The impact of changes in Pennsylvania's special education program rules and financing system during the first 2 years of implementation (1991-92 and 1992-93) are considered. Policy objectives were: to control escalating state expenditures for special education, to give school districts greater control over special education expenditures, and to reduce the number of students identified for special education programs by using instructional support and provision of services in the regular classroom. Information is presented on controlling state and local costs through special education formula funding. Factors hypothesized to influence a district's inability to control its special education costs are analyzed, including poverty, total expenditures per pupil, percentage of special education pupils, percentage of children with severe disabilities, level of intervention, and program control. Data are provided on: school district enrollments; numbers of students receiving special education, including the location of the service delivery and provider of the service; total school district expenditures; special education expenditures; and state support of special education expenditures through the new formula. Data are also provided on special education expenditures per student and special education as a percentage of total expenditures. Initial results for the first 2 years suggest that the aims of policymakers generally are being realized, although not uniformly throughout the state. Suggestions for a continuing research agenda are offered for policymakers. Four tables present the data. (SW)