Special Education Finance: Past, Present, and Future. Policy Paper Number 8

This monograph offers an overview of historical trends in the funding of special education programs, examines current issues, and considers directions for the future. After an introductory section, a section on historical perspectives notes trends in federal and state funding since 1975. A table shows the current funding formulas used by each state. Section 3 discusses federal fiscal policy issues including: census-based funding, fiscal disincentives for least restrictive placements, the "incidental benefit" rule, blended funding and service provision, and poverty adjustment. Section 4 evaluates various interrelated factors driving future fiscal policy at the state level, including: rising enrollments, rising expenditures, restrictiveness resulting from public aid differentials, and lack of program flexibility at the local level. Tables detail enrollment trends and trends in expenditures per student. Section 5 offers a case study of two key features of Florida's funding system--its system of "mainstreaming weights" to allow funding for students in general education classes, and its Exceptional Student Education Finance Program Model which uses a limited set of cost factors based on the severity of student need and the intensity of support required. The final section considers the future of special education finance, noting expected growth and such trends as reduction of incentives for student identification, increased integration across categorical program areas, greater local discretion and parent involvement, needs-based funding systems, and results-based accountability. (Contains 33 references.) (DB)