ing students with mild and moderate disabilities. Census-based funding assumes that some percentage of the district or school population has disabilities and provides funding on that basis rather than on actual counts; interest in such funding has developed as part of a broader reconsideration of federal and state funding in light of three goals: (1) to maximize flexibility in service deliver; (2) to be "identification neutral"—that is, the number of students identified as eligible for special education is not the only, or primary, basis for generating state special education aid, and students do not have to be labeled "disabled" in order to receive services; and (3) to be needs-generated, so that funding for special education is based on service needs rather than on the type of educational placement or disabling condition (Parrish, 1997).

The 1997 reauthorization of IDEA took a first step toward embracing census-based funding; once the appropriation for part B of IDEA exceeds $4.9 billion, distribution of the additional dollars will not depend on the number of students with disabilities identified and served but will shift to a census basis. Under census-based funding, a state's share of new IDEA money will depend on its total school-age population (weighted 85 percent) and its total school-age population in poverty (weighted 15 percent). The new IDEA also allows more flexibility in the use of special education funds (including allowing benefits to accrue "incidentally" to non-special education students as long as the IEPs are being fulfilled), strengthens provisions to ensure that state funding formulas do not encourage segregated placements, calls for IEPs to relate programming to achievement in the general education curriculum and calls on states to include children with disabilities in statewide assessments and alternative assessments, puts limits on the attorney's fees that parents of special education students can collect, and encourages the use of mediation rather than formal due process hearings to resolve disputes between parents and schools over IEPs.

At least six states (California, Massachusetts, Montana, North Dakota, Pennsylvania, and Vermont) have also adopted some form of census-based funding for their own state special education funds, and several also use some form of poverty adjustment or add "mainstream weights" to pay for the support services that special education students need when served in a general education classroom. Some states (e.g., Florida) are also piloting efforts to relate state aid to student learning characteristics and service needs, rather than placement or disability.

For students with mild and moderate disabilities, we are encouraged by the development of new approaches to special education finance like census-based funding that reinforce the move to accommodate students with disabilities as fully as possible within general education. Moving away from classification and categorization, however, requires that attention be paid to professional development (to prepare teachers to handle students with a diverse array of learning needs in the same classroom), to flexibility for schools in using special education funds, to accountability mechanisms, and to mechanisms for funding students

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