The report discusses issues related to special education financing and proposes nine actions to remedy problems in this area. The commission's members included leaders from professional organizations as well as representatives of federal, state, and local groups responsible for public education. The first six recommendations focus on improved administration and management of special education by state, federal, and local education officials. Among recommendations are: establishment of more flexible and individualized options within the regular education program; clarification of the financial responsibilities for related services mandated by P.L. 94-142, the Education for All Handicapped Children Act (EFAHCA); development of community-based residential programs; reduction of costs related to parent-school conflicts resulting from the implementation of the EFAHCA; the use of discretionary resources to encourage more effective administrative policies and practices at state and local levels; and development of interagency coordination at both state and local levels. Three additional recommendations focus on the need for continued support of the EFAHCA and for increased federal funds for early intervention. (CL)