Rising Costs Prompt Special-Ed Scrutiny

Officials call for caps in overall costs, but parents worry good services may be cut with the bad

A tug of war over scarce education resources is leading to a reassessment of special-education programs for disabled students.

On one side of the budgetary rope are officials from New York to Nebraska, who say that rising enrollments and escalating costs are making it necessary to winnow the special-ed list to the most needy students. On the other side are parents and teachers who say that the rush to reform the system may jeopardize the services that disabled students need to succeed.

The debate centers around a two-decade-old federal law that requires specialized instruction for these students. And while advocates and critics are far from consensus, some states are moving ahead with substantial reforms.

"There is definitely a national rethinking going on about how children with special needs are served," says Thomas Parrish, co-director of the Center for Special Education Finance (CSEF) in Palo Alto, Calif.

Nearly 40 percent of all new education dollars went to special education between 1967 and 1991, according to a recent study by the Economic Policy Institute in Washington. Meanwhile, enrollment in special-ed programs is growing faster than overall enrollment.

Since the average special-education student costs 2.3 times more than a general education student, critics charge that special education is soaking up money needed for regular education programs. More and more school districts are embracing the idea of placing special-ed students in regular classrooms whenever possible, in part for funding reasons.

Across the nation, at least 28 states are working to change their financing formulas for special education, according to CSEF. Sixteen states have implemented major reforms in the last five years.

Under the traditional approach, state and federal funds help cover the added cost of teaching these students in separate classrooms or providing extra help in regular settings.

"If states don't have a way to cap the overall costs, there is an incentive for school districts to identify students as having special needs," says Douglas Biklen, an education professor at Syracuse University in New York. "The question is: How do you finance services without creating an incentive for school districts to label students in order to secure extra funding?"

In New York City, special instruction soaks up a quarter of the entire education budget, with more children being sent into special education each year.

To control costs, Chancellor Rudy Crew wants to give less-needy students help in regular classrooms while emphasizing preventive measures such as expanded prekindergarten programs, counseling, and speech therapy.

What's happening in New York is an example of the reassessment taking place nationwide. "People are beginning to ask if prevention and intervention can take the place of being labeled and educated separately," says Mary Fulton, a policy analyst at the Education Commission of the States in Denver.

Rather than providing funding on a per-child basis, some states are looking toward a census-based approach that gives funds according to total enrollment. "This removes the incentive for school districts to identify students for special education," Mr. Parrish says. Several states have already moved in this direction, including Massachusetts, Pennsylvania, Vermont, and Montana.

Other states want to experiment with capping the growth of state funding for special education. In Nebraska, state appropriations for special education had been increasing twice as fast as funding for general education in recent years. Last year, the legislature capped the growth of state appropriations for special education at 3 percent through 1998.

In New Jersey, the commissioner of education proposes capping special education funding at 10 percent of a district's total enrollment.

Critics say such caps on funding will cause schools to scrimp on services for students who truly need them. "The danger is that these students will not receive the help they need and will simply be dumped back into regular classrooms with little or no assistance," says James Kauffman, a professor of education at the University of Virginia in Charlottesville.

Critics and advocates disagree about the reasons for the rapid rise in special-education students.

"It's a social phenomenon," argues Professor Kauffman. "Increased poverty, abuse, and neglect are variables that make educational disability more common."

That may be true, but identifying upwards of 15 percent of a school district's students as needing special education is "patently ridiculous," says Mr. Biklen. "The need is to come up with ways of funding special services that do not inflate the number of students identified as disabled."

Parents of special-education students are a notoriously vocal group with serious concerns about their children's needs. In several states, parents have filed lawsuits arguing that any changes in special-education financing will reduce services for their children and violate the 1975 federal law mandating a "free, appropriate public education" for disabled students.

Despite the widespread changes and talk of major reform nationwide, Parrish sees no "indication of a massive withdrawal of support for special education. This is really a window of opportunity to think about what we're doing and whether we can do it better," he says.