Title I

At Ed Money Watch we talk a lot about funding formulas for various federal grant programs. We’ve written about proposed changes to the ESEA Title II funding formula in the House Students Success Act, the need for improvements to the Title I formula, and even idiosyncrasies in the Individuals with Disabilities Education Act formula. Congress has designed each of these formulas to account for factors such as population size and poverty rates or numbers when distributing federal funds to states and school districts. But another factor – something known as “small state minimums” – always seems to run roughshod over the intended target populations.

Small state minimums are intended to ensure that small states receive a basic level of funding under each federal grant. Often, the formula sets the minimum at a certain percentage of the total appropriation that Congress provides that year – like the 0.5 percent minimum in the Title II formula. The idea behind small state minimums has merit: just because some students live in small states doesn’t mean they are less deserving of equitable shares of federal funding. But do small state minimums always work as lawmakers intended? Or do they overcompensate and provide small states with disproportionate amounts of funding per student?

To answer this question, we compiled data on total student enrollment and total state Title I, IDEA, and Improving Teacher Quality State Grant allocations in 2010. We then computed the allocation per pupil for each state and ranked them. This analysis suggests that existing federal funding formulas for those programs do disproportionately benefit small states, though some formulas do so more than others.

The ten smallest states in the nation are the District of Columbia, Wyoming, Vermont, North Dakota, South Dakota, Delaware, Alaska, Montana, Rhode Island, and Hawaii, in that order. Their total enrollments range from a little over 69,000 to just over 180,000 in 2010. As expected, many of these states receive more in federal funding on a per pupil basis than their larger peers.

This is most consistently the case with Title II Improving Teacher Quality State Grants where the first nine smallest states receive nine largest allocations per pupil, in exact order of enrollment. This is because the formula ensures each state 0.5 percent of the total allocation, or just over $14 million in 2010. If the formula did not include small state minimums, each of these states would have received closer to $3 or $4 million under the program.  In fact, each of the small states receive dramatically more than the average allocation per pupil of $60. The District of Columbia received $202 per pupil, almost four times the national average.

Small states also fare well under the Title I formula, which should theoretically be driven by student poverty. DC, Wyoming, Vermont, North Dakota, South Dakota, and Rhode Island all rank in the top 10 in terms of Title I allocation per pupil. Of these states, only DC has a particularly high particularly high census poverty rate at 30.8 percent. The rest all fall in the bottom half of states in terms of poverty rates. These states received over $348 per pupil in Title I, and as much as $686, compared to the national average of $294.

IDEA Part B allocations are least influenced by the small state minimum provisions, but some effect is not all-together absent either. Wyoming, Vermont, North Dakota, Alaska, and Rhode Island each rank in the top 10 in allocations per pupil. Rhode Island has the highest rate of students participating in special education at 18.1 percent, so the high allocation it receives may be justifiable. But the rest of the states don’t fall among the top ten states with special education participants, even though they receive nearly $300 per pupil or more in IDEA funds compared to the national average of $233. Interestingly, DC, which is a small state and has a high percentage of special education students (16.3 percent) ranks only 21st in terms of IDEA Part B allocation.   

Clearly, small state minimums have a significant influence over how federal education funds are allocated to each state to the point where these small states are disproportionately benefiting from federal funds. This is not to say that Congress should eliminate the minimums entirely. But this analysis suggests that Congress should consider the implications of the minimums and perhaps readjust the formulas produce a more equitable distribution of funds. Just as students in small states deserve their fair share, so do students in large states.

Click here to view these data for all 50 states and the District of Columbia.

When the federal government distributes education funding via formulas, it typically takes several things into account. Chief among the data typically used are state- and school district-level poverty rates as determined through the Small Area Income and Poverty Estimates the Census Bureau conducts annually. These poverty rate estimates show the percentage of children age 5-17 living in families with total income below the poverty rate. Recently, the Census Bureau made those estimates available for 2010, providing a unique look into how poverty rates have shifted as a result of the economic recession. Those data are now available on the Federal Education Budget Project’s website (Ed Money Watch’s parent initiative), http://febp.newamerica.net. Users can compare poverty rates over time and view them in tandem with data on federal funding, student achievement, and other demographics.

