This report is the result of a 1995 national mail survey of state special education administrators concerning mechanisms used by states to fund special education services for school-age children with disabilities and the costs to provide these services. All 50 states and the District of Columbia responded to the survey. Part 1 contains three sections that provide descriptive information on the special education finance systems in the states and the policies that guide them, special education revenues and expenditures, and a conclusion addressing the implications of the data. Among these are that growth of the special education population is at a faster rate than the general education population; a shift is occurring from state to increased local funding; and current interest in restructuring education suggests increased efforts to improve the effectiveness of programs for children with disabilities while containing expenditures. Possibilities for increasing efficiency are identified (such as increasing integration across categorical program areas) as are fiscal policies that conflict with reform goals and accountability issues. Part 2 of the report provides abstracts of each state's funding mechanism (arranged alphabetically by state)for the 1994-95 school year. Extensive tables and figures present supporting detail. An appendix lists special education funding contacts in each state. Contains 25 references. (DB)