Proposed Federal Budget for 2026-27

The White House has released their budget proposal for fiscal year 2027 (which starts in October 2026 and runs through September 2027). The FY 2027 U.S. federal budget proposal was submitted by President Donald Trump through the Office of Management and Budget (OMB). The budget reflects the administration's priorities and fiscal policies for the upcoming fiscal year.

There are some important considerations in the proposal that would negatively impact families with children with disabilities if it came to be enacted. It is important to note that many of these proposals were also in last year’s White House budget and were rejected by Congress.

We looked at the details of the proposal to find the highlights. We want families to understand it so that they can contact their federal representatives and remind them, yet again, that special education, advocacy, and civil rights protections for individuals with disabilities are essential to our children and the adults they will become.

How to contact your representative:

• COPAA has Calls for Action that enable you to contact your representatives easily.
• PTA Voter Voice lists top priorities and actions.
• The National Down Syndrome Congress has a Call to Action.
• You can also write a letter to your representative or senator or visit them in their constituency office. Find your representative here.

You may have heard that the proposed package contains an increase in IDEA funding, and indeed it does contain a small increase. But let’s dive down into how federal IDEA funding works and why this proposal is actually bad news for students with disabilities.

Call for full funding of IDEA

IDEA just celebrated its 50th anniversary — but over 50 years, special education has changed drastically. IDEA is in reality a series of laws, including the Education for All Handicapped Children Act (EHA) in 1975, the Individuals with Disabilities Education Act (IDEA) in 1990, and the Individuals with Disabilities Education Improvement Act in 2004.

Fifty years ago when Congress passed the EHA, the bill did not include any appropriations; it authorizes the government to spend money, but it requires a funding bill or appropriation to determine how much money. The EHA almost didn't pass because of disagreement over how much government funding the states could expect. The compromise agreed was that the formula would provide a maximum grant for each state that was equal to its count of children with disabilities served, multiplied by a gradually increasing percentage of the national average per pupil expenditure (APPE) — beginning at 5% of the APPE in FY 1978, increasing to 40% in FY 1982, and then remaining at 40% every year thereafter. However, this 40% is a cap rather than a requirement, and funding needs to be appropriated by Congress every year. In reality, Congress has never come close to the 40% cap. The highest amount funded was in FY 2006, which was almost 19% of APPE.

Historical Comparison of the Percentage of APPE Funded through Appropriations for IDEA and the IDEA Full-Funding Level (40% of APPE), FY 1981 to FY 2025:

Source: Congressional Research Service

Many education advocacy groups and disability organizations are campaigning for full funding of IDEA. This does not mean that the federal government would fund all the cost of special education; it only means it would fill the 40% cap. In 2020, the National Education Alliance estimated how much each state would gain from having full funding. For example, California received $1,327.8 million in 2020 but would receive $3,301.1 million under 40% full funding. Pennsylvania received $462.9 in 2020 but would receive $1,440.2 million, and Maryland received $217.4 million in 2020 but would receive $568.1 million with full funding.

In 2025, APPE was $17,250. The formula allocation was around 10.2%, leaving a shortfall of a possible $38.66 billion that Congress could allocate to be divided up among the states. There is a bill in Congress, the IDEA Full Funding Act, that many organizations are supporting for Congress to increase the allocation each year until reaching full funding in 2035.

IDEA state grant formula

In 1975, the formula used to divide Congress’s appropriation up between the states was simple: take whatever percentage of APPE we were planning to fund and multiply it by the number of children with IEPs in a state.

In the 2004 reauthorization of IDEA, Congress changed the original formula because of concerns that the funding may create an incentive to identify students with disabilities and result in a disproportionate percentage of students of color being “labeled” with a disability. From FY 2007 onwards, the funding that each state gets in their grant is calculated by a formula that takes an amount (less than 40% of APPE) multiplied by the number of children with disabilities the state served in the 2004-2005 school year and then adjusted by the annual rates of change in the state's population for children in the age range for special education (85% of the adjustment) and in the state's population of children living in poverty in the same age range (15% of the adjustment).

This formula effectively penalizes states that historically had low identification rates and have since improved their Child Find processes. There is also a concern if a state is losing population to other states disproportionately when it comes to children with disabilities (possibly to states that offer better services to children with disabilities, like California). In both these cases, the proportion of children with disabilities is increasing faster than their general child population, which may be declining. By the way, moving away from the original funding model has not slowed the increase in identification.

Another complication is if the state changes the age for which it offers IDEA. For example, in this Congressional Report, California is listed as offering FAPE from age 3 to 18 when it in fact offers FAPE until age 22. The result is that IDEA funding across the states is both arbitrary and disappointing.

Federal funding is not the biggest problem for special education

In 2025, California received $1.5 billion in its state grant, but California schools spent over $12 billion on special education, so even if quadrupled, the full funding of IDEA would not fund all of special education. The remaining funds come from state and local funding. Typically, local and state funds provide most of the support for IDEA, with roughly 10-15% coming from federal sources.

To understand why the White House proposal is problematic, we need to look at the different allocations of funds within IDEA.

IDEA is broken up into four main funding streams:

• There are three grants to states; these grants are given to states to be used to provide special education on the condition that they follow IDEA.
  • Part B funds for school age 5-22
  • Part B funds for preschool age 3-5
  • Part C funds for infants and toddlers age 0-3
• Part D funds are allocated nationally.

At first, the new budget looks as though there is no money for preschool age 3-5, but the proposal simply consolidates the grants.

