Criteria for Effective Special Education Funding Formulas. Policy Abstract

This paper offers criteria for states attempting to develop more effective special education funding formulas. It notes that balancing criteria to meet program objectives is difficult, with a major focus on one criterion often coming at the expense of other criteria. An effective formula should be: understandable, equitable, adequate, predictable, flexible, neutral as regards specific disability identification, reasonable in reporting requirements, fiscally accountable, cost-based, neutral regarding type of educational placement, lead to stabilized costs, accountable for outcomes, connectable to general education funding, and acceptable politically. State fiscal policies that foster least restrictive placement are identified, including: (1) removal of fiscal incentives favoring segregated and separate placements; (2) decisions by states addressing the extent to which they encourage private special education placements; (3) funding systems which allow dollars to follow students as they move to less restrictive placements; (4) support by states of direct training for program interventions which stress integrated service systems; and (5) funding and encouragement by states of intervention systems for all students. The paper points out that the specific provisions underlying educational financing mechanisms may be as important in affecting program provision as the amounts allocated. (DB)