At the state level, the data show that poverty rates increased from 2009 to 2010 in all but two states – New Hampshire and Missouri. In both of those states, poverty rates decreased slightly. Nevada endured the largest poverty rate increase – 3.4 percentage points – to 19.2 percent in 2010. An additional 15 states saw increases of more than 2.0 percentage points from 2009 to 2010, including several large states such as California, Florida, and Pennsylvania. Nationally, the poverty rate increased from 18.2 percent to 19.8 percent.

At the district level, the data show much greater variability in poverty rates year to year. Of the nearly 14,000 school districts with data, over 9,100 saw increased poverty rates from 2009 to 2010, with an average increase of 3.9 percentage points. But nearly 700 districts saw increases of more than 10 percent from year to year, likely creating a significant increase in the number of students in need of additional services and support. Just over 4,300 districts experienced decreases in their poverty rates and nine districts saw no change at all.

What do these increased poverty rates mean for federal funding? Because most federal funding formulas – including those for Title I, Part A Education for the Disadvantaged Grants, Individuals with Disabilities Education Act grants to states, and Title II Improving Teacher Quality State Grants – take poverty into account, these substantial increases in poverty rates should mean increased allocations for many districts. These numbers are likely to be used to distribute grants for fiscal year 2012 because they provide the most recent data available. Though Congress did appropriate more funding for all three programs for 2012 compared to 2011, it probably won’t be enough to compensate for the demographic changes.  The relatively moderate funding increases may mean that many states and districts will not get sufficient additional federal funds to support the needs of their newly-eligible students, resulting in a tough budget year for the districts that saw large increases in students living in poverty from 2009 to 2010.

Check out the Federal Education Budget Project website to view the new student poverty data as well as new or updated data on state allocations for Title I, Individuals with Disabilities Education Act, and Impact Aid Basic Support Payments for fiscal years 2011 and 2012.

The recently-released House ESEA draft reauthorization bill makes substantial changes to the federal role in public education. Among other changes, the proposal significantly loosens requirements on how states and local school districts can spend education dollars. While more state and local control is a popular mantra, we would like to offer a few words of caution on a few provisions in the House bill. Mainly, these changes to existing law would essentially allow states and school districts to use federal funds previously intended to benefit specific, high-need populations however they see fit without requiring consistent state and local support.

1. First, the bill would move several existing programs to Title I, Part A of the law. These programs, which provide specific funding streams to local school districts for services for migrant students, neglected and delinquent students, English language learners, rural students, and Indian education, would be moved to the same section that funds grants for low-income students. Currently, these programs are authorized and funded under various titles and subparts of NCLB separate from Title I, Part A. This change would enable Congress to provide a single appropriation for all Title I, Part A programs, blurring the lines between funding for the programs. Under the bill these five programs would total 9.0 percent of the annual Title I Part A allocation, which would be set at $16.7 billion for 2013.
   
   At the same time, the bill includes a “flexibility” provision that would allow states and school districts to merge funds from these five programs, as well as set-asides for state administration and school improvement, and use them for any purposes covered by those programs or Title I, Part A Education for the disadvantaged. Under current law, states and districts are only allowed to transfer up to 50 percent of funds allocated under the Education Technology program (which is not funded in current law), the Safe and Drug-Free Schools program, and the school choice program into their Title I, Part A accounts. The five programs listed in the proposed flexibility provision are not included in any current flexibility provisions. Under the House proposal, states would have to notify the U.S. Department of Education and school districts would have to notify their state agencies if they intend to use any of the funding streams for alternative purposes. However, the proposal does not explicitly require states or districts to report how they repurposed the funds, what they were used for, or what programs or services were eliminated due to the flexibility.
   
