Topic:
SCHOOL FINANCE; SPECIAL EDUCATION;
Location:
EDUCATION - SPECIAL;

OLR Research Report


June 8, 2004

 

2004-R-0470

FEDERAL AND STATE SPECIAL EDUCATION FUNDING

By: Judith Lohman, Chief Analyst

You asked how much federal funding Connecticut receives for special education, who gets it, and if there is any information on future federal special education funding for the state. You also asked for information on the status of the law concerning state payments for high-cost special education placements.

SUMMARY

In FY 2004, Connecticut received an estimated $126.5 million in federal funding for special education. The largest share of this funding, a grant of almost $117 million, supports special education programs and services to children in grades K-12 attending public school. Federal law requires the state to distribute most of the money from this grant to local school districts based on the number of students in each district receiving special education and related services.

Congress is currently in the process of reauthorizing the federal special education law and revising federal funding levels for federal FY 2005, which begins October 1, 2004. Under all the federal proposals (the president's budget and the House and Senate bills), Connecticut would receive more funding in FY 2005 that it did in FY 2004. Final funding levels are still to be determined.

In addition to federal special education funding, the state funds two special education grants. Both reimburse local districts for special education-related costs. One grant pays the full cost of special education for state-placed children who have no identifiable home district. The other, known as the “excess cost” grant, pays any student's special education costs that exceed five times his school district's average per-pupil expenditure for the preceding year. The state was scheduled begin paying all costs exceeding 4.5 times average per-pupil expenditures starting July 1, 2002, but the General Assembly has twice put off the effective date of the change. It is now scheduled to take effect on July 1, 2005.

In addition, because of budget constraints, the state did not fully fund the excess cost grant for FY 2003. Thus, for that year, school districts did not receive full reimbursement for special education costs exceeding five times their average per pupil expenditures.

FEDERAL FUNDING

Funding Levels

The federal government provides three special education grants to states under the Individuals With Disabilities Education Act (IDEA). The largest of the three is called “IDEA Part B.” This grant supports special education programs provided by states and local school districts for children in grades K-12. Two smaller grants support preschool programs (those for children aged 3 to 5 in Connecticut) and programs for infants and families (the so-called Birth-to-Three Program).

Table 1 below shows actual federal funding levels to Connecticut for all three grants for FYs 2001 through 2003 and the estimated levels for FY 2004.

Table 1: Federal Special Education Funding to Connecticut

FYs 2001-2004

Grant

2001

(actual)

2002

(actual)

2003

(actual)

2004 (estimated)

Special Education - Grants to States (IDEA Part B)

$76,114,202

$89,245,788

$103,861,437

$116,976,890

Special Education – Preschool grants

5,009,888

5,009,888

4,980,763

4,983,470

Grants for Infants and Families

4,083,368

4,478,645

4,663,593

4,584,842

Total

$85,207,458

$98,734,321

$113,505,793

$126,545,202

Source: U.S. Department of Education

Distribution

IDEA Part B grants are distributed according to a formula specified by the federal government. Grants are currently determined based on the amounts each state received for FY 1999 and the relative numbers of children in their general populations and in poverty in the age ranges for which they mandate services. Most of the funds must be distributed to local education agencies directly serving children. States may retain part of the money for state-level activities, including administration and support of, and direct services to, children with disabilities.

In FY 2003, the latest year for which final figures are available, Connecticut distributed $72,142,143 in federal grant funds to local school districts (see Table 2, attached). The state allocated almost $2 million of the federal funds to programs for children receiving special education in the state vocational-technical schools and in the school systems run by the departments of Corrections and Children and Families.

Future Federal Funding

When Congress enacted the federal special education law in 1975, it promised to fund 40% of the average per-pupil expenditure for educating children with disabilities (“full funding”). But federal funding has always fallen short of this goal, reaching only 20% in FY 2004.

Congress is currently considering bills to reauthorize the IDEA. The Senate and House have passed differing versions, which must be reconciled in a conference committee. Both versions would authorize significant additional funding for special education. President Bush's proposed budget would also increase special education funding.

A May 25, 2004 issue brief from Federal Funds Information for States (FFIS) summarizes the differences in the House and Senate proposals and estimates IDEA Part B funding for each state under the various proposals (copy enclosed). Table 3 shows Connecticut's estimated FY 2005 funding under each one as well as the state's share in FY 2004 and its share under the president's budget. It also shows how much Connecticut would receive under “full” funding (i.e., at 40% of average per-pupil cost).

