Over the past 10 years, Michigan has enrolled more than 22,000 additional students in special-education programs who should not have been classified that way, according to a study from the Manhattan Institute. Those additional students cost local, state and federal government nearly $131 million extra per year.

Drs. Jay P. Greene and Greg Forster argue that the “bounty system” Michigan has in place, which pays school districts for every additional student enrolled in special education, is the reason for the additional cost of the program. Michigan has had such a system in place since 1991.

“In states where schools had a financial incentive to identify more students as disabled and place them in special education, the percentage of all students enrolled in special education grew significantly more rapidly over the past decade,” say the authors. Nationwide, the percentage of students enrolled in special education grew from 10.6 percent to 12.3 percent between 1991 and 2000.

In Michigan alone, the number of children served by the Individuals with Disabilities Education Act (IDEA), the federal special-education law, jumped 27 percent between 1991 and 2000. Currently, more than 12 percent of Michigan youths below age 21 are enrolled in IDEA.

Part of the reason for the special-education population growth in Michigan and nationwide is the placement of children classified as learning disabled on the rolls. In 1976-77, there were fewer than 800,000 IDEA children — those categorized with specific learning disabilities — in the entire country. That number nearly doubled by 1980-81, making it the largest single IDEA category that year.

Over the ensuing 20 years, an increasing number of children have been diagnosed with learning disabilities, until today more than 45 percent of all IDEA students have such a designation.

Some argue that this increase is the product of a greater understanding of what constitutes a learning disability. Others say the label of “learning disability” is simply used as a catch-all category for students who are not performing well in school by the time they reach the mid-elementary grades or higher.

Lisa Snell of the Los Angeles-based Reason Public Policy Institute points out that the label may indeed be overused, because the criteria for determining severe learning disability (SLD) leave a great deal of room for interpretation. She writes, “An SLD diagnosis remains subjective. In addition to the federal standard, there are 50 different state definitions of learning disability.”

Other research has documented this subjectivity. Last year, the President’s Commission on Special Education estimated that as much as 80 percent of students who are classified as having a severe learning disability are there “simply because they haven’t learned how to read.” The National Institute of Child Health and Human Development in 2001 concluded that there is no way to distinguish between a child diagnosed with a severe learning disability from one who simply has low reading achievement.

Andrew J. Coulson, senior fellow in education policy with the Mackinac Center for Public Policy, stated in his book “Market Education: The Unknown History,” “SLD diagnosis is often reduced to a devastatingly simple formula: If a child is smart but cannot read or do math, he is disabled.”

The alternative to the “bounty” approach of funding special education is a “lump-sum” or “block-grant” formula. Under this arrangement, school districts are given special-education funding based on three factors: the size of the overall student population; on prior numbers of disabled students; and on local poverty rates. Sixteen states currently use the lump-sum system.

While the special-education population has grown in both lump-sum and bounty states, the Manhattan Institute study notes that growth has been faster in the bounty states.

Greene and Forster suggest that if all states nationwide had adopted the lump-sum or block-grant approach to funding special education, some 258,000 students might not have been classified as learning disabled — saving them from the negative stigma associated with the classification, as well as saving governments at all levels in excess of $1.5 billion per year. Nationwide, the average cost to school a special-education student is slightly more than double the cost of schooling a typical non-special-education student.

The Manhattan Institute study has not been without its critics. Tom Lombard, assistant commissioner for special education at the Minnesota Department of Children, Families and Learning, dismissed the study’s findings, characterizing them as “baloney” in remarks to the St. Paul Pioneer Press. He asked why schools would raise special-education expenses just to get reimbursed for them. “Our funding systems are not creating overplacement,” he said. Minnesota uses the “bounty” approach to determine the amount of federal special-education money the state receives.

Richard Robison, executive director of the Boston-based Federation for Children with Special Needs, another critic of the study, told The Washington Times, “It’s hard for me to believe that there’s a lot of truth to that,” referring to the idea that the bounty system creates incentives to classify children as needing special-education. “It’s been a chronic complaint, but the federal criteria for enrollment is stringent, very specific, so it’s difficult for me to believe that.”