   By allowing states and districts to merge funds from several funding streams targeted for specific high-need populations, the House bill would give them license to overlook the needs of some students in exchange for others. While giving state and district leaders more autonomy and control over federal funds to tailor services to their students’ needs is important, these specialized federal programs exist to serve students that are typically ignored.


2. Next, the House bill would allow any school that receives Title I, Part A funds to provide school-wide services, regardless of the percentage of students living below the poverty line, at that school. Currently, the No Child Left Behind Act only allows schools with poverty rates over 40 percent to use their Title I funds to provide school-wide services. This program is based on the assumption that all students at schools with such high poverty rates would benefit from additional services. In contrast, schools with poverty rates below 40 percent can use their Title I funds to implement interventions and services targeted just to eligible low-income students. Although the proposal would maintain the separate Targeted program, it seems unlikely that schools would opt to continue targeted programs when they could spread the funds among their whole population.
   
   By eliminating the poverty threshold for school-wide programs, the bill would allow schools with relatively small low-income populations to use their Title I, Part A funds to provide services to their entire student population, the majority of which would not otherwise be eligible for interventions or additional services. Those schools would no longer have to provide targeted services to just their high-need students, meaning these students could get lost or overlooked in the shift.


3. Finally, as we’ve written before, the House bill would eliminate the maintenance of effort provision of Title I, allowing state and local governments to cut per pupil or overall funding for education for districts but remain eligible for Title I funding. Current law allows a local school district to receive Title I Part A funds in an upcoming year only if state and local governments provided the district with at least 90 percent of the funding (per pupil or overall) that they provided in the preceding year. In other words, a district that received $8,000 per pupil in 2010 in state and local funds, must have received at least $7,200 per pupil (90 percent of $8,000) in 2011 to receive Title I funds in 2012.
   
   Assuming that states and local governments would take advantage of this change and cut their education funding, federal funds could begin to account for a much higher percentage of per pupil education funding (currently around 10 percent). It is somewhat ironic that lawmakers that typically support limiting the federal role in education would support a bill that has the potential to increase the percentage of education spending the federal government supplies while allowing state and local governments to cut their own spending.

Each of these changes would have a great impact on how states and school districts are held accountable for the use of federal Title I funds. But all together they would allow states and school districts to dramatically change how they use federal funds for education, practically turning Title I into an all-purpose block grant. These changes, in the name of local control, could make the nation's highest-need students more vulnerable than ever.

Both the House and Senate are currently considering proposals to reauthorize No Child Left Behind, the 2001 iteration of the Elementary and Secondary Education Act. It is unlikely that either of these will actually become law; the Senate education committee’s comprehensive bill and the House education committee’s package of five bills have little in common and, in the House’s case, no bipartisan support, leaving few opportunities for compromise. It’s worth taking a close look at the proposals on the table, however, to get a feel for how each Congressional delegation is thinking about education policy. The bills take different paths in several areas, and below we highlight five: early learning, federal funding, school improvement, teacher and leader quality, and the future of Race to the Top and the Obama administration’s other education reform grant programs.

Though fiscal year 2011 – the year most education funds from the American Recovery and Reinvestment Act (ARRA) of 2009 were set to expire – has come and gone, some states are still clinging to their ARRA Title I funds. These funds are intended to provide additional services for low-income students and are distributed by formula among states and school districts. In an effort to give states the opportunity to use all of their Title I funds from the stimulus bill, last September the Department of Education gave states permission to apply for waivers that would allow them to obligate any remaining ARRA Title I funds through the end of fiscal year 2012. Previously, those states have to obligate the funds September 30^th, 2011 and spend them by January 3^rd, 2012.

This was a significant development for several states that initially faced obstacles in distributing their ARRA Title I funds to districts. In some cases, states had tens of millions of dollars remaining on October 1st, 2011. But it appears that the vast majority of states had at least some money lingering in their ARRA accounts at the end of the 2011 fiscal year. Where do those states stand today? 