Table 3: Connecticut Federal Special Education Funding

FY 2004 Enacted

$116,977,000

FY 2005 - President's Budget

127,743,000

FY 2005 - House

156,669,000

FY 2005 - Senate

142,634,000

FY 2005 – “Full Funding”

240,206,000

Source: Federal Funds Information for States

STATE SPECIAL EDUCATION EXCESS COST GRANT

By law, the state pays the entire cost of providing special education and related services for any student that exceeds five times the school district's average per-pupil expenditure for the preceding year. For example, if a district spent an average of $9,000 to educate each student, it would be responsible for paying the first $45,000 of special education costs for any of its students and the state would pay any costs above that amount (“excess costs”).

In 2001, the General Assembly enacted a law to lower the special education excess cost threshold from five to 4.5 times a district's average per-pupil expenditure for the preceding year. Using the example above, the change would have reduced the local contribution from $45,000 to $40,500 (PA 01-2, June Special Session).

The increase in the state's contribution was to take effect on July 1, 2002. But in 2002, the legislature postponed the effective date to July 1, 2003 (PA 02-7, May 9 Special Session). And in 2003, it (1) put off the increase in the state's excess cost contribution to July 1, 2005 and (2) required a proportional reduction in the state excess cost grant in FYs 2003, 2004, and 2005 if total grants to all towns exceed the amounts appropriated (PA 03-1 and PA 03-6, June 30 Special Session).

The grant cap and funding rescissions reduced state special education excess cost grants by 16.3 % in FY 2003, according to the state Department of Education. Table 2 shows each school district's total special education spending and the state and federal special education grants each received in FY 2003.

Table 2: Special Education Spending and State and Federal Special Education Grants