Program and financing (in millions of dollars):

New 2026-27 proposal:

• The budget provides nearly $16 billion for IDEA serving over eight million children with disabilities.
• This includes a $489 million increase for IDEA State Grants and a $50 million increase for IDEA Grants for Infants and Families. (Remember there is a shortfall of $13 billion.)

Despite the increases proposed, it is of great concern to the disability community that the White House again proposes to combine the six different grants into one. Many administrators worry that if states are responsible for allocating funds between Parts A, B, and C, there may not be enough spent on early intervention. As we have seen, typically administrators in local school districts are forced to use local funds for 60-70% of IDEA funding because they are obligated to provide FAPE whether they have the money or not.

National Grants (Part D) provide accountability and technical support

The White House wants to hand over national IDEA programs to the states, but there are reasons why this won’t work. Providing technical support at a regional level is more efficient for low-incidence disabilities. By cutting national Deaf programs, states will struggle to provide technical support for Deaf children in schools. National technical assistance grants have funded organizations such as TIES Center and SWIFTSchools that provide technical assistance on inclusion in education.

Parent Information Centers provide support to individuals with disabilities and their families that help keep the state department of education accountable for providing IDEA. It doesn't make a lot of sense to ask those same institutions to apply for funding from the state that they are monitoring.

The new proposal includes funds previously allocated by the US Department of Education to organizations now rolled into the state grants without specific requirements that they need to be spent on those programs.

Program and financing (in millions of dollars):

Other education funding

The Office of Civil Rights in the Department of Education, now depleted, still gets an allocation to investigate civil rights claims in education.

Office for Civil Rights, program and financing (in millions of dollars):

There are also funds from the Department of Education that are not under IDEA but fund vital services for young people with disabilities in each state (such as the Department of Rehabilitation in California). While career and technical education is proposed to move to the Department of Labor, Vocational Rehab is still included under the Department of Education.

Vocational Rehabilitation program and financing (in millions of dollars):

Over in the Department of Health and Human Services, the Administration for Community Living is proposed for elimination with no funding. Some of its programs are moved elsewhere, notably the new agency called Administration for Children, Families, and Communities (ACFC). Key programs that are now under the ACFC are Developmental Disabilities programs that include the 56 State Councils on Developmental Disabilities (SCDD) and 56 Developmental Disabilities Protection and Advocacy formula grants.

• SCDDs are led by people with intellectual and developmental disabilities I/DD, family members, and other stakeholders. They focus on advancing policies and practices that improve opportunities for people with I/DD to live and participate fully in their communities, particularly with access to education, employment, and healthcare. Councils seek to empower self-advocates and families, support policy development, fostering cross-sector partnerships, and educate decisionmakers using research and lived experience.

• Protection and Advocacy grantees provide legal advocacy services to protect the health, safety, and rights of people with I/DD, including legal representation and assistance in community and institutional settings. P&A organizations like Disability Rights California pursue systemic reforms that improve access and inclusion while also providing individualized, person-driven advocacy.

The HHS requested $125 million for Developmental Disabilities programs in FY 2027, a decrease of $66.4 million from the FY 2026 level. It is encouraging that SCDD and Protection and Advocacy formula grants that fund state-level organizations will maintain similar levels of funding to FY 2026.

Where the cut comes in is that the administration does not propose funding for Developmental Disabilities Projects of National Significance, University Centers for Excellence in Developmental Disabilities (UCEDD), and Voting Access for Individuals with Disabilities. The budget provides additional funding to the Independent Living program so that states have the flexibility to continue providing the services supported by these programs, if they so choose.

UCEDDs, such as The Mind Institute at UC Davis, provide technical expertise and thought leadership in the disability community. Many UCEDDs also run Leadership Education in Neurodevelopmental and Related Disabilities (LEND) programs to train professionals, ensure access to screening and diagnosis, and offer information for parents supporting individuals with autism and developmental disabilities. LEND is funded by the Maternal & Child Health grant, which is housed in the Administration for a Healthy America agency — maintaining previous year’s levels at $38.2 million.

If you have been served by your local UCEDD or participated in a LEND program, this would be a great time to tell your representatives how wonderful they are.

1. Submission to Congress: The president's budget proposal is submitted to Congress, where it serves as a starting point for the federal budget process.

2. Congressional Review and Amendments: The House and Senate Budget Committees review the proposal and draft their own budget resolutions. These resolutions set the overall spending and revenue levels but do not allocate funds to specific programs.

3. Appropriations Process: The House and Senate Appropriations Committees divide the total spending into 12 appropriations bills, each covering a specific area of government (e.g., defense, education). These bills are debated, amended, and voted on by both chambers of Congress.

4. Reconciliation and Final Approval: Differences between the House and Senate versions of the budget are reconciled in a conference committee. The final budget is sent to the president for approval or veto.

Key dates in the budget process:

• April 2026: The president submitted the FY 2027 budget proposal.
• Spring 2026: Congressional Budget Committees begin reviewing the proposal and drafting budget resolutions.
• Summer 2026: Appropriations Committees work on the 12 appropriations bills.
• September 30, 2026: Deadline for Congress to pass the budget to avoid a government shutdown.
• October 1, 2026: Start of FY 2027.

These steps and timelines ensure that the budget undergoes thorough review and debate before being finalized.

Remember that this is just a proposal — the White House cannot enact these changes without Congress, so talk to your representatives and tell your story!

Sources:

• Budget of the U.S. Government FY 2027
• Appendix - Budget of the U.S. Government FY 2027
• HHS Budget in Brief
• U.S. Department of Education Fiscal Year 2027 Budget Summary