Funding Special Education by Capitation: Evidence from State Finance Reforms

This study examined responses to state capitation policies for special education finance between 1991 to 1992 and 2003 to 2004. Capitation refers to distributing funds based on the entire student enrollment. Disability rates tended to fall following capitation reforms, primarily in more subjectively diagnosed categories and more quickly in less severe categories. Capitation was also associated with a rising share of local funding.