This report focuses on cost containment problems in Vermont's special education system and makes recommendations for reform. It examines the context of special education in terms of civil rights, advocacy, and individual versus system needs. The question of runaway costs in special education is addressed and supported with data from the fiscal year 1991 Special Education Service Plan. The report concludes that schools can bring about some fundamental changes in the manner in which children with disabilities are served and bring special education costs into reasonable alignment with general education costs. Recommendations include: (1) improve coordination of special, compensatory, and regular education services; (2) clearly articulate the purposes and parameters of special education; (3) prepare all educators to work effectively with students who have special needs; (4) provide special education only for those students who have a clear and compelling need for specially designed instruction and related educational services; (5) continue the commitment to early intervention; (6) develop service delivery models that achieve maximum cost-effectiveness while appropriately meeting students' needs; (7) keep the public well informed about special education costs; and (8) closely monitor implementation of the special education formula. School district reports of unmet needs in special education are summarized, focusing on the statewide need for an additional 85 specialists. (JDD)