Special education is the largest categorical funding program in California's K-12 education budget. In 2016, the Public Policy Institute of California published "Special Education Finance in California" (ED571011), which looked at changes that would align the state's special education program with the principles underlying the Local Control Funding Formula (LCFF) and the goals of the 2015 Statewide Task Force on Special Education. The 2016 report spurred significant discussion about the funding and governance of services for students with disabilities. This second report revisits these issues, focusing on two main issues. The authors discuss the strengths and weaknesses of the state's financial formulas, and they identify options for ensuring that state support for special education keeps pace with district costs. The authors reexamine special education governance issues posed by the intermediary entities, known as Special Education Local Planning Areas (SELPAs), and provide options that will help align special education with the underlying principles of LCFF.