Federal Funding for Special Education

According to a CSEF 2004[8] report Special education enrollments and expenditures have been growing steadily since the implementation of the IDEA in 1975. It appears that total special education expenditures have been growing faster than general education expenditures, but that this is primarily because the enrollments and identification of special education students has increased faster than the rate of the overall student population. Increasing special education enrollments of children birth through 21 as a percentage of total student enrollments can be attributed to several factors, including rising numbers of at-risk school-age children, and increasing numbers of preschool children, as well as infants and toddlers (0-2) served through IDEA Part C. Special education expenditures have demonstrated steady increases paralleling and likely caused by this steady, uninterrupted growth in enrollments. Based on 1999-2000 data from the national SEEP, the 50 states and the District of Columbia spent approximately $50 billion on special education services alone, and $78.3 billion on all educational services required to educate students with disabilities (including regular education services and other special needs programs such as Title I and English language learners) amounting to $8,080 per special education student.

Part B of IDEA originally authorized Congress to contribute up to 40 percent of the national average per pupil expenditure for each special education student. 20 U.S.C. § 1411(a). Appropriations for special education have failed to implement that original authorization. A number of studies have sought to track the apparent disparity between the federal commitment to special education and the shortfall in funding. A 2003 study by SEEP, now the Center for Special Education Finance, determined that the per pupil expenditures for special education range from a low of $10,558 for students with specific learning disabilities to a high of $20,095 for students with multiple disabilities. According to the SEEP study, expenditures for students with specific learning disabilities were 1.6 times the expenditure for a regular education student, whereas expenditures for students with multiple disabilities were 3.1 times higher. Most states, in turn, have failed to make up the gap in federal funding, and this in turn has created financial pressures on local school districts. This has led to periodic calls for bringing appropriations in line with the original authorization.

During the 1999-2000 school year, the 50 states and the District of Columbia spent approximately $50 billion on special education services, amounting to $8,080 per special education student. The total spending on regular and special education services to students with disabilities amounted to $77.3 billion, or an average of $12,474 per student. An additional one-billion dollars was expended on students with disabilities for other special needs programs (e.g., Title I, English language learners, or gifted and talented students), bringing the per-student amount to $12,639. The total spending to educate students with disabilities, including regular education and special education, represents 21.4% of the $360.6 billion total spending on elementary and secondary education in the United States. The additional expenditure to educate the average student with a disability is estimated to be $5,918 per student. This is the difference between the total expenditure per student eligible for special education services ($12,474) and the total expenditure per regular education student ($6,556). Based on 1999-2000 school-year data, the total expenditure to educate the average student with disabilities is an estimated 1.90 times that expended to educate the typical regular education student with no special needs.

State Funding Systems
According to a CSEF Report on State Special Education Finance Systems , on the average, states provide about 45 percent and local districts about 46 percent of the support for special education programs, with the remaining 9 percent provided through federal IDEA funding. States use a variety of methods of allocating funds to school districts. Under a weighted special education funding system, (used by about 34% of the states), state special education aid is allocated on a per student basis. Under the weighted funding system, the amount of aid provided to local districts is based on the funding “weight” associated with each special education student. Under a flat grant system, (used in only one state) funding is based on a fixed funding amount per student.

Other states provide a flat grant based on the count of all students in a district, rather than on the number of special education students. Advocates for this system argue that it takes away the incentive to over-identify students for special education. However, the range of special education eligible students in various districts is so broad, that the flat grant based system creates significant disparities in the local effort required.

There are other funding systems in use. Under a resource-based system, funding is based on an allocation of specific education resources, such as teachers or classroom units. Resource-based formulas include unit and personnel mechanisms in which distribution of funds is based on payment for specified resources, such as teachers, aides, or equipment. Under a percentage reimbursement system, the amount of state special education aid a district receives is directly based on its expenditures for the program. The variable block grant is used to describe funding approaches in which funding is determined in part by base year allocations, expenditures, and/or enrollment. Many states use separate funding mechanisms to target resources to specific populations or areas of policy concern such as extended school year services or specialized equipment. According to the CSEF report, a growing number of states have a separate funding stream that can be accessed by districts serving exceptionally “high-cost” special education students.

Maintenance of Effort
The purpose of federal special education funding is to maintain or improve the quality of special education services. This purpose would be undercut if additional federal dollars were "supplanted" by merely reducing the level of state or local funding for special education. For this reason, like many other such programs, the federal law and regulations contain accounting guidelines, requiring "maintenance of effort." The statute says that federal funds provided to the local education agency "(i) Shall be used only to pay the excess cost of providing special education and related services to children with disabilities; (ii) Shall be used to supplement State, local and other Federal funds and not to supplant such funds; and (iii) Shall not be used …to reduce the level of expenditures for the education of children with disabilities made by the local education agency from local funds below the level of those expenditures for the preceding fiscal year. 20 USC 1413 Regulations implementing this requirement begin with a test that seeks to assure that funds provided to an local education agency (LEA) under Part B of IDEA may not be used to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds below the level of those expenditures for the preceding fiscal year. Implementing this requirement fairly at the local level requires some exceptions.

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