Placing Children in Special Education A Strategy for Equity (1982) / Chapter Skim
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Some Potential Incentives of Special Education Funding Practices
Some Potential Incentives of Special Education Funding Practices
Pages 300-321
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From page 300... ...
began to provide financial aid for those services to encourage the efforts of local jurisdictions to educate handicapped children. State and federal financial aid for special education constitutes a substantial portion of local budgets for special education.
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Fiscal incentives and constraints may arise from state and federal funding formulas and policies, state and local perceptions of funding and regulations, the interaction of federal policies with state and local programs and priorities, and the combined use of special education programs for the handicapped and other special-needs programs. In addition, the particular conditions that face a given school district e.g., the relative geographic isolation or population density of the area, the wealth of the tax base of the area, the number of children served, and the availability of resources for handicapped children outside the school system- enhance or diminish the district's reaction to a source of funding.
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Individually and as a group they provide funds and policies that can create inducements to expand or reduce the number of children receiving special education and that can affect the structure and quality of special education programs. THE EDUCATION FOR Ace HANDICAPPED CHILDREN ACT The Education for All Handicapped Children Act (P.L.
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1411(a) ~1~.2 For fiscal 1980 the federal contribution to special education was allocated among the states based on a count of 3,709,639 handicapped children served by special education programs.
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are distinct from the reason for which individual children are selected to participate in the program, i.e., to provide compensatory education services to children who are educationally deprived. The other Title I programs have similar funding formulas, although the criteria used for counting children and the ways in which they are counted vary slightly.
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2721~. THE BILINGUAL EDUCATION ACT Through the Bilingual Education Act the federal government provides funds to local school districts and state departments of education for the operation of bilingual programs to assist children of limited proficiency in speaking and writing English (20 U.S.C.
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For example, school districts eligible for assistance under the Emergency School Aid Act are also entitled to a proportional amount of a second category of aid under the Bilingual Education Act. These grants are made to fund projects designed to meet the "special educational needs of minority group children who are from environments in which the dominant language is other than English" to develop language and cultural skills (20 U.S.C.
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In particular, the role of a state in financing special education programs for handicapped children affects the number and type of services available to such children. Complex layers of fiscal incentives and disincentives may affect state and federal policy objectives.
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However, within the separate contexts of the legal, political, social, and educational factors that affect a state's special education program, the funding formula influences the use of these funds and may also affect future programming. While the incentives and disincentives of various funding mechanisms are best explored within that environment, the basic form and implications of the various funding formulas provide the tools for a more particular investigation.
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From page 309... ...
Under this formula the state assumes full or partial responsibility for the expenditures incurred in educating a handicapped child, above the average costs of a regular education. For the purposes of this analysis, these six types of funding formulas can be further grouped by the characteristic factor on which payment is based.
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IMPLICATIONS OF FUNDING ARRANGEMENTS As noted above, the actual effects of a particular funding formula must be considered with reference to other factors that contribute to the operation of a given special education program. These factors vary considerably among the states and, in combination with each state's funding mechanism, create a spectrum of potential incentives and disincentives.
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From page 311... ...
This problem can be alleviated by manipulating other factors. For example, if the state sets levels of class or unit size relatively low, and if they are to a large degree funded with state or federal money, resourcebased formulas can actually act as inducements to reduce class size so as to provide better services to handicapped children at little cost to the local jurisdiction.
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On one hand, child-based formulas provide a considerable inducement to avoid removing a child entirely from special education programs because that action would result in the loss of a reimbursable entity without reducing by very much the fixed costs of the program. On the other hand, child-based formulas are also cited as providing an incentive to serve children only briefly in the course of a year, or otherwise limiting the services provided to them, to get full reimbursment at a very limited cost.
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The excess-cost formulas should not create any incentives that relate to class size, program content, or placement decisions, since all the expenditures associated with the special education program are reimbursed by the state. Placements outside of special education classes would not be discouraged by either the percentage or excess-cost formulas because the most restrictive placement would not cost the local jurisdiction any more.
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The means for geographic regions and funding formulas were compared statistically on the percentage of students enrolled in EMR programs, an index of racial disproportion in EMR classes, and an index of sex disproportion in EMR classes. The results are summarized in Table 1.3 There is a statistically significant difference among formulas, both in the average size of the EMR program and the average disproportion by race or ethnicity; there is no significant difference in disproportion by sex.
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The funding approach for special education services is one of many factors including geographic region, minority population density, and the relative size of the special education program that varies systematically with the extent of racial disproportion.
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If the level of federal funding is relatively low, resulting in a small per-pupil reimbursement, local jurisdictions probably would not increase the number of children served and would minimize the costs of educating those children identified as needing services, by maximizing class sizes and limiting the extent of the services provided. The straight-sum funding formula itself creates an incentive to local jurisdictions to provide special education programs at least cost as a means of limiting their expenditures.
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94-142 funds can be used by the state essentially as general aid money (Barro, 19781. The federal program may limit the ability of some small school districts to offer special education programs with its requirement that no funds be distributed to districts that are not eligible for at least $7,500 (20 U.S.C.
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In fact, if state funding is relatively high, local jurisdictions should be much more responsive to the incentives produced by the state requirements than they will be to the federal ones (Barro, 1978~. The effect of the federal incentives is also influenced by the interactions of special education programs with other special-needs programs.
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In addition, recent developments, at least at the federal level, suggest that not only will the funds going to special education programs be reduced but also that the method through which those funds reach states and local jurisdictions may be altered. In 1981 the Reagan administration announced that it would attempt to consolidate the federal categorical education programs into two block grants.
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For example, regulations and guidelines that define handicaps, describe programs and services, and limit class sizes act as constraints on the funding formula. Other factors such as the level of funding, the history of special education in the jurisdiction, the relationship of education agencies to other government agencies, the interaction of special education programs and such activities as mental health programs and child welfare services, and the activities of special interests also contribute to the fiscal incentives under which school districts operate.
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From page 321... ...
T 1980 Policy Effects of Special Education Funding Formulas.
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