Questions Loom as ESSA Funding Awaits

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As the U.S. Department of Education moves closer to releasing draft spending rules for the Every Student Succeeds Act, what does its most-recent guidance about funding suggest about how it may handle some of the key issues at stake this time around?

That guidance—released in July 2015, before the Every Student Succeeds Act passed last December—offers a window into the department's thinking on the controversial subject of how to ensure federal funds, like those for low-income students, supplement state and local education aid. But that guidance does not neatly match subsequent, post-ESSA Education Department proposals about that supplemental requirement for federal funds.

And like other facets of this issue, the guidance highlights the big debate over the extent to which federal funds can and should be used as leverage for fostering greater equity between wealthy schools and their disadvantaged counterparts.

When ESSA passed in December, Congress tasked the department to work with a team of district, state, and other K-12 representatives to set rules for the requirement that federal education money be used in addition to state and local cash.

Those negotiations last spring, however, failed to produce a consensus, leaving it to the department to craft its own draft spending rules.

The most controversial department proposal during the negotiations was to require that districts' state and local per-pupil spending in Title I schools (those with relatively large shares of low-income students) be at least the same as the average in non-Title I schools, in order for them to show they're using federal dollars properly under ESSA.

Post-ESSA Questions

When it comes to ensuring that federal funds are supplemental, neither No Child Left Behind (the previous version of federal K-12 law) nor ESSA explicitly requires that sort of measurement of spending between two different types of schools.

Supporters of that idea say it would help close glaring resource gaps between schools. The Leadership Conference on Civil and Human Rights has said, for example, that districts with state and local spending gaps between relatively advantaged and disadvantaged schools are, by definition, violating the requirement that federal funds not supplant state and local cash.

And U.S. Secretary of Education John B. King Jr. has repeatedly argued before Congress and elsewhere that in order for federal dollars to be truly supplemental and help students in need, those sorts of gaps must be closed.

Awaiting Answers

Here are a few key questions about how eagerly the awaited proposed regulations on the spending of federal funds under the Every Student Succeeds Act may end up handling tricky policy and political issues.

  • Will the U.S. Department of Education stick by its guns and require much greater equalization of per-pupil spending between rich and poor schools?
  • Will there be specific examples of spending approaches, such as weighted per-student formulas, deemed acceptable in the rules?
  • Will the department give districts some flexibility in terms of when they have to abide by new rules, such as that controversial per-pupil spending comparison?
  • How will the department handle ongoing concerns that such a per-pupil spending rule would lead many districts to lump many low-income students together in one school?
  • Will the rules attempt to address worries from teachers’ unions that the per-pupil spending rule would undermine many locally bargained contracts?

But state and district K-12 leaders said the department didn't have the power to require this intradistrict funding change, among other complaints. (More on that below.)

But what does the 2015 guidance say—or not say—about resource equity when it comes to making federal funds truly supplemental? The guidance gives two examples for how schools can show they're distributing nonfederal funds in a way that's equitable.

The first is a weighted per-student funding formula that assigns a base amount per student, plus additional money for certain types of students.

The sample formula used in the guidance assigned a $7,000 base-funding allocation per student from state and local funds. Then the formula would assign an extra $500 for each student classified as an English-language learner, an extra $250 per student from a low-income family, and an extra $1,500 per student who has a disability, among other demographics. (This sample formula doesn't explicitly say that a student could qualify for two or more additional allocations of cash based on demographics.)

Those students were then factored into the sample formula to calculate the total nonfederal funds a particular school with certain characteristics should receive.

The second example is a funding method based on staffing and supplies.

The sample budget based on those two factors uses average teacher salaries and benefits at a school, one principal's salary and benefits, and a cost multiplier for "materials and supplies" to calculate how much a certain school with specific staffing levels should receive in nonfederal funds.

State Concerns

Those two sample approaches for distributing state and local money would have to cover all schools, regardless of whether any particular school received any Title I aid, according to the guidance.

So why is it significant that the department used those examples in its 2015 guidance on the subject?

During last spring's negotiations over how ESSA should regulate the supplemental nature of federal money, local and state officials complained that under department's proposal to create greater equalization of spending between Title I and non-Title I schools, districts' staff-based budgeting methods and weighted formulas could not be used, because they might lead to funding distributions that strayed too far from the proposal.

The department responded to those concerns by singling out weighted per-student formulas, or budgets based on staffing allocations, as acceptable in its proposal for the last round of negotiated rulemaking. But there was a catch: The methods would only get the green light as long as state and district per-pupil funding in a district's Title I schools was at least equal to the average state and local spending per student in non-Title I schools.

Here's a key difference between the department's guidance and its proposals that failed to get approval from negotiators: The guidance does not say that districts must compare and roughly equalize total state and local spending among different types of schools. But the department's 2016 proposals in negotiated rulemaking say exactly that.

The 2015 guidance, in its general language, does refer to the "equitable distribution" of state and local resources that should take place. But does that mean equal spending outcomes among schools, or that one equitable method of distributing money must be used for all schools?

Multiple Examples

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And remember: The formulas highlighted above are just two examples the department laid out in 2015 of equitable distribution of state and local funds.

The guidance does caution that federal Title I funds can't be considered supplemental if they are used as "part of the basic level of education funding." In other words, if schools rely on federal dollars to provide a basic education program, they're not following the requirement.

In early negotiations over ESSA regulations this spring, the department proposed requiring districts to show they were providing a basic education program with state and local dollars. But after objections, it dropped that language.

It remains to be seen exactly how the draft regulations will address, or fail to address, those and other questions.

Vol. 36, Issue 02, Pages 16-17

Published in Print: August 31, 2016, as Reading the Tea Leaves in Advance of ESSA Funding Rules
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