NEW YORK Study criticizes funding methods for special education programs

Ohio has a system that creates financial incentives for increased special education enrollments, the report shows.
NEW YORK -- Researchers at a think tank have pointed a finger at flawed state funding systems as a reason why the number of pupils in special education programs has increased by nearly 25 percent since the early 1990s.
"The percentage of students identified as requiring special education has grown alarmingly over the past decade, approaching 13 percent of all elementary and secondary school students," said a release from the Manhattan Institute of Policy Research.
" ... While many ... have called for increased federal subsidies for special education, this study suggests that increases in subsidies should not be undertaken without correcting the way in which special education funding is distributed."
The "Effects of Funding Incentives on Special Education Enrollment" report by researchers at the non-profit center says states with "bounty" funding systems -- that pay school districts for each additional pupil in special education -- have contributed significantly to the growth of such enrollments.
The researchers say such funding creates a financial incentive for districts to increase the identification of pupils with special needs.
Compared systems
The study compared rates of enrollment growth in states with bounty systems with rates in states that have "lump-sum" systems -- where funding does not vary significantly based on the size of a district's special education program.
Ohio has a bounty system, the report says. Pennsylvania has a lump-sum system.
The authors report that about two-thirds of the special education enrollment growth in bounty states in the past decade is due to financial incentives.
The two-thirds represents almost 400,000 additional pupils in special education overall, resulting in more than $2 billion in annual spending, the researchers say.