[A]midst anticipation for increased federal funding for special education, another important consideration has largely been overlooked: The formula used to determine how IDEA funds are allocated to states. IDEA’s funding formula is one of the law’s most critical components. Since the law’s inception, Congress has attempted to allocate IDEA appropriations to states according to each state’s share of children needing special education services.
That said, there are concerns that IDEA’s existing formula falls short of meeting policymakers’ expectations. In our recent work, we evaluated whether IDEA’s existing formula equitably distributes federal funding for special education among states and what will happen if the current formula is used to distribute potential future increases in IDEA appropriations. What we found is concerning.
The existing formula generates substantial differences among states in the amount of federal funding available to pay for a child’s special education services, and these differences have grown over time. For FY2020, the difference in IDEA grant amounts between the states at the top and bottom of the distribution was about $1,442 per child; Wyoming received about $2,826 for each child receiving special education and Nevada received $1,384 per child (see Figure 1). To put this difference in context, for that year federal IDEA funding covered about 23% of the national average additional cost of educating a student with a disability in Wyoming, whereas federal dollars covered about 11% of additional spending in Nevada.