Quality Counts 2017: Building on ESSA's K-12 Foundation Measured Progress

Funding Twists, Tight Budgets Loom for States at ESSA's Debut

Though it's not a spending measure, there are important new fiscal elements to the revised K-12 statute.

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Changes to the way spending on schools must be reported under the Every Student Succeeds Act —along with a dramatic political fight in Washington about proper use of federal money in schools—are part of the picture as schools prepare for the new environment under ESSA come the 2017-18 school year.

With the election of Donald Trump to the presidency and Republicans' continued control of Congress for at least the next two years, the prospects for increased education funding are not stellar in the near future.

As an authorization bill, ESSA did not by itself increase or decrease the amount of money available for various federal education programs. That job is up to the lawmakers in charge of appropriations, subject to approval by the full Congress and the president. Meanwhile, budget caps are still in place for federal spending after years of acrimonious spending negotiations (including the portions of the budget that pays for education). But with unified control of Congress and the White House, Republicans are in a position to significantly recast the federal budget.

Last month, Congress passed and President Barack Obama signed a continuing resolution for the federal budget that funds the government through April 28. The resolution does not make significant changes to K-12 funding and puts off longer-term education spending issues until later this year.

In the near future, it will likely be "tough to get additional money" from Congress for major education programs that undergird ESSA, said Noelle Ellerson Ng, the associate executive director of AASA, the School Superintendents Association. It's possible Congress could cut overall domestic spending, creating competition for funding among programs within the Education Department, as well as between the department and other domestic agencies, she said.

"I don't see Congress coughing up the money to support the bill they passed a year ago," Ellerson Ng said. "I think it's a missed opportunity because there was great, strong, bipartisan work to move a reauthorization of ESEA."

Consolidating Programs

Digging deeper, a part of ESSA that consolidates many federal programs into block grants for states and covers areas like the arts and education technology is authorized for $1.6 billion in the law. But in budget requests and bills from President Barack Obama and House and Senate lawmakers who deal with appropriations, that section of the law (called the Student Support and Academic Enrichment Grant) has fallen far short of the authorized amount.

That prospect has worried many educators and advocates for a variety of educational interests, from STEM groups to organizations promoting the arts. For example, under the Senate proposal to fund that section of the law at $300 million, many districts might get only $7,000 to $8,000 to spend in their block grants, a small sum for most districts.

Priorities for ESSA Funding

In a September 2016 survey, district leaders identified the areas they would be most likely to fund using money from the Student Support and Academic Enrichment Grant, a new block grant created under ESSA. More than half of survey respondents (57 percent) reported they would be most likely to devote the funding to efforts to increase students’ access to STEM programs.

In a September 2016 survey conducted by the Education Week Research Center, 57 percent of district leaders said they'd be most likely to spend any such block grant on increasing students' access to STEM programs.

And although a weighted-student funding pilot included in ESSA got a decent amount of attention when the bill passed just over a year ago, the Education Department reported that as of November, there was still no such pilot program for weighted funding ready for districts to apply to.

Uncertainty for a Touchy Rule

One of the sharpest debates about school funding under ESSA took on added complexity when Trump was elected, and was still roiling at the time this report went to press.

The Obama Education Department had proposed regulations designed to shift up to $2 billion in state and local education funding to Title I schools, meaning those with a relatively high share of low-income students. The proposal had four different options for districts to comply with the part of the law requiring federal aid to supplement, not supplant state and local K-12 money, and the department said its proposal would ensure that needy students got a bigger and fairer share of the pie.

But Republicans in Congress, teachers' unions, and state and district education associations heavily criticized the draft rules as Washington overreach, impractical, and potentially harmful.

With Trump's victory, the prospects for those Obama proposals dimmed further. Sen. Lamar Alexander, R-Tenn., the chairman of the Senate education committee, said soon after the election that the Obama proposals for ESSA spending would be killed off. Yet even if that were to happen, federal officials eventually would need to settle on a way of handling oversight of the supplemental-money requirement.

The draft rules' fate remained unclear as of press time for Quality Counts.

Separately, ESSA itself contains potentially significant financial flexibility for districts in a few ways. The statutory language covering the supplemental-money rule says that states no longer have to itemize their costs to show that federal money is being used on top of state and local money for schools.

And under the law, states now have the power to grant districts waivers of the requirement that only schools in which at least 40 percent of students are from low-income backgrounds can use Title I aid (those dollars earmarked for disadvantaged students) for schoolwide purposes.

Per-Pupil Spending Transparency

One important shift in ESSA doesn't focus exclusively on federal money, said Michael Griffith, an independent school finance consultant: the requirement that states must report per-pupil spending at the state, district, and school levels on their public report cards.

"I think at the district level, [people] understand how big a deal that is, but people at the state level don't get that as much," Griffith said. "You ask state policymakers now: Will that cause an issue for districts? They say, 'No, they probably already budget that way anyway.' The answer is, they don't budget that way."

Another potential difficulty for states is what exactly is included in those per-pupil spending figures.

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Various districts might make very different decisions on that score that aren't immediately obvious to parents, policymakers, and others who see and react to the numbers, said Nora Gordon, an associate professor of public policy at Georgetown University who studies school finance.

"You know that people are going to look at that stuff nationally. They're going to look at districts across states," Gordon said.

And given that Republicans will now control the presidency as well as Congress, it's unlikely that federal lawmakers and other Washington officials will show interest anytime soon in dictating requirements on that issue to state and local leaders, Gordon added.

Vol. 36, Issue 16, Pages 14-16

Published in Print: January 4, 2017, as Funding Twists, Tight Budgets Loom for States at ESSA's Debut
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