A study was conducted to consider alternative approaches and make specific recommendations for funding Programs on Pupils with Special Educational Needs (PSEN) in New York State. First, the study reviewed various methods for estimating district need including tests and socioeconomic indicators. Second, the effect of the Board of Regents 1979 mandate for remedial education for all pupils falling below statewide reference points on selected tests was considered. And third, the need for an accurate determination of cost for PSEN programs was examined. Approaches to funding Special Pupil Needs programs studied included: (1) uniform grants; (2) excess cost formulas based on program budgets; and (3) weighting formulas. Also considered were three additional adjustments to these basic forms of allocation: a concentration adjustment, rewarding districts for successful programs, and secondary school pupil weighting. Specific attention was paid to aid for children with limited English proficiency. (APM)