Trying to head off the 11th hour loss of more than $100 million in federal money because it has not spent enough on special education in the past few years, the state could send a whopping $75 million to school districts by July 15.
The states failure to spend enough on special education in the past, according to federal formulas, also means the U.S. Department of Education plans to withhold $36 million from the state each year going forward.
At issue is a Friday ruling by the U.S. Department of Education that South Carolina has failed to spend enough on special education students in the past three years. Reduced tax collections cut the states income during that period and, in turn, the state cut the amount it spends on students with special needs.
Because the state has not spent enough, the federal agency plans to penalize it by withholding $111 million a year in federal money for special education: $75 million because the state did not spend enough in its fiscal year that ends June 30 and $36 million for not spending enough in the fiscal year that ended June 30, 2010.