A Colorado trial court has found pervasive deficiencies in the state's funding
of special education, leading to widening achievement gaps between students
with disabilities and other students. In evaluating the constitutionality of
Colorado's school funding system, pursuant to the Colorado Supreme Court's
2009 remand decision in Lobato v. State, the trial court heard
plaintiffs' and defendants' evidence on many issues, including a thorough review
of six types of "special student populations," including students with disabilities.
Relying on the testimony of: Dr. Margaret McLaughlin, Professor and Associate
Director of the Institute for the Study of Exceptional Children and Youth at
the University of Maryland and a national expert in special education finance
and policy; and, Colorado special education experts Dr. Edward Steinberg, State
Director of Special Education, and educators Lucinda Hundley and Randy Boyer,
court found that the "amount of funding for special education in
Colorado is insufficient" and this funding system is not rational.
Colorado "identifies and serves fewer students with disabilities than almost
any other state in the country" and "ranks 51st among all states plus the District
of Columbia for its financial contribution to special education," the court
concluded. Also, Colorado's underfunding of special education services has
led to "rationing," a practice in which school districts offer only the services
they can afford rather than what students actually need.
Court Findings: Legal Requirements for Special Education Students
The federal Individuals with Disabilities Education Act (IDEA) and Colorado's
special education law, Exceptional Children's Educational Act (ECEA), require
students with disabilities to be provided with a "free and appropriate public
education" (FAPE). In determining whether a student is receiving FAPE, courts
consider not only the program offered to the student but also the student's
educational outcomes; a student must be demonstrating "educational benefit" to
be considered as receiving FAPE.
The education of students with disabilities is further governed by the same
standards that apply to the education of their non-disabled peers. Thus, the
federal No Child Left Behind Act and the Colorado Achievement Plan for Kids
apply to students with disabilities. These laws hold school districts accountable
for the achievement of special education students in areas including post-secondary
and workforce readiness, graduation and dropout rates, and performance on statewide
Court Findings: State Funding of Special Education Services
In 2006, Colorado created a tiered system for state funding of special education.
Under this system, the state provides districts with a specific dollar amount
for each student with a disability (Tier A); a higher dollar amount is specified
for students with eight specific disabilities (Tier B), and there is an additional
pool of funds for certain "high cost" students. The dollar amounts for each
tier were "developed quickly in 2006 based on available funding as opposed
to the actual costs of serving kids with disabilities," the court explained.
The costs of serving students with disabilities have increased over time.
Among the factors contributing to such cost increases are: increased state
and federal legal requirements and associated judicial decisions, increases
in the number of students with autism and other complex and costly disabilities,
and increasing costs of dispute resolution. In spite of the cost increases
since 2006, state funding amounts have remained unchanged, and the state has "never
come close" to fully funding the amount specified for Tier B, the court wrote,
and only 15 percent of Tier B was funded for 2009-10.
Individual school districts in Colorado are responsible for 69% of special
education costs; state funding covers approximately 17%, and federal funding
covers 14%. In a national study, Colorado ranked third from the bottom in terms
of state share of special education funding. The average state share of special
education costs in the United States is 45%.
The court also concluded that "[b]y placing the burden on local districts
to fund the majority of special education costs, Colorado is abdicating its
responsibilities under special education law ... ." Also, at the district level,
funds are being taken from general education programs to fund the special education
services provided in students' Individualized Education Plans, potentially
reducing the quality of services being delivered to general education students.
Moreover, the court noted that in the year 2000, the Colorado Department of
Education contracted with an outside organization to conduct a study of the
special education funding system, as mandated by the legislature. The contractor
identified eight areas of failure in the system, including overall insufficient
funding, and recommended a dramatic increase in the state contribution. The
contractor's recommendations were not implemented, and all eight areas of failure
continue to exist today.
Court Findings: Impacts of Underfunding Special Education Services
Insufficient state funding of special education costs have left Colorado's
school districts unable to "confidently and predictably plan their special
education programs," the court held.
