Debunking the myths of special education: as special education continues to be an important issue for state legislatures, it is time to set the record straight.

All American children, regardless of ability, are entitled to a free public education. But some are a lot more expensive to teach than others. Total costs for students with disabilities (ranging from mild to severe) has increased to more than 20 percent of all K-12 spending. That amounts to $77 billion to teach more than 6 million special education students (12 percent of all pupils) during the 19992000 school year. And while the federal government promised to pay for the 'excess' costs of special ed, it has never fulfilled its part.

Increased expenditures are in large part the result of:

* Mission creep: expansions of the definition of "disabilities" and expected services.

* Advances in medical technology: saving more premature babies who require special services later in life.

* The skyrocketing costs of medical services for the severely disabled.

* Unintended consequences of standards-based education reform that make special education a place for underachieving students.

And as special education has grown, so have the misconceptions about it.

"Figuring out special education is like doing an archeological dig because the deeper you go the more you discover," says Utah Representative Kory Holdaway, a special education administrator. "As you dig through the layers, you start to recycle the same issues like efficiency, effectiveness of instruction and measures of student performance. You lose sight of what you're trying to do in the first place."

This complexity allows myths about special education to flourish. But with the Individuals with Disabilities Education Act (IDEA) up for reauthorization in the current Congress, it is time to set the record straight.

Myth #1: Special education was originally a federal initiative.

Many people believe that passage of the federal Education for All Handicapped Children's Act (EHA) of 1975 was the beginning of special education. Not so. About half the states started their own special education systems back in the early 1960s. There were, however, an equal number of states that did not allow disabled students to go to school at all. Studies revealed that up to two-thirds of the nation's disabled children were not receiving an "appropriate education." In response, Congress passed the Elementary and Secondary Education Act (ESEA) in 1965 to give states money for special education.

Two court cases in the early 1970s significantly influenced special education. In Pennsylvania Association of Retarded Children (PARC) vs. Commonwealth of Pennsylvania, a federal district court found in 1971 that every mentally disabled child in the state had the right to a free public education. The following year, in Mills vs. Board of Education of the District of Columbia, a U.S. district court found that a school district cannot exclude any "exceptional" children, even if it does not have the money to provide services.

In response to these cases, Congress amended ESEA in 1974 and required states to provide a "free and appropriate education to all children." This was followed by passage of EHA in 1975, which provided federal funding for special education. However, federal money has never approached what was initially discussed.

Myth #2: The federal government pays 40 percent of special education costs.

Actually, the federal government has never come close to this amount. In the 1999-2000 school year, the federal contribution was only 7.5 percent of total spending for special education students. (If Medicaid funds are included, federal funding covers 12 percent of the total expenditures on special education.)

The original federal legislation was to pay the 'excess' cost of special ed services, then estimated to be 40 percent more than for traditional students. Recent studies put that number at 90 percent. So the federal government has not only never paid close to the 40 percent mark, but that estimate was woefully inaccurate to begin with. The lack of funding is perhaps the most frustrating special education issue facing state legislators today. Most lawmakers see it as a breach of promise. Year after year, NCSL, state and local education organizations, and the National Governors Association lobby for additional federal funding. So far, it has been to no avail.

The federal government, however, views 40 percent as the most special education funding it will provide, not the specific allocation.

"The whole issue of maximum authorization or maximum amount of funding is a copout. If they were providing 35 percent of special education costs, I could swallow it a little bit easier because they would be close. But they have never paid even a third of what they originally talked about providing," says Representative Howard Crawford, chair of the Vermont House Education Committee.

Federal special education funding was $8.5 billion for FY 2003. That would have to increase by more than 150 percent--to $22 billion--to reach the 40 percent mark. During the 106th Congress, the U.S. House passed HR 4045, the IDEA Full Funding Act of 2000. If approved, the bill would have increased annual federal appropriations to 40 percent by 2010. The Senate, however, didn't agree. To date, there has been a lot of talk about funding 40 percent of special education costs, but no action.

Myth #3: The federal government primarily determines who will receive special education services.

Actually, teachers are where the entire special education process begins. They refer students for testing and identification. The federal law established very broad guidelines for referral and eligibility, making teachers and local education agencies primary decision makers on who is classified, The 1991 Individuals with Disabilities Education Act (IDEA) expanded the range of disabilities included in special education. The act's reauthorization in 1997 required:

* Students be placed in the least restrictive environment.

* Free appropriate public education for all children, regardless of the severity of disabilities.

* Appropriate student evaluation.

* New individualized programs for special education students.

* Disabled students to take assessment tests and be counted in the accountability systems.

"The 1997 amendments certainly changed the parameters that teachers and schools operate under, but the actual services that a child receives has far more to do with a student's current teacher than any federal laws," says Nancy Reder of the National Association of State Directors of Special Education (NASDE).

One of the major problems for many people is the perception that teachers and school districts have an incentive to classify students as special ed. These students get extra funding, and in the past they did not have to be tested. However, under the stringent accountability measures of the No Child Left Behind Act where disabled students' test scores will be included in the rankings, schools may still be tempted to place more borderline children in special ed. Especially since the act allows special accommodations for these students, such as extra time to take the test. Getting special accommodations for lower achieving students may be just what a school needs to pull its numbers up to a more acceptable ranking.

