Financing Special Education

Abstract

The best available data indicate that approximately 12% of K-12 public education budgets are allocated to special education and that the cost per student is about 2.3 times the cost of regular education. About 8% of special education funds come from the federal government, 56% from state governments, and the remainder from local school districts. However, the division of fiscal responsibility between state and local sources varies considerably from state to state. Fiscal pressures on special education have increased markedly in recent years as a result of increasing overall school populations, increasing proportions of students found eligible for special education services, and increasing fiscal pressures on schools. At least six states have recently adopted, and the federal Department of Education has recently recommended, special education funding based on census counts of total school populations rather than on the number of students identified for special education services. Proponents of census-based funding foresee greater efficiency of services, while opponents fear a loss of services targeted to individualized needs. An additional proposal is that census-based funding be modified to increase funding to jurisdictions with higher rates of poverty. Criteria for evaluating state special education funding formulas are proposed.