The goal of state special education funding should be to equitably distribute funds that are adequate for all schools to meet their legal obligation to provide a free and appropriate public education to students with disabilities. Unfortunately, inadequate state special education funding is growing more common in Philadelphia schools. In this report, the Education Law Center--PA (ELC) and Research for Action (RFA) examine Pennsylvania's Special Education Funding (SEF) formula and find that it does not accurately account for district poverty. As a result, state special education funding does not fulfill its intended purpose of addressing funding disparities resulting from differences in local wealth. However, the SEF can be improved during the 2019-2020 legislative session. We find that updating the Special Education Funding formula -- by replacing the current metrics used to measure district characteristics with the newer metrics already used in Pennsylvania's Basic Education Funding formula -- would create a more equitable distribution of the state funding available for students with disabilities. In addition, we describe one simple approach that would prioritize new spending toward the districts that the updated formula identifies as the most inequitably funded, while ensuring that all other districts maintain current funding levels.