Policy Study

Special Education

Expenditures and Obligations

Executive Summary

To comply with the federal mandate now known as the Individuals with Disabilities Education Act, California implemented the Master Plan for Special Education in 1980. That legislation ushered in a new era of education rights for children with disabilities.

Although Congress and the California legislature created ample provisions to protect and serve children with disabilities, neither included a cost-control provision in the law to protect the schools. In fact, under the law, cost alone cannot be used as a defense for modifying or denying education and support services to a student with a disability. This has contributed to growth in special-education spending. In Los Angeles, for example, inflation-adjusted direct-instructional expenditures for special-education grew by 147 percent between 1980-81 and 1991-92. By contrast, spending for general education increased by 46 percent. After adjustments for enrollment growth, spending for direct instruction increased 47 percent per pupil in special education compared to an increase of 24 percent for nondisabled students in general education.

While special-education spending continues to grow, funding has not kept up, forcing school administrators to “encroach” upon general-education revenues to pay the costs of special education. Over a quarter of all special-education program expenditures in California, on average, are paid from a school district’s general fund. In 1990-91, statewide encroachment was $577 million for special education, beyond the $167 million already contributed from local general funds as mandated by law.

Because most students with disabilities today spend the majority of the school-day in regular classrooms, the actual cost of educating a child with a disability is higher than the program costs alone would imply. Taking total costs into account, the average cost of educating a student with a disability in the Los Angeles Unified School District was approximately $11,500 during 1991-92. For nondisabled students, spending averaged $4,000 per pupil.

The above figures illustrate the need to reexamine special-education spending. Reductions in costs could come about by implementing a reasonableness standard to protect schools from excessive costs, neutralizing adverse financial incentives, and allowing more private-sector participation in special- education service delivery if costs can be lowered or service-quality improved. Greater efficiencies in service delivery could be realized by funding special education on a block-grant basis rather than using the current practice which ties funding to specific uses. In addition, relaxing some staffing requirements, such as the requirement that instructional aides be provided to 80 percent of resource specialists, would enable schools to staff according to local needs rather than state mandates.