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An Answer to Connecticut's Special Education Funding Challenges

Dec 13, 2016 - 3 minutes

Every day, Connecticut’s public schools educate more than 74,500 students requiring some type of special education service. The individual learning needs of these students are wide-ranging and unique. Their diagnoses vary from autism to speech and language disabilities to learning and intellectual disabilities. As a result of these wide-ranging needs, the resources required to provide students with a “free appropriate public education” vary significantly, and often pose difficult planning and financial questions to Connecticut’s public schools and municipalities.

Compounding this difficulty is the fact that Connecticut is one of only four states with no system for funding all of its special education students. As a result of these factors, special education costs are unpredictable for Connecticut’s public schools, making it difficult for districts and municipalities to plan budgets that meet the needs of all the students they serve.

In this report, we provide an overview of the challenges Connecticut currently faces in funding special education and detail a new model for equitably distributing state and local funds to support special education. This model, called the Special Education Predictable Cost Cooperative (the Co-op), meets identified best practices for statewide special education finance systems and helps address the challenges Connecticut is currently facing in funding special education services.

The Co-op allows state and local governments to share in the cost of funding special education through a cooperative model that uses actuarial principles to increase stability and predictability in special education funding for school districts while ensuring decisions in service delivery remain local. The Co-op aggregates special education costs together at the state level to leverage the fact that, on a statewide basis, special education costs are predictable, even though they are frequently volatile at the district level. Aggregating these costs together creates greater predictability in special education costs for districts and municipalities.

The Co-op is designed to achieve four primary goals:

  • Protect both general education and special education students by ensuring adequate special education resources remain available when district special education costs exceed projections, all while keeping decisions about, and delivery of, special education services local.
  • Improve predictability for districts and towns by allowing districts to know what their current year special education expenses will be in the prior year, allowing for better budget planning.
  • Increase equity by ensuring towns with greater need receive more state support for special education.
  • Strengthen fiscal transparency for special education expenditures, and assist the State Education Agency (SEA) with demonstrating that it is meeting maintenance of support requirements under the federal Individuals with Disabilities Education Act (IDEA).

As designed, local governments and the State of Connecticut will each make annual contributions to the Co-op, and districts will be reimbursed for 100 percent of their actual special education costs in the current year. Because every district educates special education students, every district will receive some state support for special education, although high-need districts will receive more state aid.

Local governments will contribute to the Co-op by making a Community Contribution for each special education student who lives in their town. To ensure districts have an incentive to manage their special education costs appropriately, Community Contributions will be adjusted to reflect each school district’s actual special education costs in the prior year. Additionally, all communities’ contributions will be lower than their actual special education costs.

Furthermore, the Co-op model has the flexibility to adjust to the changing needs of school districts and the state, with respect to the management and governance of special education, without violating its fundamental principles.

The Co-op’s flexibility and sound actuarial principles, offer a model for a special education finance system that is transparent and financially viable, and meets best practices while making special education costs predictable for school districts across Connecticut.

By creating predictability in special education costs, the Co-op benefits all students, whether they need special education services or not. All students benefit from the Co-op because it stabilizes general education funding and helps ensure districts don’t have to resort to dipping into their general education funding to pay for necessary special education services. Additionally, the predictability and stability created by the Co-op protects students with disabilities by ensuring adequate funding for special education services—even during financially uncertain times—and by keeping decisions and delivery of those services local.

The Co-op offers a solution, based on sound actuarial principles, to the challenges districts and communities across Connecticut face every day by aggregating special education costs together at the state level to ensure predictable, stable funding for special education services—even during financially uncertain times—while keeping decisions and delivery of those services local.

Learn more about the Co-op at


Connecticut School Finance Project. (2016). An Answer to Connecticut's Special Education Funding Challenges. New Haven, CT: Author. Retrieved from


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