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Lansing — Michigan is making up for a $700 million special education shortfall by cutting state aid to other students, a situation that can only be avoided with a new influx of state or federal money, according to a report issued Wednesday.

A special education panel convened by Republican Lt. Gov. Brian Calley drafted the report, which said that without additional money school districts are having to cut education spending $459 per student. This amounts to a 6 percent per-pupil reduction based on this year’s state foundation allowance floor of $7,511.

This redistribution of money is already happening, said Jennifer Smith, director of government relations for the Michigan Association of School Boards.

“Because special education services must be funded regardless of whether there is sufficient state or federal funding to cover the costs in their entirety, the dollars needed to cover the shortfall actually come from the general operating budgets of schools,” the report said.

It’s a point not mentioned in Calley’s statement to the press, which said students receiving special education are not receiving the resources they need. But the study offers “a road map to help us get there,” according to Calley’s office.

The shortfall comes to nearly $11,500 per pupil in special education.

“This means school districts are having to reduce what they spend on all students to cover those services,” Calley spokeswoman Laura Biehl said Wednesday.

Funding for special education comes from millages by intermediate school districts or countywide districts, which can vary wildly depending on the zip code. Money also comes from state revenue and from the federal government through Medicaid and special education grants from the U.S. Department of Education.

There are certain restrictions on the federal funding, although it was originally meant to cover up to a maximum 40 percent of the state’s special education costs, according to the report. It currently covers less than 15 percent of the cost.

“The Special Education Funding Subcommittee has determined that Michigan has an existing system that is both underfunded and under-performing and offers real solutions to this current dilemma in the report sections to follow,” the report said.

The solutions include spending more money on the state’s early intervention program meant to identify which students are struggling academically at an early age so they can receive education tailored to their needs.

The report stressed the importance of early intervention, noting that studies have shown that kids who are identified at kindergarten as having a developmental delay and received help ended up performing academically at or above average.

In Michigan, 78 percent of infants and toddlers in the early childhood intervention program in 2016 “substantially increased their rate of growth in key developmental areas by the time they exited the program,” which is usually at age three, according to the report. But less than three percent of infants and toddlers receive such help, although 13 percent of the state’s K-12 kids receive special education services, the report said.

Among other recommendations in the study are using incentives to encourage “best practices” in special education, funding community-based agencies that offer support and employment training, as well as funding teacher education programs that can help.

“Michigan must improve educational outcomes for all students, including those with disabilities. It is the subcommittee’s collective belief that the additional areas for investment detailed throughout this report will result in improved educational outcomes as well as continued growth in the health and prosperity of the state of Michigan,” the report said.

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