IDEA Part B funds have more than doubled between the 1999 and 2003 fiscal years, from $4.3 billion to $8.9 billion. This is an increase from 8% to 13% of total special education spending. Increases in federal funds can theoretically support "program growth" by providing fiscal relief to states and districts facing rising special education enrollments, and support "program enhancement" through expanded services for individual special education students. 2001-02 was the first year that federal funding increases were sufficient to fully offset added costs associated with new special education students and inflation, creating the potential for support of program enhancement in addition to supporting growth. In 2000, the distribution of a portion of Part B funds began, using a formula based largely on total enrollment instead of the count of students in special education. The new formula is becoming more prevalent, resulting in a reduction in the amount of Part B funds per special education student in states identifying higher percentages of special education students and an increase in funds per student in states with lower identification rates. A simple answer to the question of the impact of new federal special education funding is that all states and localities have experienced increased Part B funds--virtually all are receiving more federal funds per identified special education student. At the same time, the impact has varied considerably across states and localities. The largest source of variation in the impact of Part B increases across states and districts is differences in special education enrollment trends. States with rapidly increasing enrollments are more likely to rely on Part B to support program growth rather than enhancement. (Contains 2 tables, 3 figures and 14 notes.)