Friday, April 29, 2011

Special Education Funding in Oregon, A thorny government expenditure?

Though Oregon today is no longer one of the states that need assistance in special education provision, the recent statewide budget cuts are placing it into a difficult situation of funding special education. So what is the state’s funding formula for special education? And what is the biggest concern with the current formula?

Special Education Funding in Oregon: Single Weight Formula
Oregon is a representative state that distributes special education aid to different districts using a “single pupil weight” formula. Under this approach, special education students receive twice the per pupil funding provided for a non-special education student, and each special education student is assigned the same weight regardless of type of disability or education placement.

Two major adjustments are factored into the current formula: the 11 percent identification cap of special students and Funding for High-Cost Students.

Funding formulas in other states
Alternative funding formulas commonly used in other states include multiple weights formula (Arizona), census-based formula (California), resource-based formula (Delaware), variable block grant (Minnesota), and percentage reimbursement (Michigan).

Assessment of the funding formula in Oregon
Adequacy and quality of provision
Studies show that Oregon has lower special education spending per student and a higher ratio of special education students to special education teachers, which demonstrates that the state is below the national average in terms of both the adequacy and quality of special education provision.

Educational setting
However, in terms of special education setting, Oregon performed much better compared to the national average. As shown in Exhibit 2, Oregon's current formula is less likely than the national average to place a student in a more restrictive education setting (out of regular class), which is a clear advantage of the system.

Strengths of Oregon's funding formula
Besides the fact that it is simple and straightforward, the most important strength of Oregon's funding formula is that there are no fiscal incentives to identify students into one category of disability over another or for one form of placement over another.

However, a primary concern is the misalignment between revenue and spending among districts. The overall degree of statewide support for special education spending shows considerable variation in districts across the state of Oregon, which results in great disparities.

Changes to ease the misalignment between revenues and spending are necessary. One possible way is to factor in cost-of-education indices in establishing funding levels for individual districts. Such indices would acknowledge the higher cost of providing education services in certain areas of the state such as urban centers. Also, improved funding formula should be more closely linked with what is actually being provided. Oregon could consider a more cost-based approach to funding special education. This might require incorporating the merits of single weight and other funding formulas such as percent reimbursement, or some form of resource-based provision.

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