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Ed Money Watch

A Blog from New America's Federal Education Budget Project

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Harkin ESEA Reauthorization Bill is Silent on Title I Funding Formulas

Published:  October 13, 2011

Earlier this week, Senator Tom Harkin (D-IA) released his proposal for reauthorizing the Elementary and Secondary Education Act (currently known as No Child Left Behind). Much has already been said about the various changes proposed in the bill, including a move to college and career ready standards, changes to accountability provisions, and changes to school improvement interventions. (For some good summaries and analyses see here and here.) But few have mentioned a reform clearly missing from the proposed legislation: Any discussion of funding formulas for Title I.

Back in August, Ed Money Watch wrote that Congress was gearing up for a formula fight as part of ESEA reauthorization. Formula fights – which involve congressional staff members negotiating funding formulas to distribute Title I funds among states and school districts that both provide support for the education of disadvantaged students benefit each of their states as much as possible – are notoriously long, heated, and tend to produce odd formulas (i.e. hold-harmless, set-asides, small state minimums, etc.) in the name of political compromise. So it’s no surprise that Harkin’s bi-partisan bill leaves the existing funding formulas untouched in the interest of maintaining the peace.

But there are many good reasons that lawmakers should take up the formula fight in earnest, even if it does further delay reauthorization.

Currently, Title I funding ($14.5 billion in fiscal year 2011) is distributed through four complicated funding formulas that each assess poverty slightly differently. The formulas are opaque and difficult to interpret – some state officials don’t even fully grasp the mechanisms by which the funds are distributed – but here is the gist of each:

  • The Basic grant formula distributes funds based on the number of poor students in a state or district. The lion’s share of Title I funding - $6.6 billion out of $14.5 billion 2011 - is distributed through this un-nuanced formula that does little to ensure that districts with the most poverty receive the most support.
  • The Concentration grant formula provides funds to districts with 15 percent or more students living in poverty. The smallest portion of funds - $1.4 billion out of $14.5 billion in 2011 – is distributed through this formula.
  • The Targeted grant formula gives more funding per pupil to districts with higher concentrations of poor students, meaning those districts receive more funds per poor student as the percentage of students in poverty increases. However, it also favors large districts because it provides more funding to districts with higher numbers of poor students through weighting. This formula was written into the law in 1994 and received $3.3 billion of $14.5 billion in 2011.
  • The Education Finance Incentive Grant formula rewards states with more equitable funding formulas by taking into account a state’s fiscal effort—the percentage of per capita income devoted to education—as well as how equitably the state’s school finance system distributes state and local funding for education. Within states, funding is distributed to school districts in a manner similar to the Targeted grant formula, except that it provides extra weight to poor students in districts in "bad school finance states." This formula was written into the law in 1994 and received $3.3 billion of $14.5 billion in 2011.

But ultimately, these formulas do not always distribute funds as they are intended to because they also take into account state size, per pupil expenditure, and even the degree to which a state equitably funds low- and high-income schools. In other words, the formulas are riddled with political agendas, logrolling and compromises.

While these nuances are supposed to guarantee states a certain level of funding, account for the cost of providing an education in a given state, or reward states with more equitable funding formulas, they often undermine the intent of the law. As a result, states like Wyoming receive far more support per poor pupil than much more impoverished states like Arkansas and New Mexico.

Changing the way these nuances factor into the funding formulas could ensure that districts with high concentrations of poverty receive more funding per poor pupil. Revising the Title I funding formulas would also give Congress a chance to make sure that rural and small school districts get their fair share of funds.  By eliminating provisions that give more funding to larger districts (called number weighting) and changing the way the formulas take state per pupil spending into account, Congress could bolster struggling small and rural districts that often take the largest hit during economic downturns.

It’s highly possible that the House lawmakers will introduce changes to the Title I funding formulas as negotiations continue on ESEA reauthorization. So far, the House has not released any legislative language regarding the formulas. Similarly, a Senator could choose to take on the task and offer an amendment to the Harkin bill that revises the formulas. Regardless of where it comes from, we hope that Congress includes a discussion of Title I funding formulas in its reauthorization process and ensures that Title I funds are able to do as they are intended – to provide additional services to the students that need them most.

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