26 year. It would also increase pay for paraeducators and other support staff.

House Republicans also introduced a bill to give a 3 percent increase to state funding for K-12 education for the coming year.