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Bitter Pill, Better Formula

Toward a Single, Fair, and Equitable Formula for ESEA Title I, Part A

SOURCE: AP/Charles Dharapak

Third grade students participate in a math exercise in Arlington, Virginia.

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Column: Spoonful of Sugar: An Equity Fund to Facilitate a Single, Fair, and Equitable Formula for ESEA Title I, Part A

Interactive Graphic: Title I Education Spending

Federal policymakers and education officials, aware of the potential ferocity of a “formula fight,” tread with care when it comes to revising the way Title I, Part A of the Elementary and Secondary Schools Act distributes funds. But the formulas driving Title I-A grants require a major overhaul because, in short, they favor wealthy states and enormous school districts. Many schools serving high concentrations of poor students are being shortchanged.

Previous efforts to improve the targeting of Title I-A funds to school districts serving children in concentrated poverty, the program’s intent, have quadrupled the number of formulas involved, yielding only marginal improvements. There are formidable political barriers to reform, but the sheer complexity of the formulas poses an additional barrier. It is easy for policymakers to overlook inequity when it is shrouded in the fog of four funding formulas.

A recent paper, “Secret Recipes Revealed,” demystified the formulas driving Title I-A grants, setting the stage for the three goals of this paper:

  • To elaborate a framework shedding light on questions of fairness
  • To propose a new, single formula to replace the current hodgepodge of Basic Grants, Concentration Grants, Targeted Grants, and Education Finance Incentive Fund Grants
  • To highlight major political obstacles to funding Title I-A more fairly

The framework for the proposed formula has three dimensions, each conceptually grounded in current policy but operationalized here in a refined way:

  • The framework accounts for the cost of schooling by using the Comparable Wage Index, developed and maintained by the National Center for Education Statistics. This represents an improvement over the current use of state average per-pupil expenditures, which is biased in favor of wealthy states.
  • Fiscal effort, the extent to which a state leverages its own resources to finance public education, is recognized by the current Title I-A funding scheme, albeit in an incomplete and slightly skewed way. A refined measure of fiscal effort in the proposed formula eliminates current bias against states with large households.
  • The framework focuses on concentrations of children from low-income families, not on raw numbers of children in poverty, the source of inflated allocations to extremely large districts.

The proposed formula adopts the eligibility criteria of the most modern of the four Title I-A formulas. Eligible districts under these criteria must serve at least 10 poor children also representing at least 5 percent of all children served in the district. An authorized amount for each district equals the product of four factors:

  • $2,250, a somewhat arbitrary amount that puts the product in dollar terms and determines an authorized total
  • A weighted count of qualifying children employing the concentration-based weighting scheme embraced by the current Targeted Grant formula
  • A rescaled weighted cost factor based on state and local values on the Comparable Wage Index
  • A fiscal effort factor using a refinement of the measure used by the current Education Finance Incentive Grant formula

Ratable reduction procedures, conceptually the same as halving a recipe, rescale authorized amounts based on actual appropriations, and inherited hold-harmless procedures are implemented to protect districts from precipitous drops in funding for reasons beyond their control. Similarly, a growth ceiling prevents districts’ allocations from increasing at imprudently fast rates.

Substantial funding increases would moderate discomfort created by a switch to the proposed formula. The 2010 fiscal year appropriations for Title I-A provide no such increase. Under level funding with the proposed formula, sparsely populated states would see substantial drops in funding rates, and most western and southern states would see increases. Yet the largest districts within states would tend to lose more or gain less than their smaller counterparts. The proposed formula could be made more palatable to those standing to lose in a number of ways, but the proposed formula should serve to stimulate a lively debate and responsible exploration of a way to fund Title I-A more fairly.

Read the full report (pdf)

Download the executive summary (pdf)

Column: Spoonful of Sugar: An Equity Fund to Facilitate a Single, Fair, and Equitable Formula for ESEA Title I, Part A

Interactive Graphic: Title I Education Spending

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