Removing Incentives for Restrictive Placements. Fiscal Issues in Special Education. CSEF Policy Paper Number 4

This paper examines the relationship between special education fiscal policies and the least restrictive environment (LRE) requirements of the Individuals with Disabilities Education Act (IDEA). It focuses on the need to develop federal and state fiscal policies that achieve a balance between the sometimes competing needs of the LRE and the continuum of services requirements under IDEA. Fiscal incentives for restrictive placements should be removed since they clearly conflict with the IDEA's LRE requirements. Whether the resulting fiscal policies should be as free of any placement incentives as possible, or should actually favor less restrictive placements is a matter for local, state, and federal policymakers to determine. In considering alternative fiscal policies, a conscious effort must be made to consider the placement incentives associated with each alternative and to develop future fiscal provisions with their relationship to program goals clearly in mind. Methods for reducing the number of restrictive placements are offered. The paper focuses on questions such as how to remove fiscal incentives to serve students in more restrictive settings and how to use limited education resources more efficiently to provide better coordination and articulation across educational programs. The paper includes separate discussions of state and federal special education finance reform issues. (Contains 14 references.) (JDD)