Year of Publication
Martin School of Public Policy and Administration
The recent recession has placed greater hardships on the states in financing special education. The three reasons states struggle to finance special needs students are: the higher per – student cost of special needs students, an increase in the number of students being identified as special needs, and an increased commitment on states and local governments for financing special needs students. One of the ways in which states approach this question is through their use of special education funding formulas. However, research in understanding the effects of state special education funding formulas is lacking.
While research has been conducted examining how special education is financed in the United States, few have looked at the effect state special education finance policies have on special education services. My research question asks what effect a state’s special education funding formula has on the percent of a state’s students enrolled in special education from 2000 - 2009.
Research has examined both how states finance special education and what may influence special education enrollment rates within the states. However, few studies have attempted to control for all of these influences to examine the effect that state special education funding formulas have on the percent of a state’s students enrolled in special education. My study will address that void.
My study looks at a sample of 500 observations of all 50 states over a ten year period between 2000 and 2009. It was constructed using a panel data set in which I included variables that I could use in the analysis to control for characteristics that impact the percent of a state’s special education enrollment. Four multiple linear regression models were estimated using the percent of a state’s special education enrollment as the dependent variable. This variable represents the percentage of special needs children in elementary and secondary school for a particular state and was chosen as the dependent variable because it measures the proportion of students in a particular state that have been enrolled as special needs. Each model examined the effect that different categories of state special education funding formulas had on the dependent variable. Independent variables pertained to both state economic and demographic characteristics, as well as other important variables which impact the percent of a state’s students enrolled in special education.
- If the special education funding formula categories of 1 and 3 are implemented by a state it led to a .45 percent and .94 percent increase respectively in the level of the percent of students enrolled in special education, and if categories 2 and 4 are implemented it led to a .76 percent and .45 percent decrease respectively in the level of the percent of students enrolled in special education.
- A 1 percent increase in the level of the total number of disabled students resulted in, on average, a .65 percent increase in the level of the percent of students enrolled in special education for each funding category.
- A 1 percent increase in the level of a state’s unemployment rate resulted in, on average, a .23 percent decrease in the level of the percent of students enrolled in special education for each funding category.
- A 1 percent increase in the level of the percent of special education students for both Hispanics and Blacks resulted in, on average, a .18 percent and .30 percent increase respectively in the level of the percent of students enrolled in special education for each funding category.
- Government leaders should be cognizant of the impact policies concerning funding formulas have on enrollment rates and continue to research ways to fund state special education services more effectively and efficiently.
- Researchers and government leaders in all levels of government need to define appropriate levels for both the total enrollment of special needs students and level of funding.
- The appropriate level of government for financing special education services needs to be determined.
Tremoulis, Scott, "An Analysis of the Effect a State's Special Education Funding Formula Has on the Percent of a State's Students Enrolled in Special Education From 2000-2009" (2013). MPA/MPP Capstone Projects. 55.