But once children are classified as needing special education, they rarely cast off that label. "You don't hear too many stories about kids receiving the services they need and then moving out of special education programs," says Senator Tom Gaffey of Connecticut. "Once they get in, the districts assume they will bear the additional cost forever.

Myth #4: Special education and K-12 are two systems serving separate groups.

Not any more. Nationally, there has been a move to view special education as part of larger education systems.

"Taking special ed kids out of their regular classrooms and putting them in separate pull-out programs, isolated them from the benefits of the traditional classroom," says Nevada Senator Barbara Cegavske. "As we integrate special education services into the broader education system, educating special ed students is more effective and less costly."

The shift from pull-out programs to "mainstreaming" is due in part to the 1997 IDEA rule that required students be placed in the "least restrictive environment." A recent study on special education spending shows that more than 35 percent is used for regular education services as compared to specific instruction.

Some states also are moving toward funding a "single system of education." Historically, states reimbursed districts for special education costs or provided extra funding for special ed students.

Although many states still use these methods, a new system is growing in popularity. The "census-based" approach moves away from providing extra funding for individual students and instead provides extra money to districts based on state averages.

For example, if 13 percent of students in a state are classified as having special needs, the state determines how much extra funding an "average" special education student needs and provides extra funding to the districts based on the 13 percent ratio. "The census-based approach is part of a shift in focus toward the question of what does it take a district to provide education to all students? It begins to dissolve the line between regular and special education," says John Augenblick, an education finance expert based in Denver.

CHANGE THE ONLY CERTAINTY

With the size, complexity and ever changing nature of special education, it is no wonder that misconceptions abound. Change seems to be the only certainty in regard to special education. "It is a very complex federal statute, complicated even further by the layers of case law," says Nancy Reder. What makes special education most difficult, however, are the emotional stakes: "Parents want the best for their children whether gifted or disabled," says Reder, "and that means pushing the system for each and every child."

RELATED ARTICLE: HOW STATES FUND SPECIAL ED

Many states are considering changing how they fund special education. Sixteen already have significantly altered the funding process in the past five years.

There are four major approaches to funding special education, each with strengths and weaknesses. Keep in mind, many states use "hybrid systems" that combine these different kinds of funding formulas.

Pupil Weights

One of the most common ways is to assign a funding weight to the student. If a regular education student represents a normal cost, the weight would be one. In certain cases, there is one additional weight for all special education students (i.e. 1.9). In most instances, however, states give higher weights for different degrees of disability. Weights are based on historical costs. Thus, they attempt to predict the costs associated with educating a child with a particular disability.

Strength--Funding levels are accurate and specific for each special ed student, and school districts are not burdened with the extra costs of providing services.

Weakness--Districts may be tempted to identify more students in need of special education in order to get additional funding.

Flat Grant/Census-Based

Another method is the flat grant or census-based approach. Under this system in some states, funding is distributed as a fixed per pupil dollar amount for each special education student (flat grant). In other states, districts receive a lump sum for special education services based on statewide averages (census-based). It is worth noting that federal IDEA funding is distributed as a per dollar amount for each student who gets special educational services.

Strength--This system is simple to administer and helps contain costs. In addition, there is no incentive to classify students as special education.

Weakness--All costs may not be covered. School districts with severe cases will have extra expenses. And some districts could have more than the average number of special education students.

Percent Reimbursement 

Districts are reimbursed for a certain percentage of allowable special education costs. In some cases, the state pays for all allowable expenses. In others, the state pays for only a portion of the allowable expenditures. Approved costs will vary as well, altering the total percentage of special education money that a given state pays.

Strength--Local districts are not burdened with excessive costs.

Weakness--This system does not promote any type of efficiencies and may, in fact, promote inefficiencies. For example, if a district knew it would be reimbursed 90 percent of all costs by the state, it might not look for ways to save money.

Resource-Based

This approach pays for specific resources, such as teachers or classroom units. Student to staff ratios are often determined by the level of student disability. Resource-based funding systems often provide specific guidelines for the types of resources funded, such as teachers, aides or equipment.

Strength--Ensures a specific level of resources.

Weakness--sound research on the appropriate student to teacher ratios is limited. Funding for specific resources may limit local flexibility.

New Policy Option to Consider

One new policy option states are considering distributes sufficient resources so there is no incentive to classify students with specific disorders in order to get more money. Under such a system, services a student needs are identified in an Individual Education Plan (IEP). A panel then rates the services needed on a scale (1-5, 1-10, etc.). Each level of services is assigned a funding amount, which is similar to a weight. However, there are significant differences between this approach and pupil weights. First, special education funding is not tied to specific disabilities and does not classify (and potentially stigmatize) students with specific disorders. Second, there is no incentive for districts to classify a student with a specific disorder and then not spend some of the extra revenue on that student. Identified needs and services must be provided.

Steve Smith heads NCSL's National Center on Education Finance. David Shreve is the education expert in the NCSL Washington, D.C., office.