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Stimulus Spurs Shifts of Special Education Funding

Some districts can use their own money for other budget priorities.

The increase in special education funding driven by the economic-stimulus law is bringing new attention to an unusual provision in the Individuals with Disabilities Education Act: Districts are allowed, in some cases, to cut back on the local funds they use to pay for special education programs when they get more money from the federal government.

The intent of the IDEA provision was to allow districts to scale back gradually on their own spending while using federal money to fill the gap. But when Congress approved the measure in 2004, lawmakers did not anticipate that they would later nearly double funding for special education in a short amount of time.

States are receiving $12.2 billion in IDEA funding over the next two years from the American Recovery and Reinvestment Act to spend on state special education grants, preschool programs, and programs for infants and families. That translates into dramatic increases...