- The Washington Times - Monday, December 16, 2002

The way 33 states and the District pay their school systems for special education is the driving force behind rising program enrollments, a study released by the Manhattan Institute shows.
In a review of U.S. special education programs, the study found that enrollment grew faster in school districts that receive funding based on the number of special education students than those that receive a lump sum for such programs.
“It’s quite striking that the growth in the states where these financial incentives operate is much higher than the growth in the states where they don’t pay in this way,” said Jay Greene, a senior fellow at the New York-based institute and the study’s co-author.
The study covers the period from 1991 to 2001.
As a result, the study concludes, roughly 380,000 students could have been kept out of special education and about $2.3 billion would have been saved by state and federal governments each year if all states practiced lump-sum funding.
Supporters of special education questioned the findings.
“It’s hard for me to believe that there’s a lot of truth to that,” said Richard Robison, executive director of the Boston-based Federation for Children with Special Needs. “It’s been a chronic complaint, but the federal criteria for enrollment is stringent, very specific, so it’s difficult for me to believe that.”
Funding systems that pay per student create a “bounty” on special education students, making it attractive for districts to find students who can be labeled as having disabilities, Mr. Greene said.
The current average per-student cost is $7,320. The average cost per special education student is $16,689.
Lump sums, or block grants, are awarded based on a set percentage of students determined to need the services. That way, districts have no financial incentive to put students into special education programs, Mr. Greene said. This type of funding is used in Maryland and Virginia.
Special education enrollment nationally grew from 10.6 percent of all students in the 1991-1992 school year to 12.3 percent in 2000-2001, the study found.
The total special education enrollment under the bounty funding system rose from 10.6 percent in 1991-1992 to 12.6 percent last school year. The enrollment under the lump-sum funding grew from 10.5 in 1991-1992 to 11.5 percent last year, the study shows.
In the District, special education enrollment increased from 8.1 percent in 1991-1992 to 15.8 percent last academic year, Mr. Greene said. In the 2000-2001 school year, the District had a total of 64,600 students, of which 10,200 were in special education.
Of those 10,200 students, Mr. Greene estimated, 3,200 should not have received special education services. Those students accounted for $19 million in extra funding that year, he said.
The picture was different in Maryland and Virginia.
Special education enrollment in Maryland increased from 11.3 percent in 1991-1992 to 13.4 percent last year. Enrollment in Virginia rose from 11.2 percent in 1991-1992 to 14.6 percent last year.
The study comes at a time when Congress is expected to consider changes to the Individuals with Disabilities in Education Act. IDEA calls for the federal government to fund special education needs at 40 percent, but as of this year, it provides about 15 percent, or $10.5 billion less than the law specifies.

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