Colorado's State Director of Special Education, Dr. Steinberg, testified about
the lack of quality instruction for special education students. The majority
of special education students are included in general education settings which
are "by and large, not meaningful or effective because general education teachers
are not sufficiently trained in how to meet the needs of students with disabilities
in their classrooms or how to differentiate instruction. They rely primarily
on untrained paraprofessionals to support the students with disabilities in
Absent additional funding, Colorado's notable shortage of special education
teachers and related services providers, which has increased in recent years,
will continue. Under current conditions, school districts are unable to offer
the higher salaries or loan forgiveness programs that might improve retention
of qualified personnel.
Indeed, funding shortages have adversely affected students with significant
health needs, such as juvenile diabetes or severe allergies. In one city, for
example, there are "less than four full-time nurses for 15,500 students, 900
of whom have health care plans." School districts are also unable to implement
research-based interventions shown to be effective for students with disabilities,
as these interventions require costly small group or one-to-one settings.
There is a "huge" achievement gap between students with disabilities and non-disabled
students in Colorado, one which is widening rather than closing, the
court found. In response to the declining math and reading performance of students
with disabilities, Colorado notably lowered its achievement targets for
math and reading proficiency rather than providing more resources for instructional
support and interventions.
In addition to the achievement gaps existing in reading and math, Colorado
students with disabilities are also faring poorly in the areas of graduation
and dropout rates, parental involvement, early childhood transition, and preschool
and post-secondary outcomes. The federal government has found Colorado out
of compliance with IDEA in a number of areas, and the state's failure to address
non-compliance issues has resulted in special conditions being placed on its
Court's Analysis and Holding
The Education Clause of the Colorado Constitution makes the General Assembly
responsible for providing "a thorough and uniform system of free public schools" throughout
As explained by the court, beginning in 1993, the General Assembly began a
series of legislative reforms ultimately resulting in a "pervasive system of
content standards, assessments, school and school district accreditation and
accountability, and teacher effectiveness standards" for Colorado schools.
The elements of this "standards-based education system," according to the court, "constitute
the current legislative specification of the thorough and uniform system of
public education mandated by the Education Clause."
Following the Colorado Supreme Court's 2009 holding in Lobato v. State,
the trial court set out to determine whether Colorado's public school financing
system was "rationally related to accomplishing the mandates of the standards-based
education system." The court found such a rational relationship lacking, as "no
effort has been made" to determine the resources needed to accomplish standards-based
education goals or to institute and fund a system that provides the necessary
When Colorado enacted its Public School Finance Act (PFSA), the court explained,
the statewide base funding amount was determined "by working backwards from
the total funding that [the General Assembly] intended to appropriate," with "no
effort to analyze the relationship to the actual costs to provide an education
of any particular quality." In blunt language, the court noted that "[t]he
PFSA was adopted before the implementation of the standards-based education
system. If only for that reason, it cannot possibly relate to funding the costs
of that system. ... the PSFA funding levels are now and have since inception
been completely disconnected from the real, knowable funding needs of a thorough
and uniform system of public education."
The court further found that Colorado's "irrational and inadequate school
funding system" violates the Local Control Clause of the Colorado Constitution,
which gives local boards of education control of instruction in the public
schools of their respective districts. Without adequate funding, school districts
are prevented from implementing the mandate of standards-based education at
the local level.
Having concluded that "the entire system of public school finance" in Colorado
is unconstitutional, the court directs the state to revise the system to assure
that "adequate, necessary, and sufficient funds are available in a manner rationally
related to accomplish the purposes of the Education Clause and the Local Control
Clause." Recognizing the limitations of its own role, the court specifically
notes that such revisions "are appropriately legislative and executive functions
in the first instance." The decision allows Colorado to keep its current financing
system in effect so as to give the State "a reasonable time" to create and
implement a system of public school finance that meets Constitutional standards.
It remains to be seen how the Colorado General Assembly will respond to the
court order in the area of special education funding. The trial
court decision offers a clear guiding light for education
funding reform in Colorado.