Do Funding Systems Create a Perverse Incentive to Place Students in Special Education?

1. Do Funding Systems Create a Perverse Incentive to Place Students in Special Education? LaTanya Catron-Feazell November 12, 2008 Critical Issues In Special Education Dr. Felicia Valdez

2. Key Terminology • Bounty System • Voucher • Lump-Sum • McKay Scholarship Schools • Manhattan Institute for Policy Research

3. House Bill 90 • In 1971, House Bill 90 was adopted by the Legislature. • Bill ensures that all children with disabilities have the opportunity for an appropriate education at public expense guaranteed to them by the Constitution of each state.

4. School Finance Facts School Finance Facts • Average per student spending (2006-07): – National: $ 9,557 – Southeastern States: $8,520 – Virginia: $ 9,785 • Spending varied from $5,551(UT) to $14,675(NJ)

5. Funding Sources for education (2006-07): United States: 47.6% 43.5% 8.9% State Local Federal

6. Constitutional Language • Every state has constitutional language that addresses the state’s responsibility for public education. The most common term used is: “thorough and efficient” (Five states) Ex. “The superintendent of public instruction shall require each school district in the state to insure an appropriate educational opportunity for all children with disabilities between the ages of three and twenty-one.“ “Children with disabilities are those children in school or out of school who are temporarily or permanently retarded in normal educational processes by reason of physical or mental disability, or by reason of emotional maladjustment, or by reason of their disability, and those children who have specific learning and language disabilities resulting from perceptual-motor disabilities, including problems in visual and auditory perception and integration.” Washington State

7. Virginia’s Constitution • "Free public elementary and secondary schools for all children of school age throughout the Commonwealth, and shall seek to ensure that an educational program of high quality is established and continually maintained“ "Standards of quality for the several school divisions shall be determined and prescribed from time to time by the Board of Education, subject to revision only by the General Assembly.“ (Article VIII, Sections 1 & 2)

8. Special Education Finance • State Funding Formulas: • Funding formulas vary considerably in their general orientation as well as in the detailed provisions. • There are five basic types of funding formulas. • In addition, there are multiple types of allocation methods.

9. Funding Formulas: Across the US in 1999-2000 • Pupil weights: 17 states • Flat/Census-based: 10 states • Resource-based: 6 states • Percentage reimbursement: 6 states • Variable block grant: 4 • Combination: 5 states

10. Greene and Forster Report • Manhattan Institute for Policy Manhattan Institute for Policy Research – 12/02 • State funding systems are either “lump sum” or “bounty” • “Bounty” funds are allocated per identified pupil • “Bounty” states identify Special Education students at higher rates demonstrating the incentive to over-identify Special Education students

11. Special Education Finance • Federal IDEA is the major blueprint for special education policy and law • However, implementation and funding come mostly from states and localities. • National averages mask substantial variations in implementation at the state and local level

12. What Would You Do? • Discussion/Debate