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V <br />local effort component, to a tier system wherein part of the <br />-funding is a foundation (flat grant per pupil) mechanism and <br />the remainer is a wealth equalization formula. One state, <br />which uses an excess cost formula for funding special <br />education, equalizes (based on local wealth) the regular <br />education dollars generated by special education students. <br />Two of the three states' funding formulas weight for <br />handicapping condition. None of the states studied employed <br />"caps" or limits on the number of children who could be <br />identified as handicapped for Funding purposes. While none <br />of the three states in our study funds the academically <br />gifted in the same funding fomula as special education, a, <br />recent study of funding for Gifted and Talented programs <br />found that sixteen, or about one- third, of the states <br />provide funding for Cifted and Talented in their special <br />education funding formulas or in a way "similar to special <br />education." <br />The following recoruaendations emerge from this study of <br />funding exceptional children's programs: <br />1. INCREASE THE ALLOCATION FOR EXCEPTIONAL CHILDREN TO <br />BRING TOTAL EXPENDITURES FOR EXCEPTIONAL PUPILS TO TWO TIMES <br />THE EXPENDITURES FOR NON - EXCEPTIONAL PUPILS. <br />This study found that the level of funding for programs <br />for exceptional children in Narth:Carolina, is well below the <br />national averaae. Whereas national studies show that it <br />costs between 2.0 and Z.2 times as much to provide special <br />