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Vocational Rehabilitation Funding Formula: Options for Improving Equity in State Grants and Considerations for Performance Incentives
Daniel Bertoni (au)
State vocational rehabilitation (VR) agencies play a crucial role in helping individuals with disabilities obtain employment. In FY 2008, the Dept. of Education distributed over $2.8 billion in grants to state agencies, using a funding formula that was last revised in 1978. Questions have been raised about whether this formula is outdated, allocates funds equitably, and adequately accounts for state agencies' performance. This report: (1) examines the extent to which the current formula meets generally accepted equity standards, (2) presents options for revising the formula, and (3) identifies issues to consider with incorporating performance incentives into the formula. To address these objectives, the report relied upon two equity standards commonly used to design and evaluate funding formulas: beneficiary equity, which stipulates that funds should be distributed so that each state can provide the same level of services to each person in need; and taxpayer equity, which stipulates that states should contribute about the same proportion of their resources to a given program. The report analyzed data from the Depts. of Education and the Treasury, Census Bureau, and other agencies; surveyed state VR agencies; interviewed agency officials and disability experts; and reviewed literature on performance incentives. Tables and figures.
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