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Money Woes Jeopardize Schoolwide Chapter 1 Projects

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WASHINGTON--Some school districts coping with shrinking budgets are facing the prospect of having to discontinue schoolwide projects under Chapter 1 because they cannot meet strict requirements that state and local funding for such schools be maintained year to year.

Under such projects, federal aid is used to upgrade an entire school, not just to serve strictly children eligible for Chapter 1.

Mary Jean LeTendre, the director of compensatory-education programs at the Education Department, said she does not know how many of more than 600 schools currently implementing schoolwide projects are facing a loss of federal funds.

However, she said, "when we get calls from three or four states, I know there's a pretty big problem.''

In 1988, the Congress made it easier to operate schoolwide projects by dropping a requirement that districts provide extra funding to such schools.

Schools where low-income children make up at least 75 percent of enrollment are eligible for the projects.

Lawmakers responded to a growing consensus among education experts that holistic change and improvement in a school is the most promising approach for disadvantaged children. By 1991, the number of schoolwide projects had tripled.

However, responding to some lawmakers' fears that the greater latitude could spur abuses, the Congress imposed stricter "maintenance of effort'' rules on participating schools.

Maintenance-of-effort rules, which apply to all Chapter 1 schools, aim to ensure that federal funds are used to enhance services for disadvantaged children, not to pay for services that had previously been purchased with state or local funds.

Budget Cuts

Under the general rules, a school is eligible for Chapter 1 funds in the school year beginning in September 1992 if state and local funding per pupil in that school during the year that started in 1990 is at least 90 percent of what was spent in the year that started in 1989.

But for a schoolwide project to continue this fall, the school must show that state and local per-pupil funding in the current school year--the one that began in 1991--fully equals the prior year's funding.

This means that a school whose budget was cut even slightly this year could miss the target and be prevented from continuing as a schoolwide project in the fall. So could a school that received the same amount of money but experienced an enrollment increase.

"Given the current fiscal crisis in many states,'' Ms. LeTendre said, "a large number of schools would have trouble meeting the 100 percent requirement.''

Milton Matthews, the state Chapter 1 coordinator in Mississippi, said several schools in his state had to discontinue schoolwide projects last fall, one of them due to a 14-student enrollment increase. He said about 15 more followed suit during the school year, for fear that they would not meet the requirements in the fall of 1992 and would be audited.

Bruce Hunter, an associate executive director of the American Association of School Administrators, said he began lobbying for a legislative change after the superintendent of schools in Mobile, Ala., complained that he would have to cut funding to some schools if other schools were to continue schoolwide projects.

Carley Ochoa, the Chapter 1 coordinator in the Riverside (Calif.) Unified School District, said her district cut $8 million from its $150-million budget this year, and is bracing for bigger cuts next year.

"I'd be surprised if anybody [in California] could maintain their schools at 100 percent,'' she said.

'Two Moving Targets'

The predicament is worsened, Mr. Matthews said, by schools' need to plan their 1992-93 projects before they know with certainty both how much money per pupil will have been spent in the current school year and how much money will be in their budgets next year.

"We have two moving targets, both of which become erratic in recessionary times,'' he said.

Calls from worried administrators spurred lawmakers to add a provision lifting the stricter rules to an education-reform bill approved by the House Education and Labor Committee last month. Key senators have also agreed to back the change.

But educators fear they will have to discontinue promising programs if the bill does not become law. And some observers predict President Bush will veto it. (See Education Week, May 27, 1992.)

"I'm afraid for people who had faith this would be corrected,'' Mr. Hunter said.

The Congress is likely to consider the issue further next year, when Chapter 1 is to be reauthorized.

In another Chapter 1 development, the Education Department last week published regulations that would allow the "incidental'' participation of noneligible children in Chapter 1 programs.

The proposal, which responds to requests from educators for more flexibility, has been expected since department officials previewed it last year. (See Education Week, Jan. 8, 1992.)

Under the new rules, ineligible students could legally benefit if a school's program is designed for the Chapter 1 students, their services are not diminished, the cost of providing the services is not increased, and eligible children are not excluded because of the change.

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