UPDATED: Initial Analysis & Response to Senate-Proposed Title I Formula Rewrite

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This blog post comes from AASA's Noelle Ellerson and Marty Strange, former policy director Rural School and Community Trust and former coordinator of the Formula Fairness Campaign involving over 20 organizations seeking more equity in the Title I formula.

Senator Burr has introduced an ESEA amendment that overhauls the Title I formula. The bill revamps the current formula structure, making six assumptions to revamp the current formulas into one singular formula.

Those changes are:

  • Funds available to states and LEAs are provided only through the EFIG formula, as opposed to providing funds through the four formulas in current statute.
  • Funds distributed through EFIG will use ‘formula child’ quintiles that have been updated to reflect roughly 20% of all children
  • Grants are calculated using the national average per pupil expenditure
  • The EFIG factor included in current law is NOT used in the calculation of the grant
  • Funding for Puerto Rico is capped at its estimated FY2015 share
  • All LEAs must have a formula child rate at or above 20% to benefit from the weights in the 4th and 5th quintiles of the number-weighting matrix 
  • Read the related CRS analysis/report as prepared by the Congressional Research Services (CRS).

This set of changes is different than the Title I formula fight AASA has championed on the House side. That bill—All Children Are Equal (ACE) Act—focuses on ensuring that Title I dollars are targeted based on concentration of poverty, not presence of poverty. It looks at allocations within states, touching only the EFIG and targeted formula, leaving basic and concentrated alone. 

Here are the key takeaways from the proposed changes:  

  • It shifts money both between and within states. Some states win, some state lose, some districts win, some districts lose. Overall, about 600 districts lose all of their Title I funding. 9,000 lose something, and 4,600 gain. At the state level, 15 states (CT, IL, LA, ME, MD, MA, MI, NE, NJ, NY, OH, PA, VA, WV and WI) lose. Please see the attached one pager for the state-specific impact. We also have access to school-level runs.
  • The cost to revamp the Title I formula under this proposal while holding schools harmless is upwards of $970 million.
  • The bill shifts from state average per pupil expenditure to national per pupil expenditure. This is in large part what forces the shifting of dollars between states – away from high-spending states and toward low-spending states.
  • The bill preserves number weighting, which drives the shifting of dollars both between and within states. Larger districts in states that gain due to use of statewide per pupil expenditure gain mightily, even if they are low percentage poverty districts.  Larger districts that lose because they are in high-spending states lose less than smaller districts in the same states.
  • It updates the quintiles, setting enrollment breaks at the very levels where one-fifth of students are enrolled. Under this change, school districts reach the top enrollment bracket at 26,000 rather than the current 35,000. This becomes problematic only in the context of number weighting. It aggravates the effect of number weighting because very large districts have even more of their students weighted at the top weight.  Otherwise, it is simply adjusting quintiles to reflect student enrollment.
  • This proposal rewards inequitable and inadequate state funding formulas.

AASA does not endorse this bill as introduced. We applaud Senator Burr for his focus on updating and modernizing the Title I formula. We applaud his efforts to work to target dollars more closely to the neediest districts. All formula fights are tough, as there are winners and losers. The need for a revamped formula trends with times of fiscal limitation; scarce dollars have a way of highlighting formula inequities.  As such, we welcome the opportunity to explore the following changes to the Burr proposal: 

  • Set a floor of national per pupil average, in terms of what a state can receive. Allow for variance above that amount to reflect (and not disproportionately punish) states where it truly costs more to educate students or where they have invested more significantly.
  • Eliminate number weighting. The continued presence of number weighting—and this is the core issue of our long-running work on ACE—is that it allows larger, less poor districts to receive a higher per-pupil allocation than their concentration of poverty would warrant. Smaller school districts (both rural and urban) struggle most under this. Their poverty level is higher, but the critically needed dollars they qualify for are usurped by larger, less poor districts that fill students in the upper brackets, where (under this bill!) the student can be weighed up to 6x the average!  
    • Under current law, a system preserved in the Burr amendment, there are two weighting brackets: one weighted based on the count of students in poverty (“number weighting”) and one weighted based on the percentage of students in poverty (“concentration weighting”). School districts evaluate their poverty level based on count and percentage, and depending on which bracket maximizes their per-pupil allocation, that is what they receive. While this seems inherently fair in that every district seemingly ‘maxes out’, the reality is that number weighting disproportionately favors larger, less poor districts who are able to fill the very top levels of the weighted bracket, warranting more money, per pupil, than actual concentration of poverty would warrant. Districts are far more likely to ‘max out’ in the number weighting bracket than to do so under concentration weighting.
    • There is a difference between the mere presence of poverty and a deep concentration of poverty. Take, for example, two school districts, both with 100 students living in poverty. School District A enrolls 500 students, while School District B enrolls 2,000. Under number weighting, both schools would receive the same allocation per child, though their actual concentrations of poverty are far apart (20% in School A, 5% in School B%). A low presence of poverty is not where the compounded impacts on education occur; rather, it is in the concentration of poverty. The real issue lies when you compare very large (whether suburban or urban) school districts who have very large enrollments and can place lots of students in the highest number weighting bracket. Nobody is denying that they have a large COUNT of students in poverty; the issue is that their large count is not necessarily a large CONCENTRATION, and is often in fact a lower concentration than their current Title I allocation, under a percentage weighting schema, would warrant. That is, they likely end up in the upper levels of a number weighting bracket, with a higher per-pupil allocation than they would receive if funds were allocated based solely on concentration of poverty. 
    • When an unintended consequence in federal policy is found to not allocate resources in the most effective manner based on the stated purpose (which, in Title I, is concentration of poverty), any effort to improve allocations should address-rather than preserve—that flaw, which in this instance would mean eliminating number weighting.
  • We recommend a study of this approach and that of ACE to see which elements of each proposal truly are most equitable and how those elements can be combined. This could be accomplished through a secondary amendment calling for a report.
  • We recommend that any Title I formula change has a multi-year implementation, especially when funding isn’t expected to increase. We would also explore the option of a hold harmless provision.

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