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Funding Sources

How Are Funds Generated?

Special Education funding can be confusing. Money comes from different places (local, state and federal). Different formulas with data from different years and different sources generate the money. Different rules govern how the funds may be spent.

The Basics

  • Money from local property taxes generate the most funds for districts. (Charters do not have taxing authority so do not have these dollars.)
  • Money from the state provides the next largest level of funding.
  • State funds are separated into Regular Program and smaller ‘pots’ of money for Special Programs such as special education, career and technology, gifted and talented, and others.
  • Money from the State Regular Program covers costs for ALL students including students with disabilities. Your child’s attendance generates funds for this basic program.
  • Money from the State Special Program covers extra costs related to services needed for students with disabilities.
  • Schools must spend local and state money on students with disabilities. The Texas Education Agency (TEA) audits schools and charters to make sure state money has been spent on students with disabilities as required.
  • Schools use federal money to supplement local (if a district) and state money. Federal dollars help pay the extra or excess costs to provide a free, appropriate public education for students with disabilities.
  • Schools often spend more on the special education program than is generated by state and federal dollars. Schools look to local and other funds to cover the total cost of meeting the students’ Individualized Educational Program (IEPs).

Did You Know?

The average per student cost is $7,552 and the average cost per special education student is an additional $9,369 per student, or $16,921. Yet, the federal government is providing local school districts with just under 20 percent of its commitment rather than the 40 percent specified by the law, creating a $10.6 billion shortfall for states and local school districts.

This shortfall creates a burden on local communities and denies full opportunity to all students — with and without disabilities.


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