View state projections data under proposed formula (.xls)
Sen. Lamar Alexander (R-TN) recently released his recommendations for a new Elementary and Secondary Education Act, or ESEA, and the Senate has begun discussions on his proposals. Congress first passed ESEA in 1965, and it has gone through several reauthorizations since then. The latest is known as No Child Left Behind, which provides additional resources to states and districts to improve their education systems and holds schools accountable for their academic progress.
One section of ESEA—Title I, Part A—is the single largest K-12 investment that the federal government makes. It is the most powerful lever available for driving improvements in educational outcomes for poor children. Currently, Title I includes four different formula grants that determine how much districts receive from the federal government. Since ESEA’s passage, several researchers have pointed out that the current formulas fail to achieve the aim of Title I: to alleviate the effects of growing up in impoverished homes and neighborhoods. Moreover, without federal intervention, these students would likely receive insufficient education dollars, given their state’s current resources or simply their funding priorities.
Sen. Alexander’s proposal does not address these issues. But there is a way to address them. Several years ago, Raegen Miller and Cynthia Brown developed a new approach to Title I funding that does a better job at meeting the original purpose of Title I and does so through one, simpler formula.
In brief, the current formulas exacerbate rather than ameliorate interstate funding disparities, and Miller and Brown’s new Title I formula fixes several of these issues. States that currently invest more in education get more in federal funds even though state investments in education are primarily a function of the wealth of the state. Therefore, the net impact of the current Title I formulas is to favor states with greater capacity over states with greater need. The current formulas also include hugely distortive minimum amounts for small states. Moreover, the current formulas drive problematic inequities within states by benefiting larger districts over medium-sized or smaller ones. Miller and Brown’s new formula addresses these issues by substituting better measures for concentrated poverty and the cost of education and by eliminating minimums for small states.
We have updated Miller and Brown’s analysis to inform the current debates about the bill. Using the most recent data available, we again show that Miller and Brown’s formula is much better than the current formulas at targeting Title I dollars to settings of concentrated poverty. Specifically, we look at how much money districts would receive under the new formula and compare these estimates to their allocations for fiscal year 2014. (see Figure 1) We determined the total state-level allocation by adding up each district’s allocation within each state.
In our analysis, we found that some states would receive more total Title I resources under our new proposed formula, and some would receive less. We estimate that Mississippi, New Mexico, and Texas would receive the greatest increases in Title I funding in the first year of implementing the new formula. However, several states would lose Title I dollars in the first year of the new formula. These states include New Hampshire, North Dakota, and Wyoming. We present state-level results for all 50 states and the District of Columbia in Figure 2 (see PDF). Year-to-year losses are capped at 15 percent based on hold harmless provisions that are consistent with current provisions of Title I. Hold harmless provisions ensure that districts do not experience substantial drops in Title I funding from the previous year, although the actual hold harmless amounts vary according to the child poverty rate in districts.
Miller and Brown’s proposed formula does a much better job of targeting resources to the districts that need them the most. However, the transition period to the new formula would likely cause quite a bit of political pushback. Over the first year of implementing the new formula, several districts will lose out—particularly those that previously received more than their fair share of existing Title I dollars—and it might take several years for them to adjust to reductions in these funds.
To make this formula change more politically palatable, Miller and Brown also proposed an equity fund that would cover the losses for districts in the first several years of transitioning to the new formula. No districts would lose funding if they were eligible for funding before, even as districts serving high concentrations of poor students would gain funding.
We are not the first to note that the Title I program has struggled to provide resources fairly and to shift more resources to the most disadvantaged students. In their 1969 report on Title I, Ruby Martin and Phyllis McClure showed that Title I dollars were being used on activities that did not serve students who were the intended audience of Title I. Goodwin Liu described how the current formulas actually provide lower-poverty states with more Title I dollars per poor student than for higher-poverty states. More recently, David Cohen and Susan Moffitt have also argued that political pressures pushed the Title I program to spend money across a wide range of districts, rather than targeting the most disadvantaged places.
Each of the current formulas has suffered from one or more weaknesses, which Miller and Brown address in their proposed formula. They identified several formula flaws, building on the work of Goodwin Liu. In each case, their proposed formula would substitute new measures to address these issues. First, the current formulas do not focus on concentrations of poverty; rather, they consider both concentrations of poverty and absolute numbers of students from poor families. This means that Title I does not adequately serve students in concentrated poverty and tends to benefit very large districts over smaller ones. The proposed formula would focus only on concentrated poverty.
Second, the current formulas also benefit states with more children in each household, whether or not the states serve more children in their public schools. The proposed formula would measure states’ fiscal effort—how much they spend on education given their resources—based on total dollars rather than per-capita dollars. Third, the current formula does not adequately account for differences in education costs across districts or across states, as they use current state expenditures to measure costs. This means that states with more property wealth could look like they face higher education costs just because they spend more per student. The proposed formula would include better measures for differences in the cost of living across districts. All in all, the new formula removes these flaws and more equitably distributes resources.
Sen. Alexander’s recent proposal for a new framework for the Elementary and Secondary Education Act would leave the current Title I formulas intact or potentially eliminate them entirely. In the latter case, states could distribute Title I dollars to districts through simple per-pupil allocations based on the number of poor students they serve. This would effectively eliminate any consideration of the district’s concentration of poverty and thus fail to provide sufficient Title I dollars to the students who need it most.
We are pleased that Congress is working on improving the Elementary and Secondary Education Act, and we hope that members take this opportunity to ensure that the most economically disadvantaged students receive the support they need to be successful.
Robert Hanna is a Senior Policy Analyst at American Progress.