FY 2002-03

DISTRICT

Total

Special Education

Expenditures

Federal IDEA

Part B Grant

State

Special Education

Grants

Excess Cost

State Placement

Total State

Andover

$653,709

$22,846

$38,428

$0

$38,428

Ansonia

4,376,150

271,000

57,554

240,324

297,878

Ashford

1,369,933

84,348

62,988

28,404

91,392

Avon

4,986,210

312,311

114,640

52,828

167,468

Barkhamsted

662,568

0

48,332

0

48,332

Berlin

5,223,556

388,418

55,475

108,996

164,471

Bethany

831,228

64,934

4,694

0

4,694

Bethel

6,702,372

417,890

181,763

250,550

432,313

Bloomfield

4,915,942

427,957

56,404

258,929

315,333

Bolton

1,795,038

108,372

91,254

105,173

196,427

Bozrah

787,375

48,944

15,000

71,629

86,629

Branford

6,771,929

528,504

194,880

88,555

283,435

Bridgeport

39,766,760

3,836,831

1,467,798

1,939,895

3,407,693

Bristol

14,498,969

1,219,002

385,978

749,353

1,135,331

Brookfield

4,187,930

331,059

169,205

27,080

196,285

Brooklyn

2,191,267

172,503

36,900

186,570

223,470

Canaan

378,234

0

97,362

0

97,362

Canterbury

2,090,153

93,679

29,169

49,990

79,159

Canton

2,468,731

141,350

14,445

40,103

54,548

Chaplin

535,226

0

0

43,869

43,869

Cheshire

9,890,391

556,552

191,507

33,181

224,688

Chester

683,929

0

34,982

0

34,982

Clinton

4,426,974

298,904

29,840

143,722

173,562

Colchester

5,771,854

355,285

307,327

152,284

459,611

Colebrook

209,271

0

0

0

0

Columbia

1,462,687

108,969

72,129

12,406

84,535

Cornwall

268,247

0

0

0

0

Coventry

3,332,849

244,265

83,109

153,566

236,675

Cromwell

2,837,329

160,000

69,325

86,394

155,719

Danbury

15,687,555

1,283,885

206,104

403,669

609,773

Darien

9,096,973

250,000

933,311

33,710

967,021

Deep River

1,003,320

0

59,245

0

59,245

Derby

3,286,189

230,744

190,151

144,794

334,945

Eastford

702,474

42,071

27,713

0

27,713

-Continued-

DISTRICT

Total

Special Education

Expenditures

Federal IDEA

Part B Grant

State

Special Education

Grants

Excess Cost

State Placement

Total State

East Granby

1,743,496

0

91,497

22,046

113,543

East Haddam

2,766,623

133,523

108,970

138,112

247,082

East Hampton

4,689,130

242,637

110,019

129,292

239,311

East Hartford

14,138,701

999,952

32,002

662,866

694,868

East Haven

6,910,317

370,475

137,755

312,108

449,863

East Lyme

6,012,398

241,560

478,383

9,945

488,328

Easton

1,839,109

84,295

27,247

0

27,247

East Windsor

2,507,734

172,741

200,843

186,118

386,961

Ellington

3,942,109

93,000

56,637

136,562

193,199

Enfield

11,114,156

774,395

308,514

417,509

726,023

Essex

1,235,950

0

26,847

0

26,847

Fairfield

20,929,465

1,290,828

708,677

9,251

717,928

Farmington

5,174,629

461,481

141,427

75,805

217,232

Franklin

532,625

39,797

19,826

19,696

39,522

Glastonbury

11,144,182

673,069

733,138

79,798

812,936

Granby

3,093,276

218,292

7,479

11,532

19,011

Greenwich

28,258,935

861,043

1,389,533

146,749

1,536,282

Griswold

4,539,013

298,549

88,648

226,621

315,269

Groton

13,302,777

863,390

356,089

253,066

609,155

Guilford

7,979,226

369,000

187,236

182,962

370,198

Hamden

17,888,932

612,000

190,291

530,256

720,547

Hampton

1,851,270

0

0

0

0

Hartford

65,930,518

5,461,208

551,935

3,249,124

3,801,059

Hartland

533,871

0

0

17,345

17,345

Hebron

1,565,192

87,271

0

0

0

Kent

575,505

0

43,022

0

43,022

Killingly

5,671,810

333,071

314,613

372,802

687,415

Lebanon

2,110,808

177,558

41,594

18,864

60,458

Ledyard

6,316,857

225,000

238,729

213,354

452,083

Lisbon

1,335,746

86,531

3,448

0

3,448

Litchfield

1,858,810

168,325

44,206

6,655

50,861

Madison

6,071,661

537,149

371,633

36,886

408,519

Manchester

15,959,320

1,064,764

147,659

704,600

852,259

Mansfield

2,967,690

187,212

28,522

26,684

55,206

Marlborough

984,240

103,615

17,644

0

17,644

Meriden

20,141,439

1,283,775

387,193

744,724

1,131,917

Middletown

11,657,661

1,076,000

422,027

293,232

715,259

-Continued-

DISTRICT

Total

Special Education

Expenditures

Federal IDEA

Part B Grant

State

Special Education

Grants

Excess Cost

State Placement

Total State

Milford

13,715,655

1,202,676

89,947

202,784

292,731

Monroe

5,704,005

492,955

40,960

88,573

129,533

Montville

5,833,836

400,000

128,167

141,419

269,586

Naugatuck

9,422,803

770,434

301,241

350,872

652,113

New Britain

28,514,906

2,676,693

305,450

957,529

1,262,979

New Canaan

7,516,142

404,462

444,130

72,271

516,401

New Fairfield

4,739,321

308,358

94,035

52,559

146,594

New Hartford

1,601,947

67,306

87,481

41,970

129,451

New Haven

46,330,756

3,333,611

80,003

2,067,786

2,147,789

Newington

6,461,172

384,776

247,456

103,409

350,865

New London

11,936,753

533,978

142,501

402,407

544,908

New Milford

9,116,680

268,925

511,418

181,812

693,230

Newtown

7,777,677

531,616

616,293

186,664

802,957

Norfolk

350,832

0

