Funding Type

Funding Type Description

Incentives Created

Flat Grant Fixed amount of funding per student, which can vary by type of student or type of placement Since funding is based on the number of students, there is a strong incentive to identify or label students and assign them to lower-cost placements.
Weighted

Student Each student is assigned a weighted value depending on individual needs. Funding is based on weighted value times the amount of regular education aid. Encourages identification and labeling of students, particularly for those with higher weighted values, while minimizing district expenditures.

Percentage Funding is based on a percentage of program costs up to 100 percent. Little incentive to control costs if 100 percent of program costs are reimbursed by the state. The greater the local share of costs, the more incentive to reduce costs.
Excess

Costs Reimbursement are for costs incurred over and above the cost of regular education. Little incentive to control costs if all excess costs are reimbursed by the state. The greater the local share of costs, the more incentive to reduce costs.

Unit Funding amount is fixed for each classroom with a given number of students. Creates incentive to minimize class size in order to qualify for the maximum number of units.
Personnel Aid is based on personnel costs. May encourage greater employment of personnel.
Resource Cost Funding is based on estimated cost of resources needed for a program. Encourages greater use of services and employment of personnel.

(Source: Summarized from William T. Hartman, State Funding Models for Special Education, Remedial and Special Education, and "Policy Effects of Special Education Funding Formulas", Journal of Education Finance.)