This paper presents a fiscal impact analysis of special education funding of inclusion at one of Indiana's pilot test school sites. Preliminary information includes a brief history of education for children with disabilities in the least restrictive environment. Indiana's weighted formula for special education funding is then explained and problems with the current formula process are identified. The inclusion program of the Clark County Schools is described, focusing on the four elementary schools involved in the inclusive site grant. Data are then summarized for the following areas: cost of inclusion compared to cost of traditional programs (average cost is slightly less in the inclusion model); inclusion staff assignments; costs for inclusion compared to traditional programs; administrative costs of inclusion; transportation costs of inclusion; and staff development costs of inclusion. The paper recommends that Indiana shift from the weighted formula funding approach to a formula that will support all programs during this time of transition in service delivery. It also lists recommended special education integration policies and practices and urges investment in staff development. Contains nine references. (DB)