State aid for special education shapes local decisions about identifying students for special education, the programs and services to which students have access and in which students with disabilities are educated, and how local educators structure and administer their special education programs. The connection between state funding for special education and local decision-making suggests that state policymakers and education leaders alike should give careful consideration to how state aid programs are designed and implemented. Well-designed funding programs can reinforce state goals for educating students with disabilities. However, funding programs that are misaligned with program goals can have unintended and sometimes undesirable consequences that undermine efforts to ensure students with disabilities have access to the supports and services they need to succeed in school. The complex interplay among policy goals, state funding systems, and local decision-making underscores the need for three considerations when designing policy: (1) the relationship between local special education programs and their cost; (2) the motivational effects of the design elements comprising state aid calculations; and (3) administrative efficiency.