May 9, 2024

Splitting the Bill: How Do School Finance Systems Support Students With Disabilities?

By Krista Kaput | Jennifer O’Neal Schiess

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Education finance is a critical lever for change in every school across the country — one that can level the playing field or exacerbate long-standing inequities. Nowhere is that tension more prevalent than in funding for students with disabilities. Although Bellwether’s Splitting the Bill series primarily focuses on state-level funding systems, a set of issue briefs about special education funding depart from this focus due to the prominent role federal policy plays in shaping how states and districts fund services for special education students.    

Since 1975, the Individuals with Disabilities Education Act (IDEA) has guaranteed the right of children with disabilities across the country to receive the educational services they require to be successful beginning in infancy and extending to age 21. Nationally, students with disabilities comprise 14.7% of the public school student population, increasing from 13.2% in 2016. Students with disabilities bring many assets to schools and communities and often require specialized support to meet educational goals, particularly in general education settings. 

IDEA significantly shapes state and local education funding choices by linking eligibility for IDEA grants comprising a significant portion of special education funding to meeting detailed programmatic and administrative criteria. It also mandates that states and school districts maintain consistent state and local special education funding levels annually. In 2021, the federal government allocated more than $14 billion for special education, compared with $23.2 billion in state special education funding (of the 34 states with available data).  

Even with this investment, research raises questions about the adequacy and equity of special education funding. For example, from fiscal years 2016 to 2022, IDEA funding rose by 

$1.7 billion in nominal terms, increasing funding by $78 per pupil. However, after adjusting for inflation, the trend reverses, with total IDEA funding decreasing by $670 million in real dollars — a $274 per-pupil decline. During this same period, the number of students with disabilities rose by more than 580,000 students. With the growing number of students identified for special education services, this decline in overall and per-pupil funding in constant dollars underscores the need for more equitable and adequate funding to support their diverse needs effectively.  

Before policymakers, advocates, and other education leaders can reform education finance systems in their states, it’s critical that they understand the nuances of state and federal special education funding. The following set of three issue briefs provide a crash course in the ins and outs of how finance systems support these student populations. 

  • How Do School Finance Systems Support Students With Disabilities?    
  • What Are the Major Policy and Funding Components of the Individuals With Disabilities Education Act (IDEA)?   
  • What Are the Core Funding Components of Part B, Grants to States (Section 611) Funding in the Individuals With Disabilities Education Act (IDEA)?  

 To supplement these issue briefs, a Bellwether Special Education Finance Equity Interactive Tool allows users to examine federal and state special education revenue (total revenue and per-pupil revenue) and special education student enrollment trends over time in their state and nationally.  The tool provides tailored information for state stakeholders to support their work to safeguard and strengthen special education funding equity.   

 With a deeper understanding of state and federal special education funding mechanisms, stakeholders can better understand the current state of special education funding in their state and work toward meaningful policy change that ensures every student receives the necessary support they’re entitled to.  

 For more on Bellwether’s state education finance work, click here, and check out the Splitting the Bill series in its entirety here. 

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