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Faulty Assumption Means Title I Formula Won't Kick In

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When the popular Title I compensatory-education program was reauthorized last year, the Clinton administration and many lawmakers wanted to funnel more money to the neediest students and schools.

But the program was so popular in part because more than 90 percent of the nation's school districts received some Title I dollars, and it quickly became apparent that Congress would not approve a new formula that cut funding to many districts.

So lawmakers enacted a provision that would essentially distribute all money beyond the fiscal 1995 appropriation of $6.7 billion through two different mechanisms that target high-poverty areas. (See Education Week, Sept. 28, 1994.)

That decision was based on the assumption that spending on the program would increase each year, as it has for the past decade.

But Republicans captured control of Congress last fall and embarked on an ambitious effort to cut federal spending and balance the budget. Title I has not been immune; the appropriations bill for fiscal 1996 passed by the House would cut its funding by $1.1 billion, and the Senate version by $679 million.

And the calculation that went into creating the new formula, which seemed reasonable at the time in light of the program's popularity and funding history, appears faulty in retrospect.

"It was a politically expedient assumption that didn't hold water," said Michael Casserly, the executive director of the Council of the Great City Schools. "The whole situation drips with irony and politics."

"This formula assumes you get a half-billion more dollars each year, or else it doesn't work," agreed Bruce Hunter, a senior associate executive director of the American Association of School Administrators. "I remember saying that to people at the time and got these blank stares as if God had ordained it. Well, [Speaker of the House] Newt Gingrich has ordained something else."

Politics and Principle

Created in 1965 as the flagship program of the Elementary and Secondary Education Act, Title I finances remedial mathematics and reading instruction for millions of poor and disadvantaged students.

But research has shown that most Title I programs do not boost the performance of disadvantaged students enough to close the gap between those low achievers and their more advantaged peers. During the reauthorization debate, even Title I's strongest supporters urged lawmakers to reform the program. (See Education Week, Nov. 24, 1993.)

The Clinton administration sought to limit the number of eligible schools, encourage schoolwide use of funding, and require states and schools to set challenging academic standards for Title I students. Coupling more targeted funding with programmatic changes would be the best way to improve Title I, administration officials and many child advocates argued.

But even lawmakers sympathetic to that argument found themselves torn between politics and principle.

In the end, Congress adopted most of the programmatic changes recommended by the administration--some of them major ones.

But after months of negotiation, the new law eliminated from Title I only a handful of school districts with very few poor students and concentrated only funding increases on the poorest areas. In addition, eligible districts were guaranteed at least 85 percent of their 1994 funding in 1995. And in subsequent years, each district was guaranteed at least as much as it received the previous year.

"Part of the reason the votes weren't there [to target money more narrowly] was you had to put people in the position of going back home and talking to parents and students and saying, 'Yes, we know you're needy but you're not as needy as the guys down the street,"' recalled one aide who worked on the formula.

"It basically came down to, 'What do we need to do to get this bill passed?"' he said.

The bottom line is that if Congress appropriates less overall for the program than in the previous year, all eligible districts take a proportional funding cut, regardless of relative need.

A Tale of Two Programs

At the same time lawmakers were revamping Title I, they were also rewriting the formula for federal impact aid--with quite different assumptions.

Impact aid goes to school districts that theoretically lose tax revenue due to the presence of federal property and workers. It helps pay for the education of children from military families and children living in federally subsidized housing or on Indian reservations.

With about 2,600 "impacted" schools in the country and a fiscal 1993 funding level of $750 million, the program lacked the broad-based support of Title I. Its existence has been tenuous since the 1988 ESEA reauthorization.

In fact, some lawmakers told the National Association of Federally Impacted Schools that the lobbying group had to propose an improved funding formula that would gain the backing of the majority of its members if it wanted to save the program.

Nafis proposed jettisoning a complicated system that sorted students into "A" and "B" categories and assigned districts to multiple funding categories based on those counts. Instead, a single formula now "weights" each federally connected student according to his perceived educational burden and bases each district's allocation on its total "weighted student units." Other provisions guarantee a larger share of funding for the districts most heavily dependent on impact aid.

"To save the program," said John Forkenbrock, the executive director of nafis, "we had to interject a need component."

The formula was also designed to function at any funding level. In 1988, lawmakers had made the same mistake that they made last year with Title I, and impact-aid formula changes enacted that year never took effect because appropriations decreased.

Hanging Together

"We put in a formula that, for the first time ... provided that a district's financial need was a factor, and that need factor comes into play if appropriations are not sufficient," said Jeff McFarland, a former House aide. "The program has not been fully funded since 1966, and we knew that would be the case."

Hundreds of school districts found their impact aid reduced this fall, when the new formula was used for the first time. Others gained funding.

The result was foreseeable. But save for a few disgruntled superintendents, nafis rallied behind the proposal.

"We supported it in the context of trying to hang together with everyone else," said Donald Calland, the assistant superintendent of the Fallbrook Union High School District in Fallbrook, Calif., which has lost nearly 25 percent of its 1993 allocation of $220,000.

"We realize the economics of today, and we didn't want the organization to fall apart," he said.

Brewing Battle?

Observers say that Title I's constituency is too diverse to achieve such a consensus on a formula change that would produce clear-cut winners and losers.

"The lesson [of the 1994 formula fight] is that additional targeting on areas of unusual concentrations of poverty takes more effort and more political savvy than was pumped into this last one," Mr. Casserly of the Council of the Great City Schools, which represents the country's biggest urban districts, said. "You've got an enormous number of obstacles ... to move the funds even a little bit."

But the specter of another formula fight has been raised.

The report accompanying the House version of the 1996 education appropriations bill indicates that the subcommittee that drafted it would have liked to distribute some funding under the new, more targeted formula.

Rep. John Edward Porter, R-Ill., who chairs the subcommittee, confirmed that he tried to persuade Rep. Bill Goodling, R-Pa., who chairs the committee with jurisdiction over education programs, to change the Title I law to allow this.

Mr. Goodling, who declined to be interviewed, refused Mr. Porter's request. The Pennsylvanian represents a district that would not fare particularly well under a more targeted formula. But Mr. Porter said he will continue to press the issue.

"I think we're past that," Mr. Porter said, expressing hope that parochialism may give way under new budgetary realities. "We're in an entirely different funding cycle. We're ramping down spending."

One Title I advocate remarked, "He may be the only one that believes that."

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