According to Department of Education spreadsheets on outlaid and remaining ARRA Title I funds, only six states had used every single one of their ARRA Title I dollars as of January 13, 2012. Those states are Hawaii, Iowa, Kentucky, Missouri, South Carolina, and Vermont, an interesting collection of states with widely varied budget deficits during the economic downturn.

Most states have somewhere between 0.1 percent and 2.0 percent of their funds remaining, meaning they have about 8 months to spend anywhere from a few thousand dollars (Connecticut and Alaska, for example) and several million (Ohio, Texas, and California, among others). In total, over $175 million is still unspent, 1.8 percent of the total $10 billion made available.

But a few states have really lagged in getting their funds out the door. Puerto Rico is the biggest offender – it has $70.0 million in funds remaining, 17.3 percent of its original allocation under ARRA Title I. Nebraska comes in second with 14.2 percent, or $6.8 million in remaining funds. North Dakota, the District of Columbia, and New Jersey round out the top five, each with over 5.0 percent of their funds remaining.

It is likely that the states with relatively small proportions of their funds remaining will have little trouble obligating and spending their ARRA Title I funds between now and September 30^th, 2012. But the states with significant remaining balances will have to engage in some thorough and thoughtful planning to make sure they don’t lose any of these funds at the end of the year.

To download a table containing these data for all 50 states, Puerto Rico, and the District of Columbia, click here.

Answering the Senate education committee’s fall proposal for the reauthorization of the Elementary and Secondary Education Act, last Friday, Rep. John Kline (R-MN), chairman of the House Education and Workforce Committee, introduced two final ESEA bills, completing a package of five bills that would rewrite the current law, No Child Left Behind.

Reauthorization of the Elementary and Secondary Education Act (ESEA, currently known as No Child Left Behind) has been an on again, off again proposition in Congress. The 2002 law expired in 2007 and Congress has extended it a number of times while lawmakers debate some sort of longer term policy.  Meanwhile, the Obama Administration has given states the opportunity to waive some of the provisions of the law. In the latest development, House Education and the Workforce Committee Chairman John Kline (R-MN) announced that House Republicans would be moving forward with several pieces of legislation to address different aspects of ESEA. Earlier this week, that committee released two of these bills, the Student Success Act, which would replace the current Title I of ESEA, and the Encouraging Innovation and Effective Teachers Act, which would replace Title II of the existing law.

By many accounts, both bills contain few surprises. They generally lessen the federal role in state and local K-12 education, particularly as it pertains to accountability and standards, putting more authority in states’ hands. But as we read the bills, particularly the Title I language, we noticed a few things missing that we thought for sure would be in any proposal. The top three surprising omissions are explained below:

1. Maintenance of Effort Provision of Title I: Current law states that a local school district can only receive Title I Part A funds in an upcoming year if state and local governments provided the district with at least 90 percent of the funding (per pupil or overall) that they provided in the preceding year. In other words, if a district received $8,000 per pupil in 2010 in state and local funds, it has to have received at least $7,200 per pupil (90 percent of $8,000) in 2011 to receive Title I funds in 2012. This rule ensures that states and localities don’t dramatically reduce funding for their school districts year to year.
   
   The recently introduced House bill strikes this provision entirely. It effectively gives states and localities license to dramatically cut contributions to K-12 education without jeopardizing their federal funds. While the provision was struck no doubt to give states and districts more flexibility in crafting their own budgets, the change is problematic. If the federal government doesn’t require states and localities hold up their end of education funding, it’s far less likely that they will use Title I funds to provide additional services for low income students – the core purpose of the federal funds.
2. Updates to Teacher Comparability: Current law includes a provision that requires districts to demonstrate that they are comparably funding their low- and high-income schools. But the provision contains several flaws that undermine its goal, including a “loophole” that allows districts to exclude from the comparability calculation variations in teacher salaries that are due to years of experience. Ultimately this means that the current comparability provision has few teeth: much of the variation in spending between schools in a district is due to teacher compensation, and variation due to years of experience, at that. The current law labels spending between schools “comparable” even when schools with children from wealthier families receive much higher funding, so long as it comes in the form of salaries for more experienced teachers.
   
