Verbatim Mac

Solvency – Meta reforms

Formula reforms – general

Formula reforms – multiple reforms improve resource allocation, enhance forecasting future allocation

Gordon, non-resident Senior Fellow at the Brookings, 2016 (Nora, “Increasing Targeting, Flexibility, and Transparency in Title I of the Elementary and Secondary Education Act to Help Disadvantaged Students”, Brookings, March 2016, https://www.brookings.edu/wp-content/uploads/2016/07/Full-Paper.pdf, gdi-JM)

Current law delivers (and ESSA would continue to deliver) Title I, Part A via the four formulas described in table 1, and is often criticized as lacking in transparency and progressivity (e.g., Miller 2009). I propose that we greatly simplify two of these formulas (Basic Grants and Targeted Grants) and eliminate the remaining two (Concentration Grants and Education Finance Incentive Grants). The resulting allocation of funds would better target funds to districts with greater shares of children in poverty. It would have the additional benefit of providing a more transparent framework for forecasting future allocations, and exposing the distributional effects of any proposed formula changes in subsequent reauthorizations. Specifically, formula reform should have the following components. 1. Retain Basic Grants. Introduce language to ensure that Basic Grants consume no more than half the total appropriation for Title I, Part A (they currently allocate 45 percent). Change eligibility requirements so only school districts with at least 5 percent of children in poverty are eligible, as opposed to the current formula that permits districts with at least 2 percent of children in poverty or ten poor children to collect funds. The national child poverty rate in 2014 was 22 percent, and the median school district had 19 percent of children eligible for Title I, so this change is quite modest. 2. Eliminate Concentration Grants. The existing Concentration Grants formula is exactly the same as the formula for Basic Grants, with just one difference: the eligibility requirements. Concentration Grants are awarded to all districts with at least 6,500 eligible children or at least 15 percent children eligible; two-thirds of all districts are eligible for these grants. I propose eliminating this formula from the law and directing the 9 percent of Title I, Part A funds to LEAs allocated via Concentration Grants in 2015 to the modified Targeted Grants formula below. 3. Eliminate Education Finance Incentive Grants. Education Finance Incentive Grants have the most complicated formula of the four Title I grants. These grants are a well- intentioned attempt to reward states for having a greater ratio of per-pupil spending to per-capita income (effort), and lower variance in per-pupil spending across districts (equity), but they have several critical flaws. First, even if Congress could get states to spend more and try to equalize fully, this could inadvertently penalize efficient spending, or encourage school finance regimes that result in a “race to the bottom.” Second, effort and equity are functions of budget decisions at the state and local levels; as difficult as it would be to incentivize state legislatures with this opaque formula, motivating the local school boards or voters who must approve tax changes is unrealistic. Finally, though political decisions affect equity and effort, so do other factors that cannot be readily manipulated by education policy (e.g., longstanding patterns of economic residential segregation within a state), so the formula bestows some rewards arbitrarily. Similar to my proposal for Concentration Grants, I propose to remove the Education Finance Incentive Grants funding mechanism from the law and redirect its budget share (nearly a quarter of Title I, Part A funds to LEAs in 2015) to Targeted Grants. 4. Use freed-up funds to expand Targeted Grants, using poverty rates , rather than counts, to allocate those funds. The current law calculates weights per eligible student based on poverty rates, then again using poverty counts, and chooses whichever calculation is most beneficial to each district. This procedure is referred to as “number weighting.” In practice, with a fixed appropriation to distribute, this directs funds toward districts with a large number, but not share, of poor kids and away from smaller, high poverty– share districts. In July 2011 Representative Glenn Thompson (R-PA) sought to address this with his All Children are Equal (ACE) Act. ESSA flags number weighting in particular for study by the Institute of Education Sciences. I propose to eliminate number weighting in Targeted Grants and apply weights to all districts based on poverty rates. (Basic Grants do not use weights so they would be unaffected.) 5. Remove state-level spending per pupil from all remaining formulas. Language in Section 1303 of ESSA specifies that eligible children are to be multiplied by “40 percent of the average per-pupil expenditure in the State, except that the amount determined under this subparagraph shall not be less than 32 percent, or more than 48 percent, of the average per-pupil expenditure in the United States.” The defense for this method is that teachers cost more in states with higher costs of living, and that the spending per pupil is a proxy for aggregate state-level differences in teacher salaries. In practice, states with greater spending per pupil (and therefore higher Title I allocations, all else equal) have less poverty; the correlation between state spending per pupil and the share of children eligible in the state is -0.19. I propose to replace the language above with language to multiply weighted eligible children by “6 percent of the national average per-pupil current expenditure in the United States.” Though 6 percent may seem a major cut from the 40 percent (of state spending) in current law, note that Congress now funds Basic Grants at about 14 percent of what full funding would require. At current levels, using approximately this factor would fully fund the proposed program (using all proposed reforms), entailing no ratable reductions for at least for one year. 6. Eliminate the small state minimum. This is the most politically visible aspect of the formula changes and would generate major reductions in allocations for Alaska, Hawaii, Montana, North Dakota, Vermont, and Wyoming, bringing their allocations per eligible child in line with the rest of the country (see figures 1 and 2). 7. Phase in the changes above over a four-year period using hold harmless, then eliminate hold harmless going forward. Hold districts harmless at 80 percent (regardless of counts or rates of eligible children in the district) of FY2015 allocation levels in year one, at 50 percent in year two, and at 20 percent in year three. By year four, district allocations will be calculated using the formula, with no role for previous funding levels. (One option here would be to allow federal or state waivers for districts who present evidence of short- term demographic shocks and who expect enrollments to return.) During the transition, hold district- but not state- level funding harmless.

