When Congress passed the Individuals with Disabilities Education Act (IDEA) in 1975, it committed to funding 40% of the additional cost of special education services. Fifty years later, that promise remains unmet. Instead of consistent federal and state funding, local school districts like Rim of the World Unified School District (ROWUSD) are left to bridge the gap with their own general fund dollars, often at the expense of other educational priorities.
Nationwide, federal IDEA funding hovers around 13% today, far below the 40% originally promised. For Rim, IDEA funding sits at just just 11.03%.
This underfunding translates directly into structural deficits, budget cuts, and tradeoffs that affect all students. In fiscal year 2025–26, Rim is projected to transfer over $5.9 million from its General Fund to cover the shortfall in Special Education funding — a figure which has doubled since 2021–22. The internal transfer is equivalent to over $2,000 per student per year in diverted funding.
For definitions, take a look at the Education Lingo Glossary of Terms.
General Fund Contributions to Special Education (ROWUSD)
| Fiscal Year | Contribution from General Fund | Percentage Increase |
|---|---|---|
| 2021–22 | $2,635,808 | –% |
| 2022–23 | $3,092,437 | 17.32% |
| 2023–24 | $3,990,089 | 29.03% |
| 2024–25 | $5,400,764* | 35.35% |
| 2025–26 | $5,907,279** | 9.38% |
** Projected
These “contributions” are not optional. They are necessary to ensure that students with disabilities receive legally mandated services ranging from speech therapy and occupational therapy to specialized classroom instruction. However, the financial reality is clear: These mandated services are being funded with dollars that could otherwise support general education programs, arts, technology upgrades, or staff salaries, if only IDEA met its promise.
Why Are Contributions Increasing?
1. High Student Needs and Program Expansion
As of June 2025, 16% of Rim students receive Special Education services — that is compared to a statewide average of 14.9% according to the CDE1. Families are drawn to the district’s smaller, quieter learning environments, making Rim a hub for students with high support needs. As demand has increased, Rim has invested in expanding the program to meet the needs, including, but not limited to:
- Addition of SLPs to handle caseloads.
- New Special Education class to open at CHE.
- Staffing increases at MPH, VOE, and LAE, including a new full-time RSP at MPH.
- 46 aides across school sites with additional requests.
Notably, Rim’s elementary schools have the highest rates, indicating that the percentage of students receiving Special Education Services is expected to trend higher in the years to come:
| School | % of Students Receiving Special Education Services |
|---|---|
| LAE | 23% |
| CHE | 20% |
| VOE | 17% |
2. Costly Transportation
Serving students across mountainous terrain means specialized buses, aides, and lengthy routes. In 2023–24, transportation costs exceeded $1.2 million, a large portion of which was related to Special Education. Additionally, Rim has a small number of students it must transport down the hill, thereby increasing transportation costs significantly; in 2025–26, that cost is expected to exceed $325,000.
3. Funding Gaps
While the federal IDEA law promises to help fund Special Education, Rim received only $1,067,919 in IDEA funding for 2025–26, just 11.03% of its actual Special Education costs ($9.68M). The original federal commitment was 40%.
4. Staffing Shortages
There is an ongoing staffing shortage in the special education industry, particularly for Speech-Language Pathologists (SLPs). As with all surrounding districts, Rim has been filling the additional service gaps with contracted services to meet the needs of local students. While this eases the caseload and burden on Rim’s Special Education staff, it comes at a premium cost.
5. Unpredictability of One-Time Dollars that do not Bridge the Gap
One-time funds have helped to keep Special Education costs lower, but these funds are (a) not dependable and (b) do not fill the large funding gap that exists. In 2022, $300,000 in one-time funds helped offset some contributions from the General Fund; in 2023, it was $150,000; $640,000 in 2024; and in 2025, the District anticipates approximately $200,000 in one-time funds to help offset contributions from the General Fund.
Budget Implications
Rim’s total general fund expenditures are projected at $58.1 million for the 2025–26 school year. The Special Education contribution accounts for more than 10% of this budget, and it is the single largest internal transfer in the district’s budget projections.
This is not a new problem. Over the years, the district’s annual contribution to Special Education has steadily increased, driven by a rise in the number and complexity of student needs, higher staffing costs, and limited increases in state reimbursements. According to the 2025–26 Multi-Year Projection, this pattern of deficit spending is unsustainable, with reserves projected to drop to near-zero in the next three years.
Historical and Structural Context
The state of California provides funding through AB 602 and SELPA (Special Education Local Plan Areas), but allocations have not kept pace with actual expenditures. The Governor’s 2025–26 May Revision maintains the current formula with only a minor COLA (Cost of Living Adjustment) of 2.30%, insufficient to meet the double-digit cost increases some districts are experiencing.
With IDEA funding falling far below the 40% originally promised, this shortfall disproportionately affects rural districts like Rim, which often lack the economies of scale that larger districts benefit from.
Local Impact
The consequences of this funding gap are very real. Money diverted to Special Education from the General Fund reduces flexibility to invest in, for example:
- Classroom teacher retention and raises for staff.
- Lower class sizes.
- Student mental health initiatives.
- Extracurricular and enrichment programs.
Despite these pressures, Rim remains committed to serving all students equitably. But doing so without sufficient support creates inequities for staff, students, and our communities.
So What If IDEA Was Actually Funded?