   The House bill makes no changes to the existing provision, effectively allowing districts to turn the intent of the comparability rule on its head and short-change low-income schools. In contrast, the Senate’s Harkin/Enzi bill includes a strengthened comparability provision that eliminates the loophole and limits comparability calculations to actual expenditures rather than student-teacher ratios.
3. High School Graduation Rates in Accountability: Current law includes an extensive accountability provision that holds states, districts, and schools accountable for student performance in math and reading and high school graduation rates. Though the House-proposed bill requires states to implement an accountability program that pertains to math and reading test outcomes, it strikes the high school graduation rate provision.  Though the bill allows states to include other student outcome measures besides math and reading test performance, high school graduation rates seem like a glaring omission, especially given the recent focus on high school completion among policymakers and other stakeholders. By comparison, the Harkin/Enzi reauthorization bill in the Senate includes high school graduation rates as a required part of a state accountability plan.

Although the House has released its bill on the core functions of ESEA – accountability and the distribution of Title I funds – it is unlikely that the reauthorization process will proceed full-speed ahead. Senator Tom Harkin (D-IA) has said that he will not move a bill forward until the House presents a bi-partisan bill and many stakeholders believe that reauthorization will not occur until 2014 when the final NCLB proficiency deadline approaches (the point at which 100 percent of students are supposed to be proficient or above on math and reading tests). But at least now we know what the House has in mind for a future federal role in K-12 education: far fewer fiscal and accountability requirements for state and local school districts masquerading as flexibility and local control.

Last week on the National Journal Education Experts blog, we were asked how to ensure that federal funding under Title I -- the provision for disadvantaged students  -- goes to the schools most in need. In education-speak, this is known as "Title I comparability."  The National Journal asked:

A little-known provision of the American Recovery and Reinvestment Act of 2009 is starting to bear fruit.

Deep in the legislative text of the American Recovery and Reinvestment Act of 2009, Congress buried a school-level data collection requirement. Every state had to submit school-level data on state and local per-pupil expenditures for school personnel in 2008-09. Once collected, these data would show the degree to which school districts comparably fund their Title I and non-Title I schools, as required in the Elementary and Secondary Education Act.

The Department of Education completed the data collection a few months shy of its original goal and has just released a report on their findings. Though ED avoids drawing conclusions about the degree to which current comparability requirements are or are not working, the evidence put forth in the report is pretty clear. Current comparability requirements fall far short of ensuring that low income students receive equitable resources as their higher income peers.

As a refresher, teacher comparability refers to a current provision of Title I that attempts to ensure that school districts provide equitable state and local resources to both their low-income (Title I schools) and their higher-income (non-Title I schools). School districts can demonstrate comparability by showing that per pupil expenditures or student-teacher ratios at their low-income Title I schools are within 10 percent of the average in their higher-income non-Title I schools.

The kicker, though, is that the law allows districts to ignore any variation in spending per pupil related to a teacher’s years of experience. Conversely, a district can demonstrate comparability by showing that they have a uniform teacher salary schedule that all schools use. Regardless of how a district chooses to demonstrate comparability, the current methods allow districts to obscure the actual resources – dollars per pupil – in their Title I and non-Title I schools. Because teacher salaries are the largest school expense, this “loophole” undermines the intent of comparability and practically ensures that districts are able to inequitably fund low-income schools.

Because the ARRA data collection effort provides data on actual state and local personnel expenditures at the school level for all schools in America, it can be used to determine the degree to which schools are comparably funded. Using these data, ED calculated the number and percentage of Title I or higher-poverty schools that received below average per pupil personnel expenditures for their district by school grade level. Though the report presents the information rather matter-of-factly, the conclusions are cause for concern.

