House ESEA Draft Would Loosen Strings on K-12 Aid

A House draft bill on reauthorization of the Elementary and Secondary Education Act would make subtle—but important—changes to the federal role in overseeing how districts spend their cash, including handing local officials considerably more say over how they allocate money aimed at special populations of students.

The draft bill, which would carve out a much smaller role for the federal government in testing and school improvement, also seeks to rein in future funding increases for the U.S. Department of Education. In a controversial move, it would scrap a key provision of the current law known as “maintenance of effort,” which requires states to keep their own funding for education at a certain level in order to tap federal Title I funds. And it would give districts leeway in spending on English-learners, troubled youths, and several other groups of students.

Advocates for districts already have raised red flags about the proposed change to maintenance of effort, saying it could lead to major cuts to K-12 education at the local level, particularly for the poorest children.

But some analysts welcome the change, arguing the current provision penalizes districts that want to look for savings.

Maintenance of effort requires districts to hold spending at 90 percent of the previous year’s level, or risk losing Title I money, which is aimed at helping educate disadvantaged children. The language is meant to make sure that federal money is a bonus at the local level, and isn’t used to fill holes. Districts hit by tough economic times can apply for waivers to the Education Department.

Changing the Rules

Under the draft put forth by Rep. John Kline, R-Minn., the chairman of the House Education and the Workforce Committee, districts could cut their K-12 budgets without having to forgo any federal money. By contrast, an ESEA reauthorization bill approved by the Senate Health, Education, Labor, and Pensions Committee last fall would keep the current maintenance-of-effort rules in place.

The House proposal has some advocates worried, particularly since states are still in the midst of a fiscal squeeze, said Mary Kusler, the director of government relations for the 3.2 million-member National Education Association.

“What we’ve seen in the current economic situation is that states are cutting K-12 education. Schools are being forced to cut back on the arts and music and after-school activities,” she said. “We know that’s already happening, and if this goes through, it just becomes a free-for-all.”

The American Association of School Administrators and the National School Boards Association are also sounding the alarm bell.

“The total elimination of maintenance of effort gives everyone an opportunity to significantly reduce investments in education,” said Reginald Felton, the assistant executive director of the NSBA, based in Alexandria, Va. “I don’t think that’s really where we want to go.” The organization might be open to some loosening of the current requirement for districts in economic distress, he said.

But a spokeswoman for Rep. Kline said the change as proposed would help curb federal overreach in local decisionmaking.

“Republicans believe we must streamline and reduce the federal role in education,” said the spokeswoman, Alexandra Sollberger, in an e-mail. “Dictating state and local decisions, particularly those related to budgeting and spending of state and local resources, represents unnecessary federal overreach. ... The very premise of the maintenance-of-effort provision is flawed—it assumes higher levels of funding guarantees improved student learning, but we all know this concept has been disproven time and time again.”

Impact on Decisions

Some analysts agree. They say the current maintenance-of-effort requirement penalizes districts that want to trim their budgets.

“Districts are actively disincentivized from finding more cost-efficient ways of delivering services under Title I,” Christopher A. Tessone, the director of finance and operations at the Thomas B. Fordham Institute in Washington, wrote in an e-mail.

Districts that need to make quick spending decisions may not want to roll the dice with a waiver request, he added.

“Budget pressures may push folks to consider a waiver request, but it’s not hard to understand why no one wants to pull the trigger on more cost-effective plans in the absence of a budget crisis and hope the auditor and [the department] go along with it,” he said.

Raegen Miller, the associate director for education research at the Center for American Progress, a think tank in Washington, has studied maintenance of effort. He argued that under current law, districts already can cut their budgets up to 10 percent without risking federal funding because they only have to maintain funding at 90 percent under the current language. He worries that states and municipalities may use the change to shift funding to other areas.

One question going forward is whether the move to eliminate maintenance of effort for Title I eventually could lead to eliminating the provision for other programs, including special education, which has a similar requirement.

“Is this something that’s being done for Title I as a stand-alone” or could the Individuals with Disabilities Education Act also be affected? asked Michael Griffith, a senior policy analyst with the Education Commission of the States, in Denver.

Making a similar change on special education could prove much more politically difficult, he said. “If we have anything that’s the third rail in education, it’s IDEA,” he said.

The House draft also seeks to put restrictions on just how fast federal spending on K-12 education can rise. It would cap spending on Title I and other programs at current levels and calls for spending on education to increase only at the Consumer Price Index. The Senate bill doesn’t specify funding levels.

If the House language were to become law, Congress wouldn’t have to abide by the restriction. In fact, lawmakers on the appropriations committees—which oversee spending—often blow past such limits.

But, even though the language isn’t binding, it could still make it tougher for advocates to persuade Congress to increase funding substantially, said Joel Packer, the executive director of the Committee for Education Funding, a lobbying coalition in Washington.

“It’s not impossible” to get bigger increases, “but it [would] make it much tougher,” he said. The small increases proposed may not be enough, since the percentage of children in poverty, who are served by programs like Title I, is on the rise, he said. The language “ignores that there are more kids in poverty and growing enrollment.”

But Ms. Sollberger from Rep. Kline’s office said the provision is a “responsible policy that takes into account our nation’s fiscal realities and current trends in education spending.”

Moving Money

The measure also would include new flexibility for districts to shift funds between certain programs. It would combine programs aimed at English-learners, students termed neglected and delinquent, students, Native Hawaiian students, rural students, and others into Title I, the main federal program for disadvantaged children.

Schools would be able to transfer money from one program into another—but never out of a Title I school.

That’s something that the NSBA’s Mr. Felton said his organization can get behind.

“We love it,” he said. “We’ve been asking for it. If you’re going to hold districts accountable for student results, they need to be able to move the money without a lot of bureaucratic red tape.”

Still, the draft wouldn’t go as far as a bill the committee passed this past summer, which would have given districts the flexibility to transfer funds out of Title I. The measure, which was approved on a party-line vote, was hailed by advocates for districts, while civil rights groups and Democrats warned it could wind up seriously shortchanging racial minorities and other special populations.

Noelle Ellerson, the assistant director of policy and advocacy for the AASA, preferred the broader flexibility in the earlier bill. But she is generally happy with the direction of the legislation. “It returns control of education decisions to school districts so that they can best meet the needs of their students,” she said.