When the federal government distributes education funding via formulas, it typically takes several things into account. Chief among the data typically used are state- and school district-level poverty rates as determined through the Small Area Income and Poverty Estimates the Census Bureau conducts annually. These poverty rate estimates show the percentage of children age 5-17 living in families with total income below the poverty rate. Recently, the Census Bureau made those estimates available for 2010, providing a unique look into how poverty rates have shifted as a result of the economic recession. Those data are now available on the Federal Education Budget Project’s website (Ed Money Watch’s parent initiative), http://febp.newamerica.net. Users can compare poverty rates over time and view them in tandem with data on federal funding, student achievement, and other demographics.
At the state level, the data show that poverty rates increased from 2009 to 2010 in all but two states – New Hampshire and Missouri. In both of those states, poverty rates decreased slightly. Nevada endured the largest poverty rate increase – 3.4 percentage points – to 19.2 percent in 2010. An additional 15 states saw increases of more than 2.0 percentage points from 2009 to 2010, including several large states such as California, Florida, and Pennsylvania. Nationally, the poverty rate increased from 18.2 percent to 19.8 percent.
At the district level, the data show much greater variability in poverty rates year to year. Of the nearly 14,000 school districts with data, over 9,100 saw increased poverty rates from 2009 to 2010, with an average increase of 3.9 percentage points. But nearly 700 districts saw increases of more than 10 percent from year to year, likely creating a significant increase in the number of students in need of additional services and support. Just over 4,300 districts experienced decreases in their poverty rates and nine districts saw no change at all.
What do these increased poverty rates mean for federal funding? Because most federal funding formulas – including those for Title I, Part A Education for the Disadvantaged Grants, Individuals with Disabilities Education Act grants to states, and Title II Improving Teacher Quality State Grants – take poverty into account, these substantial increases in poverty rates should mean increased allocations for many districts. These numbers are likely to be used to distribute grants for fiscal year 2012 because they provide the most recent data available. Though Congress did appropriate more funding for all three programs for 2012 compared to 2011, it probably won’t be enough to compensate for the demographic changes. The relatively moderate funding increases may mean that many states and districts will not get sufficient additional federal funds to support the needs of their newly-eligible students, resulting in a tough budget year for the districts that saw large increases in students living in poverty from 2009 to 2010.
Check out the Federal Education Budget Project website to view the new student poverty data as well as new or updated data on state allocations for Title I, Individuals with Disabilities Education Act, and Impact Aid Basic Support Payments for fiscal years 2011 and 2012.