Though the report provides many ways to cut the data, the most telling analysis is also the simplest. The report shows that 15,749 Title I schools (43 percent of Title I schools in the study) received lower per pupil personnel expenditures than their district average in 2008-09. Of those, 11,228, or 31 percent, received per pupil expenditures that were more than 10 percent below the average – above the threshold for variation in resources currently set in the comparability requirement (though districts are not currently required to include actual spending per pupil). Though this number seems somewhat inoffensive – it is less than 50 percent after all – it is still far from zero, where it should be according to the intent of the law.

The average school in 2009 had 547 students. This means that more than 6 million students in this country (that’s roughly the combined student populations in Arizona, Missouri, Massachusetts, Tennessee, Washington, and Indiana), likely those that need additional resources the most, are attending schools that benefit from dramatically less state and local funding than federal law suggests they should.

Title I funds are intended to provide additional resources for low-income students. Given the wide gap in state and local support for these Title I schools, it is difficult to imagine that those funds are doing much more than bringing per pupil funding in these schools up to funding parity. Clearly, comparability as it currently stands is not doing what it should – ensuring that state and local funding provide a level playing field for the education of low-income students.

Luckily, Congress is considering legislation that would change all this in the Harkin/Enzi Elementary and Secondary Education Act reauthorization bill. Though that bill may be flawed in several ways, Congress should be sure to maintain the bill’s comparability language and do more to ensure that low-income students receive the support they need.

With Congress still a long way from reauthorizing the Elementary and Secondary Education Act (ESEA), the Department of Education plans in the meantime to waive some of the law’s provisions in exchange for getting states to undertake reforms. The Department might issue such a waiver for one No Child Left Behind (NCLB) Act program that is unpopular among states and school districts: supplemental educational services (SES).

Failing schools under NCLB must provide students with supplemental educational services, primarily implemented as tutoring outside of school time. Those schools are required to set aside up to twenty percent of their federal funds under Title I, Part A and use them to fund transportation for school choice students, tutoring, or a combination of both. Whatever portion of the set-aside is not used to cover eligible students can be reverted for use in other Title I activities. A tutoring industry official placed the estimate of federal dollars spent on tutoring in 2010 at about $650 million for 600,000 students, well below the total available amount ($2.55 billion in 2005, up from $1.75 billion in 2001 thanks to a jump in schools characterized by NCLB as “in need of improvement”).

Low participation rates, questions regarding the effectiveness of the program, and costs have all made the tutoring services controversial. Students have been slow to sign up for tutoring. A GAO report published in 2006 suggested that 20 percent of school districts that were required to provide in the 2005 school year had zero students participating. And despite multiple attempts by the school district to notify parents of the service, about half of districts still failed to notify them prior to the start of the school year.

Participation has been a persistent problem throughout the program’s existence, too.  A 2008 report from the Department of Education showed that in 2007, 2.4 million children were eligible to participate in SES, and only 446,000 did so. Today, over half a million students participate annually, but most still only receive 20 to 40 hours of tutoring in an entire school year, hardly enough time to make a significant impact on students’ achievement.

Studies have shown the limited effectiveness of the program. Relative to other Title I activities, one study found that the positive impact tutoring has on students’ achievement is very small. The same report also found that school districts’ programs tended to be more successful than outside providers were; yet as of 2007, only 40 percent of programs were administered by schools or school districts.

States’ abilities to monitor program effectiveness are also highly limited. States are required by the Department of Education to monitor SES programs, measure their impact, and remove from the list of authorized providers any who fail to demonstrate student achievement. But no federal funding is provided for any studies of the programs. Assessment of SES varies from state to state. In early 2006, the Government Accountability Office found that only two states – New Mexico and Tennessee – had managed to provide SES evaluation reports to the public, and only a few others were on their way to doing so.

Students have underutilized the tutoring program, but supplemental educational services have not demonstrated much impact on low-income students in low-performing schools. Tutoring services have set aside significant sums of money from the Title I allocations for each school, necessitating cuts to other activities than have been proven to be effective. The NCLB waivers offered by the Department of Education could end that cycle, allowing schools to pursue more effective routes to improving student achievement.