Low-Income Schools Don't Get a Fair Share of State and Local Funds

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A new report from the U.S. Department of Education documents that schools serving low-income students are being shortchanged because school districts across the country are inequitably distributing their state and local funds.

The analysis of new data on 2008-09 school-level expenditures shows that many high-poverty schools receive less than their fair share of state and local funding, leaving students in high-poverty schools with fewer resources than schools attended by their wealthier peers.

The data reveal that more than 40 percent of schools that receive federal Title I money to serve disadvantaged students spent less state and local money on teachers and other personnel than schools that don't receive Title I money at the same grade level in the same district.

"Educators across the country understand that low-income students need extra support and resources to succeed, but in far too many places policies for assigning teachers and allocating resources are perpetuating the problem rather than solving it," said U.S. Secretary of Education Arne Duncan said. "The good news in this report is that it is feasible for districts to address this problem and it will have a significant impact on educational opportunities for our nation's poorest children."

In a policy brief that accompanies the report, a Department analysis found that providing low-income schools with comparable spending would cost as little as 1 percent of the average district's total spending. The analysis also found that extra resources would make a big impact by adding as much as between 4 percent and 15 percent to the budget of schools serving high numbers of students who live in poverty.

The Title I program is designed to provide extra resources to high-poverty schools to help them meet the greater challenges of educating at-risk students. The law includes a requirement that districts ensure that Title I schools receive "comparability of services" from state and local funds, so that federal funds can serve their intended purpose of supplementing equitable state and local funding.

In recent years a growing number of researchers, education advocates, and legislators have highlighted that by not requiring districts to consider actual school-level expenditures in calculating "comparability of services," the existing comparability requirement doesn't address fundamental spending inequities within districts. Instead, districts can show comparability in a number of easier ways, such as by using a districtwide salary schedule. This masks the fact that schools serving disadvantaged students often have less experienced teachers who are paid less. It also undermines the purpose of Title I funding, as districts can use federal funds to fill state and local funding gaps instead of providing additional services to students in poverty.

For the study, Education Department researchers analyzed new school-level spending and teacher salary data submitted by more than 13,000 school districts as required by the American Recovery and Reinvestment Act (ARRA) of 2009. This school level expenditure data was made available for the first time ever in this data collection.

Using the data from the ARRA collection, Department staff analyzed the impact and feasibility of making this change to Title I comparability. That policy brief finds that:

- Fixing the comparability provision is feasible. As many as 28 percent of Title I districts would be out of compliance with reformed comparability provisions. But compliance for those districts is not as costly as some might think—fixing it would cost only 1 percent to 4 percent of their total school-level expenditures on average.

- Fixing the comparability provision would have a large impact. The benefit to low-spending Title I schools would be significant, as their expenditures would increase by 4 percent to 15 percent. And the low-spending schools that would benefit have much higher poverty rates than other schools in their districts.

Russlynn Ali, assistant secretary for civil rights, said that this analysis shows that closing the comparability loophole is within reach and would provide meaningful help to low-income schools.

"Transparency on resource allocation within school districts is critical to ensuring every child has access to the same educational opportunities. These new data highlight that the Title I comparability provision is broken and has failed to provide access to equitable resources, and that it is possible to fix it."

Under President Obama's Blueprint for Reform of the Elementary and Secondary Education Act, the Title I comparability provision would be revised to ensure that state and local funding levels are distributed equitably between Title I and non-Title I schools. Language to reform Title I comparability is also included in the bill to reauthorize ESEA that the Senate Health, Education, Labor, and Pensions Committee passed last month.