Education Funding Opinion

NEEDED: Federal Action for Fair Funding of High-Poverty Schools

By John Podesta & Cynthia G. Brown — July 25, 2008 6 min read
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The intense competition of the global economy demands that all of America’s young people receive the kind of education they need and deserve. Yet to make that happen, the United States must confront the fact that inequality continues to plague its public schools.

One of the most harmful manifestations of this is that local school district funding is allocated in a way that hurts poor and minority students. And, indirectly, existing federal legislation condones and has historically supported these funding practices. Federal education-funding requirements, in short, exacerbate existing inequality in education at the local level.


This happens because of language in Title I of the Elementary and Secondary Education Act of 1965, the so-called “comparability provision” that was supposed to promote equality of education but indeed does not. Its basic notion is that state and local funds for schools should be equitable before federal Title I funds are added to schools with large concentrations of low-income students. The comparability provision, however, also contains what some of us consider to be a loophole that allows long-standing ways that local funds have been inequitably distributed to continue.

Almost all large and medium-size school districts (sometimes unknowingly) expend more dollars on personnel and services in schools with fewer low-income students. This happens because districts have historically allocated funds to their schools not by giving a dollar amount to each school, but instead by allocating “staff” resources to schools. As the University of Washington researcher Marguerite Roza has pointed out: “Most teaching positions and other staff full-time equivalents, or FTEs in education parlance, are assigned on the basis of enrollments. The formula might, for example, call for a teacher for every 25 students. The problem arises when staff FTEs are translated to real dollars.”

The differences in actual school expenditures are often substantial, because teachers’ salaries are based on their experience and education, and because high-poverty schools have many more less-experienced, lower-paid teachers and much more turnover than low-poverty schools. Roza found in her research in Baltimore that “when teachers at one school in a high-poverty neighborhood were paid an average of $37,618, the average teacher’s salary at another school in the same district was $57,000.” Assuming the same number of teachers in each school—say, 20—the difference in dollars available for the two schools is $387,640.

Fortunately, smart federal policy can help fix this situation, as the four experts commissioned by the Center for American Progress to analyze virtually all aspects of the federal and local “comparability” issue have concluded. The report based on their work, “Ensuring Equal Opportunity in Public Education: How Local School District Funding Practices Hurt Disadvantaged Students and What Federal Policy Can Do About It,” traces the history of how this problem developed and points to actions that might end its negative impact on student achievement.

If a more sensible Title I comparability provision were enacted, there is little doubt that local districts would have to change the way they allocate funding for their schools, which over time would ensure that a more equitable local education-funding process would take hold across the country. Transferring highly paid teachers against their will to even out expenditures seems nonsensical. Yet if extra funding were made available for high-poverty schools, it could be put to numerous good uses, such as employing master and mentor teachers, offering bonuses to recruit and retain effective teachers, and lengthening the school day or year to expand learning time for students. This would be a major step in repairing the broken system of American school finance, and would provide disadvantaged students with the educational opportunities they need to compete in today’s economy.

For more than 40 years, policymakers and advocates alike celebrated the ESEA, especially Title I, which, together with Title VI of the Civil Rights Act of 1964, heralded a major new role of the federal government: to guarantee equal educational opportunity nationwide. For a while, there was progress and reason to celebrate. But unfortunately, this guarantee of an equal education has never been fully realized. As many have documented, despite the federal help for schools with large concentrations of poor students, schools and districts with many low-income students continue to receive less than their fair share of funding—based on student need—up and down the nation’s highly decentralized system of public education.

The federal government distributes Title I money based on poverty, but it does so through a formula that combines numbers of children in poverty with state per-student expenditures. This practice penalizes states with low tax bases even if they tax themselves heavily for education. Many states have developed fairer state funding systems, often as a result of years of litigation in state courts. But there has been little change in the inequitable way that local school districts fund their schools. This “within district” inequality has tragic consequences, as documented by the usually lower performance of students in high-poverty schools. This has not changed even since a new, standards-based framework for public education took hold nationwide in the mid-1990s.

Federal education-funding requirements exacerbate existing inequality in education at the local level.

The motivation behind the No Child Left Behind Act of 2001, the most recent upgrade of the ESEA, was to increase pressure on states and districts to focus on the educational needs and learning results of disadvantaged students. Congress substantially increased dollars for high-poverty schools for a couple of years. But state and local policymakers never leveled the educational playing fields with their funds, and the federal government did not push them to do so.

The upshot: Unequal funding of high- and low-poverty schools continues with local, state, and federal funds. No wonder achievement gaps sometimes seem intractable.

While the harm falls most heavily on low-income students, the injustice to their hard-working teachers and principals is almost as tragic. It is fundamentally unfair to hold educators accountable for reaching uniform high standards when the monetary tools they are given are so unequal. But what’s encouraging is that federal legislators can correct these inequities if they take the time to understand the complex issues at hand in their states and congressional districts, and then act on lessons already learned by districts now experimenting with new ways to budget education funds.

The Oakland Unified School District in California, for example, has changed the way it funds its schools. During the early 2000s, the district initiated reforms to address disparities in student outcomes and resources between schools located in high-income and low-income neighborhoods by implementing a new system called “results-based budgeting.” This system pushed dollars out to schools and used actual site-by-site expenditures to develop budgets. It has, in conjunction with other reforms, made Oakland Unified the most improved large urban school district in California over the last three years, though its leaders acknowledge it still has a long way to go. Many credit Oakland with being the only district in the country to fully implement equitable funding of all of its schools on a per-school, per-pupil basis.

It is absolutely necessary for the next administration and the next Congress to examine such examples of progress and fix the federal funding requirements for Title I schools. For the future of all American children, and our country, these changes can’t come a moment too soon.

A version of this article appeared in the July 30, 2008 edition of Education Week as NEEDED: Federal Action For Fair Funding of High-Poverty Schools

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