The net impact of this set of formula reforms yields major distributional improvements: first, per-eligible-pupil Title I funds will increase more rapidly with poverty rates than they do under the current regime (see figure 2). Second, the variance in per-eligible-pupil allocations conditional on poverty rates would be much reduced—that is, similar places would be treated equally under the law. And finally, the allocation of funds will be more transparent and predictable. Though most individual school districts not affected by the small state minimum would experience relatively limited changes in their allocation per eligible individual, the changes should be phased in via the hold harmless schedule outlined above over the four-year period of ESSA to allow districts time to plan and fulfill short-run contractual obligations. That is, the new formulas would go into use immediately, but hold harmless would slow their implementation. Figure 3 shows the state- level allocation of funds under the proposed formula. (These simulated allocations assume constant demographics and appropriations, and are based on no hold harmless; this would summarize allocations four years from implementation of the proposal, once changes were fully phased in.)

Formula reforms – increase state funding

Formula reforms result in tradeoffs within funding – states increase in funding

Gordon, non-resident Senior Fellow at the Brookings, 2016 (Nora, “Increasing Targeting, Flexibility, and Transparency in Title I of the Elementary and Secondary Education Act to Help Disadvantaged Students”, Brookings, March 2016, https://www.brookings.edu/wp-content/uploads/2016/07/Full-Paper.pdf, gdi-JM)

Politically, it is natural to measure the impact of the changes on allocations at the level of a state or congressional district. These proposals assume no change in the total amount appropriated, so any increases in some agencies’ allocations come from reductions in the allocations of others. Thirty-six states would gain Title I funds per eligible child. The median “winner” state would gain about $300 per eligible, a 29 percent increase in funds. Mississippi would have the greatest increase, with a 64 percent increase of about $700 per eligible.

Formula reforms – multiple types of districts and schools benefit

Complexity of formulas disadvantage small state, mid sized cities, areas with concentrated poverty – create tradeoffs because Title I underfunded now

Camera and Cook, education reporter at U.S. News & World Report, 16 (Lauren and Lindsey, "Title I: Rich Schools Districts Get Millions Meant for Poor Kids" US News, June 1 2016, https://www.usnews.com/news/articles/2016-06-01/title-i-rich-school-districts-get-millions-in-federal-money-meant-for-poor-kids, Accessed July 4th 2017, GDI AC