9,102

24,021

33,123

North Branford

4,059,227

258,462

138,477

48,809

187,286

North Canaan

512,678

0

0

0

0

North Haven

6,499,761

326,287

220,943

185,841

406,784

North Stonington

1,948,759

105,981

106,484

28,060

134,544

Norwalk

23,462,054

708,159

612,970

401,659

1,014,629

Norwich

13,091,230

736,328

683,147

475,441

1,158,588

Old Saybrook

2,627,090

191,301

79,412

109,981

189,393

Orange

2,337,660

181,512

174,499

0

174,499

Oxford

3,103,651

192,002

205,423

0

205,423

Plainfield

5,777,047

386,438

171,458

209,863

381,321

Plainville

5,345,958

115,000

234,962

488,333

723,295

Plymouth

4,475,290

229,123

212,077

75,056

287,133

Pomfret

1,523,225

97,429

167,078

56,520

223,598

Portland

2,878,669

165,632

77,169

62,165

139,334

Preston

2,315,739

121,509

26,895

31,810

58,705

Putnam

2,750,844

241,816

101,288

139,972

241,260

Redding

2,792,127

109,312

116,586

18,904

135,490

Ridgefield

8,890,825

561,307

417,716

0

417,716

Rocky Hill

4,096,942

305,011

111,263

81,961

193,224

Salem

1,601,285

69,000

87,154

28,489

115,643

Salisbury

624,327

0

0

0

0

Scotland

431,207

0

0

35,624

35,624

-Continued-

DISTRICT

Total

Special Education

Expenditures

Federal IDEA

Part B Grant

State

Special Education

Grants

Excess Cost

State Placement

Total State

Seymour

3,907,413

422,242

51,350

18,144

69,494

Sharon

396,599

0

0

0

0

Shelton

9,172,593

575,798

60,135

111,257

171,392

Sherman

1,035,574

15,750

30,231

0

30,231

Simsbury

8,426,134

451,592

155,296

140,436

295,732

Somers

2,986,185

277,401

250,460

58,785

309,245

Southington

13,457,363

924,406

934,962

270,193

1,205,155

South Windsor

6,763,808

615,614

140,071

173,916

313,987

Sprague

1,384,958

66,926

232,282

41,152

273,434

Stafford

4,293,277

264,019

304,913

179,189

484,102

Stamford

31,915,398

1,750,000

268,796

382,755

651,551

Sterling

1,697,818

70,207

112,324

7,758

120,082

Stonington

43,788,357

322,888

255,144

63,622

318,766

Stratford

13,301,090

925,000

288,900

239,181

528,081

Suffield

3,060,144

294,458

129,892

6,052

135,944

Thomaston

2,113,682

161,946

65,625

40,315

105,940

Thompson

2,217,404

197,196

171,946

109,345

281,291

Tolland

4,263,755

248,019

735,388

26,063

761,451

Torrington

10,373,335

824,288

412,974

745,695

1,158,669

Trumbull

11,373,125

822,780

607,510

94,735

702,245

Union

56,650

7,424

0

0

0

Vernon

8,457,456

694,989

318,015

590,178

908,193

Voluntown

1,157,915

56,184

104,128

0

104,128

Wallingford

15,548,370

826,051

656,867

192,500

849,367

Waterbury

59,369,579

1,843,314

265,940

1,672,276

1,938,216

Waterford

6,672,331

411,300

181,830

123,081

304,911

Watertown

4,319,731

296,684

110,983

59,809

170,792

Westbrook

1,592,278

100,913

0

99,622

99,622

West Hartford

17,019,759

1,320,586

167,821

199,996

367,817

West Haven

15,242,592

1,051,075

238,506

386,139

624,645

Weston

7,094,835

182,062

456,215

0

456,215

Westport

10,964,287

662,233

480,502

72,009

552,511

Wethersfield

7,257,583

606,636

384,319

17,286

401,605

Willington

1,252,750

89,323

0

0

0

Wilton

8,312,221

551,163

719,497

27,866

747,363

Winchester

4,639,378

217,579

95,319

109,098

204,417

Windham

8,741,363

534,000

44,046

292,856

336,902

-Continued-

DISTRICT

Total

Special Education

Expenditures

Federal IDEA

Part B Grant

State

Special Education

Grants

Excess Cost

State Placement

Total State

Windsor

8,535,271

686,806

166,586

323,868

490,454

Windsor Locks

3,901,971

251,537

77,140

55,072

132,212

Wolcott

4,469,544

353,931

235,721

2,188

237,909

Woodbridge

1,907,591

74,081

95,729

0

95,729

Woodstock

2,061,001

195,592

106,103

58,308

164,411

Region # 1

984,015

425,353

60,642

9,267

69,909

Region # 4

2,354,045

130,892

139,770

49,570

189,340

Region # 5

3,549,554

253,761

124,552

0

124,552

Region # 6

2,170,791

113,982

60,343

0

60,343

Region # 7

2,544,269

0

33,072

48,022

81,094

Region # 8

2,835,291

139,905

274,614

105,198

379,812

Region # 9

1,939,672

191,275

31,584

18,066

49,650

Region # 10

4,019,246

167,832

135,242

294,340

429,582

Region # 11

1,208,900

147,340

0

21,609

21,609

Region # 12

2,391,665

143,028

46,802

22,673

69,475

Region # 13

3,919,345

229,740

297,056

49,664

346,720

Region # 14

5,113,687

361,301

209,265

146,820

356,085

Region # 15

8,165,206

556,874

66,549

67,180

133,729

Region # 16

3,853,120

219,000

210,485

12,096

222,581

Region # 17

3,579,694

257,676

84,356

44,757

129,113

Region # 18

4,588,676

142,118

269,297

142,171

411,468

Region # 19

2,434,334

92,489

13,733

130,412

144,145

Vo-Tech Schools

0

1,486,427

0

0

0

Dept. of Corrections

0

258,043

0

0

0

Dept. of Children

& Families

0

218,685

0

0

0

           

TOTAL

$1,128,450,723

$74,105,298

$32,554,308

$30,145,692

$62,700,000

JL:ts