Drawing on documentary data and surveys of state education officials, this report reviews current federal and state initiatives for disadvantaged, language-minority, and handicapped students in order to help states assess their options in light of the recent consolidation of federal education programs. The author notes different states' approaches and provides information on federal and state resources. Part 1 presents an overview of federal and state involvement in special-needs programs and discusses federal goals and objectives, state actions since 1965, and state financing mechanisms. Parts 2-4 cover federal and state programs and state funding approaches in compensatory, bilingual, and special education, respectively. State eligibility criteria for compensatory and special education programs are also examined in parts 2 and 4, while part 3 focuses on state legislation for bilingual programs. In the final part the author assembles national and state-by-state data on funding levels and analyzes past and future trends in federal and state support for special-needs programs. (Author/RW)