Title I, the largest federal K-12 program, was how Johnson planned to do that. And since children from poor families often enter schools with a host of more-costly educational needs – from less exposure to reading and math to social, emotional and nutritional problems – it's important the limited federal dollars are funneled to those who need them most, he reasoned. How is it then that a school district like Nottoway, with a child poverty rate of 30 percent, receives so much less in federal support than Fairfax, one of the wealthiest districts in the country? The answer lies in a complicated and outdated formula that's used to distribute the Title I money – a formula that's resulted in a series of significant funding discrepancies that can shortchange school districts with high concentrations of poverty, and benefit larger districts and big urban areas instead of poorer, rural districts and small cities. "The places that are less poor are getting more money per poor kid," says Nora Gordon, an associate professor at the McCourt School of Public Policy at Georgetown University who recently conducted an analysis of the Title I program for The Hamilton Project. "This is what happens when you have four different formulas that are very opaque and interact in different ways. You can have a lot of things in the law that seem like a good idea, but the net result is not a progressive one." In fact, the net result often means that in addition to the formula overlooking poor rural school districts, like Nottoway, it also shortchanges smaller high-poverty urban districts, like Flint, Michigan, which similarly faces challenges that affluent districts often don't, such as dated facilities and teacher shortages. Discrepancies are also visible in the amount of Title I money districts receive per poor child. Virginia’s Mecklenburg County, for example, with a child poverty rate of 30 percent, receives $1,000 per poor student through Title I – the same amount as poor students in York County, where the child poverty rate is less than 6 percent. For more information about your school district, use our interactive table. To be sure, when policymakers crafted the current formula in 2001 as part of the No Child Left Behind Act, they did so intending to correct a formula that was directing even fewer dollars to concentrations of poor students than it does today – one that allowed Claiborne Parish in Louisiana, with a child poverty rate of 36 percent, to infamously use its Title I funds to build not one, but two Olympic-sized swimming pools for students. But the formula has proven a sort of intractable beast – one that politicians and policymakers have had little success altering, despite its glaring shortcomings. "In the context of deeply inadequate funding overall, formula changes are always seen as a zero sum game," says Michael Dannenberg, director of strategic initiatives for policy at Education Reform Now. "More money for one district or state is coming at the expense of needy children in someone else's district or state." "Politically it's very hard," he says. "It's not impossible, but it's very hard." Dannenberg would know. He first tried – and failed – to change the formula while working for former Sen. Clairborne Pell of Rhode Island. Years later, as a senior policy adviser for Sen. Edward Kennedy of Massachusetts, Dannenberg was part of the push to update the formula as part of No Child Left Behind. That version is still used today. "To be clear, the wealthiest school districts are getting more per Title I child than high poverty school districts," he says. "But the effort to improve targeting of Title I funding [to concentrations of poor students] was realized in part as a result of the No Child Left Behind Act. We had a degree of success, but not nearly as much as one would hope." Still, the changes weren't insignificant. For example, from 2002, when the law went into effect, through 2010, data show that roughly $6 billion in Title I funding was directed to high-poverty school districts that otherwise wouldn't have been under the old formula, according to data from the Education Department. "That's a lot of bake sales," says Dannenberg. A Formulaic Failure? The formula, which is really four separate formulas rolled into one, is intended to send more money to poor districts. But it leaves much to be desired, many education policy experts say, and one of its biggest criticisms is that it spreads dollars too thin. According to the Center for American Progress, a left-leaning think-tank based in Washington, 67 percent of schools get Title I funding despite the fact that only half have relatively high concentrations of poverty. In Virginia alone, 134 districts get a slice of the Title I pie despite only 79 having higher than average levels of concentrated poverty. That's because districts can tap the federal purse even if they serve only a handful of low-income students. Falls Church City Public Schools, for example, another manicured Virginia district just outside of Washington, receives money for its 76 poor children even though the child-poverty rate there is less than 3 percent. "Title I was never meant to be general education aid," says Liz King, senior policy analyst and director of education policy at The Conference on Civil and Human Rights. "It was meant to be targeted to serve students in concentrations of poverty." The formula, however, places more weight on the number of poor students in a district than on the concentration of poor children in a district – one of the biggest reasons places like Fairfax, at 195,000 students big, gets as much money as it does. In addition, the formula directs extra funding to states with small populations – an attempt to channel more money to rural states, like New Mexico, that often depend on federal support for things like attracting and retaining teachers to remote schools. But wealthy states like Delaware and Connecticut have small populations because they are geographically small, and therefore qualify for the additional funds despite not needing them. Because of this fluke of the law, these small states with lower child poverty rates receive more Title I funds per poor child than poor states. Find them in the top left quadrant of the scatterplot. Meanwhile, many high poverty, rural states that don’t benefit from this rule or the prioritization of large districts. They appear in the bottom right quadrant of the scatterplot because they have a high child poverty rate, but receive less money per poor child. Another oft-cited critique of the formula is that it rewards states and districts for investing more of their own dollars in education. While the goal is to incentivize states to spend more themselves, it tends to compound existing inequalities since wealthier states and districts tend to invest more heavily in education anyway. Mississippi best illustrates this dilemma. Especially in the state's Delta region, where poverty rates soar up to 60 percent, local revenue rarely breaks $1 million, and in some cases schools use their Title I money for bare necessities, like paying the electric and water bills. "We don't want to allow states to roll back their spending," says Gordon. "But the reason why Mississippi is getting so little money per poor pupil is because they are spending very little money."

