P. O. BOX 2120
February 5, 1999


TO: Division Superintendents
FROM: Paul D. Stapleton
Superintendent of Public Instruction
SUBJECT: Special Education Federal Fundi
Department of Education staff members have been receiving 
a number of inquiries regarding a letter recently mailed 
to local school superintendents from Congressman Bill 
Goodling of Pennsylvania.  In his letter (copy attached) 
Rep. Goodling summarizes certain benefits to states 
included in the reauthorized Individuals with 
Disabilities Education Act (IDEA) from the perspective of 
the U.S. House of Representatives Committee on Education 
and the Workforce.  Based on the questions we have 
received from local superintendents, we believe that some 
of Rep. Goodling's statements are being misinterpreted, 
particularly as they relate to the Commonwealth of 
Virginia.  Therefore, we offer the following information 
to assist you in your budget planning for next year.

1.      IDEA 1413(a)(2)(C) permits an LEA to 1) use 20
percent of its increase in Part B flow-through funds to
supplant state and local special education funds,  and 
2)  reduce by that same amount its level of  special education
expenditures from local funds below the level it spent in the
preceding year. However, all of the program and procedural
requirements prescribed by IDEA must continue to be met in full;
and as has always been the case, all Part B funds may be spent
only for the excess costs of providing special education and
related services. This section of the statute will be in effect
for the Part B funds an LEA receives for the 1999-2000 school
year, and for each subsequent year in which  Congress increases
the appropriation for IDEA.

The practical impact of this provision is that if 
the combined increase in state and federal special 
education funds you receive in any given year does 
fully cover the increase in the cost of meeting the 
special education requirements under IDEA, you will 
not be able to reduce your local effort, and therefore
will not benefit from the flexibility afforded by this
change in the statute.

2.      IDEA 1411(f)(1)(B) restricts the maximum amount
an SEA may set aside for administration and other state-level
activities to the maximum amount it could have set aside in 
1997-98, increased cumulatively each year by an amount no 
higher than the rate of inflation.  Rep. Goodling states in 
his letter that:

 "[sic] 90-98% of increases in appropriations will go  to
schools. If enacted in 1996-97, this provision  alone would have
meant an additional $175 million [sic]  would have been
guaranteed to local schools"

This statement may be valid for states that withheld the 
maximum allowable set-aside (25 percent) in 1997-98.  
However, in Virginia, we have annually set aside less than 
the maximum (ranging over the past 19 years between 8 and 11 
percent).  Because Virginia school divisions have always 
received more than the minimum amount of Part B funds 
required under the law, this provision will not 
significantly affect the amount of Part B funds flowing to 
school divisions in the Commonwealth.

3.      For children who are placed by their parents in private 
schools,IDEA 1412(a)(10)(A)(i)(I) now limits the amount an  LEA
must spend on special education and related services to  a
proportionate amount of Federal funds made available  under this
part.  The degree of relief accorded under this  provision
depends upon how much a school division is  currently spending on
such services.  Although a significant  policy change, we do not
believe this provision will provide  school divisions in Virginia
a great deal of financial  relief.  It is important to note that
for children placed in  private schools by school divisions or
other public  agencies, 1412(a)(10)(B) continues to require the
provision  of special education and related services at no cost to

4.      We share Rep. Goodling's enthusiasm over Congress's third
consecutive year of significant increases in federal special
education funding.  Based on preliminary USDOE estimates, we are
advising school divisions to base their 1999-2000 Part B budgets
on $610 per child (December 1, 1998 count of SPED children ages
3-21).  We are encouraged by the efforts of Rep. Goodling and
others in Congress over the past three years to move funding for
IDEA toward the level intended when this important legislation was
first passed 20 years ago.

Questions about this information may be addressed to Mr. John 
Mitchell at or by phone at (804) 225-2704.


Attachment:     A hard copy of this memo and its attach-
                ment will be sent to the superintendent's