THE RELATIONSHIP BETWEEN SCHOOL DISTRICT WEALTH AND PER PUPIL EXPENDITURES FOR HANDICAPPED CHILDREN (FINANCE, EQUITY)

The purpose of this study was to determine the extent to which the Ohio school funding system is fiscally neutral as it relates to expenditures for handicapped children. The specific inquiries were: (1) What is the relationship between the wealth of a district and the per pupil expenditure for handicapped children? (2) What is the relationship between the wealth of a district and the per pupil excess cost for handicapped children?;The following major conclusions were drawn from the study: (1) For the vast majority of districts the system of state aid equalizes resources over disparities in local wealth. For some very wealthy "outlier" districts, however, wealth and effort are statistically unrelated to state aid. These wealthy districts comprise about 10% of the districts in the state. For this reason it is useful to study these two types of districts separately in order to examine the impact of state aid on school districts more precisely. (2) For most districts fiscal neutrality can be said to exist with respect to the research questions raised in this study. Valuation per pupil, the measure of wealth accounted for in the foundation program, was not systematically related to expenditures per pupil for handicapped students nor to excess cost for handicapped students. For the wealthy outlier districts, however, state aid simply cannot overcome their high wealth capacity. (3) There is a persistent demand effect seen throughout the study related to income and effort. These effects seem to have an impact not just on the absolute cost level of special education, but on the relative level as well. Attention to special education seems to be related, in a somewhat disproportionate way relative to regular education, to changes in measures of demand.;Fiscal data collected on school districts by the Ohio Department of Education were used to examine variables having a bearing on expenditures for handicapped students and the extent to which linear relationships were found to exist. Major cost determinants, teacher salary and class size, were regressed on measures of wealth, demand, and effort. These cost determinants were then included with the other independent variables in regressions using expenditure per pupil for handicapped children as the dependent variable. Finally, the excess expenditure for handicapped children was regressed on measures of wealth, demand, and effort, as well as the difference between average class size for handicapped and non-handicapped classes.