Formula reforms – teacher quality

***Current Title I funding is too complicated, the plan allows for proper Title I funding that supports students and teachers.

Boser & Brown, 15, Vice President of Education Policy at American Progress [Ulrich & Catherine; 7-7-2015, American Progress "5 Key Principles to Guide Consideration of any ESEA Title I Formula Change," Center for American Progress, https://www.americanprogress.org/issues/education/reports/2015/07/07/116696/5-key-principles-to-guide-consideration-of-any-esea-title-i-formula-change/ ; RJC]

Last year, the federal government spent more than $14 billion to help educate low-income students as part of Title I, Part A, of the Elementary and Secondary Education Act, or ESEA. For schools, particularly low-income schools, these federal investments make a huge difference. If Title I was used to only fund teachers, for instance, it would support the jobs of more than 200,000 educators.

But while federal education dollars bring many benefits for students, they are distributed in a way that is deeply unfair both between and within states. This unfairness stems from the following flaws in the allocation formula.

It is overly complex and opaque. Title I today is allocated based on four separate formulas with conflicting incentives. State and local legislators and education officials have almost no way to know how much their allocation will change from year to year due to changes in district or state policy, population, or distribution of students living in poverty. This lack of transparency severally limits the formula from serving as an incentive for policy change or from enabling states and districts to plan for the future.

It sends more money to wealthier states. Wealthier states have historically invested more heavily in education, and those investments are favored by the current Title I formula. This results in a system that compounds existing inequities by giving more to the haves than to the have nots. Furthermore, the formula’s emphasis on the number of children who live in poverty means that more affluent districts that serve only a handful of such children receive Title I dollars. This dilutes the pool, leaving fewer resources for those places with more concentrated poverty.

It shows clear bias against rural states and mid-sized cities. As a result of this distortion, the so-called small state minimum, which gives more money to smaller states for no other reason than their small population, “states with small populations and low concentrations of poor children receive radically larger grants on a per-poor-child basis than states with larger populations, including those with substantial rural poverty.” What’s more, the formula prioritizes larger districts. Detroit, for instance, gets much more per student than Flint, Michigan, and Los Angeles gets more than Sacramento, California, due to the formula’s heavy weighting of large communities over mid-sized and rural communities.

To be clear, there is no perfect school funding formula. By definition, formulas distribute limited pots of money among diverse schools and districts, and most districts, if not all, could benefit from more resources. Formula decisions, in other words, force difficult trade-offs. Should the formula spread the funding to more students or leverage it most heavily among the neediest? Should it reward states and communities for investing in education, or should it compensate for the fact that they have not made such investments, which has real and often dire consequences for the students living in those communities? Should the formula fund communities with large concentrations of poor students or fund poor students in more socioeconomically diverse communities? These are difficult questions without easy answers.

The goal for every member of Congress—when considering modifying the Title I formula—should be to maximize public utility or the public good and to find the trade-off point where the greatest number of students receive the maximum boost to their life prospects.