Rim’s total Special Education cost for 2025–26 is projected to be approximately $9.7 million. If IDEA were funded at higher levels, the district’s General Fund contribution would shrink considerably and our budget would begin to balance out.
| IDEA Funding Scenarios | Required General Fund Contribution from Rim | Rim’s Estimated Budget Deficit Reduction |
|---|---|---|
| Current (11.03%) | $5,907,279 | — |
| 25% Funded | $4,555,154 | $1,352,125 |
| 40% Funded | $3,103,127 | $2,804,152 |
| Fully Funded | $0 | $5,907,279 |
How Would This Impact Rim’s Unrestricted Budget?
Rim’s General Fund deficits are driven in large part by required contributions to Special Education. If IDEA funding were strengthened, the budget would stabilize substantially:
| Year | Projected Deficit | 25% Funded | 40% Funded | Fully Funded |
|---|---|---|---|---|
| 2025–26 | -$5.68M | -$4.32M | -$2.87M | +$231K |
| 2026–27 | -$3.62M | -$2.26M | -$813K | +$2.29M |
| 2027–28 | -$2.73M | -$1.38M | +$72K | +$3.18M |
The Bottom Line and What Comes Next
Special Education is a moral and legal obligation. At the same time, this is not an overspending issue. It is a structural injustice and the way it is funded today creates an unsustainable burden on local districts. Rim is absorbing costs that were promised to be paid by the federal government in 1975, 50 years ago. The result is a shifting of resources away from general education and toward mandated Special Education services with no increase in support.
Rim’s own $5.9 million contribution this upcoming year is not a sign of extravagance; it is a reflection of an outdated and broken funding system.
There is an urgent need for both state and federal governments to fulfill their commitments. If IDEA were funded at just 25%, Rim would save over $1.3 million annually. At the full 40%, Rim is no longer deficit spending by the year 2027–28. If IDEA were fully funded? Over $5.9 million would be restored to local classrooms overnight at Rim. If state and federal leaders want to ensure equity in education, they must start by fully funding the services they have mandated by:
- Federally, increasing IDEA funding to even 25% would significantly ease the local burden.
- At the state level, reforms to the AB 602 funding formula, increased COLA for Special Education, and targeted grants for high-cost students could also make a meaningful difference.
Organizations such as the California School Boards Association (CSBA) and School Services of California (SSC) continue to advocate for these changes, but progress has been slow.
In June of 2025, the Rim of the World Unified School District Board of Trustees will discuss, refine, and adopt an advocacy platform to call for reforms that address special education funding shortfalls. These efforts seek to secure the resources our students need and deserve.
IDEA Funding Comparison Methodology Summary
To model the financial impact of increased federal funding for Special Education under IDEA, the following methodology was used. All figures reflect the projected 2025–26 budget from ROWUSD.
Total Cost of Special Education
The total cost of Special Education was calculated as the sum of:
- General Fund contribution to Special Education: $5,907,279 (from unrestricted resources)
- Restricted revenues supporting Special Education: $3,772,898 (includes IDEA and state AB 602 revenue)
Total Cost = $5,907,279 + $3,772,898 = $9,680,177
Isolating IDEA (Federal) Revenue
Federal IDEA funding was isolated from the restricted revenue total. According to proposed 2025–26 budget, Rim may receive:
- IDEA Revenue (Resource Code 3310 and 3320): $1,067,919
Calculated IDEA Share of Total Cost = $1,067,919 ÷ $9,680,177 ≈ 11.03%
Modeling Alternative IDEA Funding Levels
Three (3) alternate IDEA funding levels were modeled:
| Scenario | Federal Share Covered by IDEA | Resulting IDEA Revenue |
|---|---|---|
| Current | 11.03% | $1,067,919 |
| 25% IDEA Funded | 25% | $2,420,044 |
| 40% IDEA Funded | 40% | $3,872,071 |
Holding All Other Revenues Constant
To isolate the impact of IDEA funding changes, state funding (AB 602 and other restricted sources) was held constant at $2,704,979 (i.e. $3,772,898 – $1,067,919).
Calculating New General Fund Contribution Requirements
Using the formula:
Required General Fund (GF) Contribution = Total SPED Cost – (IDEA + State Restricted)
| Scenario | Required General Fund Contribution |
|---|---|
| Current | $5,907,279 |
| 25% IDEA Funded | $4,555,154 |
| 40% IDEA Funded | $3,103,127 |
| Fully Funded | $0 |
Calculating District Savings
Savings were then determined by calculating how much less the district would need to contribute from its Unrestricted General Fund if federal IDEA funding were increased. This isolates the local impact of improved federal cost-sharing.
| Scenario | Savings Compared to Current |
|---|---|
| 25% IDEA | $1,352,125 |
| 40% IDEA | $2,804,152 |
| Fully Funded | $5,907,279 |
Apply Savings to Unrestricted General Fund Deficit
Rim’s Unrestricted General Fund Deficit projections were sourced from the district’s 2025–26 Multi-Year Projection (MYP):
| Year | Current Deficit | Deficit @ 25% IDEA | Deficit @ 40% IDEA | Deficit if Fully Funded |
|---|---|---|---|---|
| 2025–26 | -$5,676,358 | -$4,324,233 | -$2,872,206 | +$230,921 |
| 2026–27 | -$3,617,019 | -$2,264,894 | -$812,867 | +$2,290,260 |
| 2027–28 | -$2,731,865 | -$1,379,740 | +$72,287 | +$3,175,414 |
2025–26 Budget Discussions
This is part of an ongoing series covering the implications of the 2025–26 budget on our local schools in Rim of the World Unified School District. Read more articles in the series now.
- Calculated by taking the total Special Education enrollment in the State of California during the 2024–25 school year and dividing by the total Student Population enrollment in the State of California during the 2024–25 school year. ↩︎