For the past few years, I have been writing, commenting and testifying on issues related to education spending, specifically the high costs to our schools that result from mental health needs of some students. In 2017, I wrote a report to the agencies of Education and Human Services that outlined the impact, in terms of expense and school culture, on one small school in Vermont that I was serving as Special Services director in Washington Northeast SU. That report flagged the presence of 11 students with significant trauma histories, whose presence in school was welcomed but came at an additional cost of $600,000 to meet the mental health needs of these students. I testified on this issue before House Education in January 2018. Later that year, I conducted a wider examination of the impact of mental health costs in the two rural schools I was serving as superintendent, and found, in that one school year (2018-19), we were spending $1.5M on our share of the mental health service costs for the two schools. All of these dollars come from the Education Fund, and are disbursed by the school to pay staffing costs for supporting these students.

When it comes to education spending in Vermont, it is important for readers to appreciate that Vermont operates a complex model for providing mental health services in schools. Many of the school-based mental health services — behavior analysis, behavior intervention and student/family case management — are provided through contractual relationships between the school and its Designated Agency (DA). DAs work under the umbrella of the Vermont Department of Mental Health to provide a wide range of services in communities. In terms of school-based services, there is a symbiotic financial arrangement whereby the DA gets a certain level of funding through Medicaid that is used to offset part of the cost for professional services they provide to schools under a range of contracted service models, and the school pays the difference. In simple terms, the DA draws some money from Medicaid, the school pays the difference, the Education Fund reimburses the school for a portion of its share using its Special Education reimbursement formula, and the local taxpayers absorb the rest. This creates a sort of three-legged stool that pays the cost of school-based mental health services.

Under this model, the DA provides professional, trained staff who are assigned to support certain students in need of mental health services. The funding model underpinning it – the three-legged stool — generally works until one of the funding streams has an issue. In the case of the recent COVID-19 crisis, that is what is happening today with the schools’ share of the expenses for these mental health services provided by the DA.

Since school was first dismissed by the governor in March, we have experienced an obvious and necessary decrease in the level of services provided by our DA to our students. In many cases, we have contracted for services for individual students at a cost that assumed all-day contact during school hours between the student and the DA employee. But with school dismissed, students are at home, and the need to support a student’s access to education, reduced. Since the dismissal on March 18, these students have not been receiving the number of contracted service hours they are entitled to receive under the terms of our contracts with our DA. However, the DA has continued to bill for the full cost of these services, despite everyone clearly understanding the students are not receiving that level of service.

This has become a significant problem for the schools I serve because it is not clear that we will receive the expected reimbursement for these services under the Special Education reimbursement model. Indeed, we have been told by the Agency of Education that we should not be paying for any contracted services we are not receiving, yet the DA that we work with continues to expect full payment for services under the contracts that were in place before the COVID-19 dismissal. Our disagreement over payment has escalated to the level where attorneys are involved, just one more expenditure on our side that we can ill-afford at this time.

My reason for raising this issue publicly is not to throw our DA under the proverbial bus. I’m sure the DA is facing immense financial pressures as they deal with how to pay employees whom they have under contract, employees they, and we, will want to have available when school resumes normal operations. I am raising this issue because it illustrates a fundamental flaw in mental health funding — the reliance on the Education Fund for provision of mental health services in schools. This tapping of the Education Fund continues to strike me as an unwise and inappropriate use of the Fund, two-thirds of which comes from property tax payments in the communities. Our current situation only casts a harsher light on a flawed model.

Schools have been required to maintain full employment and so have the DAs. Our disagreement is, fundamentally, whether the schools are responsible for providing what amounts to 100% of the school’s share of the DA employees’ salaries, even though we have not received the full value for the services in our contracts. One way out of this for my schools and the DA would be a simple promise by the Agency of Education that we will receive the anticipated reimbursement for the contracted service amounts through the Special Education reimbursement model, as if we were receiving the full services in the contract. For reasons too complex to say here, the agency has not been able to make that promise, at least not yet. If the schools are ultimately forced to pay the full amounts in the DA contracts and, in turn, we receive insufficient reimbursement, the unreimbursed portion will fall on the local taxpayers to fund. In such a case, the schools I serve will end the year with significant deficits in our budgets. Those deficits will be added to the other budgeting challenges we are facing as we slide into FY21 with an Education Fund at a phenomenal deficit level (last projection I heard was $166M), the impact of which will be felt in FY21 and beyond.

Some might say this is not the time for the State to look at a different model for funding mental health services in Vermont’s public schools but, if not now when the system is broken, when will we address it? This problem has been brewing for years, as the level of need increases and the costs resulting from this shared funding model — Medicaid + Education Fund + Local share — ratchets up year after year. Each year, as the local share of this cost increases, we struggle to explain why, and while I can tell my taxpayers that the costs are unavoidable and largely paid for by others, each year we face challenges in funding the education portion of our school budgets because the mental health cost-share is going up at a rate that exceeds all other costs in our system, including regular staffing costs and benefits inflation.

This is not a plea to move mental health services out of the schools — they need to be provided for some of our students so they can access the education that we provide. But the current funding model is a perfect example of how the Education Fund has come to be seen as a cash cow for other agencies to access. The model in place has limped along because all of its components were relatively intact. But like the three-legged stool, it has lost its stability now that one of the three legs — the Education Fund — finds itself in uncharted territory. Before COVID-19, I fully expected the weak leg on the stool — local support for mental health services in our schools – would be the first one to break. A continued weakening of the other two legs – Ed Fund + Medicaid – may ultimately further weaken the local share leg, until it finally breaks, for good. School leaders recognize the problem. What we need is the policymakers to see it, too, and take the necessary actions to firm up the financial base for mental health services in schools, as only they have the ability to do.

Mark Tucker, M.A., is Caledonia Central Supervisory Union Superintendent.

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