Title I’s Perfect Storm

by Mary Kusler

Last year half the school districts nationwide watched their Title I funding drop. This year AASA anticipates that two-thirds of all districts will realize a smaller Title I allocation.

Taken together, the statistics reveal an alarming trend: Federal support is declining just as educators face heightened accountability demands under No Child Left Behind.

No single reason explains why so many districts are losing dollars. Instead, the funding crisis is the outcome of a perfect storm in which several unrelated factors have converged in an unfortunate way.

A major contributing factor why school districts are losing Title I dollars is because census poverty rates in areas with populations lower than 20,000 are inaccurate. Census poverty rates, which are collected on a countywide basis, are imprecise because they consider only the rate of adults in poverty, not children. While this poses minimal problems for countywide school districts, it undercounts the poverty of children when the county is home to multiple school districts. When estimates for children living in poverty are used rather than hard numbers, many districts find their locality is assigned a reduced poverty rating despite the fact the students they are serving have not changed.

Inaccurate Counts
Take for example what has happened in Salida, Colo., where wealthy retirees are moving to the county and building enormous homes in the mountains. The retirees’ high incomes have reduced the county’s overall poverty rating, despite the fact that the Salida School District is serving the same students.

Clearly, this scenario demonstrates that census poverty is an inaccurate measure of the number of impoverished students whom districts are serving. In addition, small rural schools must have a minimum of 10 students in poverty before they qualify for any poverty rating. This puts small school districts at a disadvantage.

A more accurate measure would use a school district’s free and reduced lunch count because it includes students whose families are just above the poverty line and are likely to have the same needs as families whose income is a few dollars less per month.

Recently, AASA discovered a waiver process for school districts to appeal their census poverty rating. Unfortunately, by the time we discovered this waiver process it was too late for this year. However, the U.S. Census Bureau expected the next round of estimates to be released in November 2005. School districts will have no more than 90 days to appeal their poverty rating before these estimates are used to determine formula allocations. The process and additional information on the appeal timeline can be found at www.census.gov/hhes/www/saipe/nontechdoc/challengepro.html.

According to the Census Bureau, school districts with fewer than 20,000 residents are encouraged to apply for an alternate Title I distribution through the state. Because these estimates form the basis for a large portion of federal funding, it is important they are accurate.

Competing Formulas
Beyond the problems with U.S. Census poverty estimates, Title I funding has been adversely affected by an imbalance between its four funding formulas. These Title I grant allocations are: (1) a basic grant based on poverty count, (2) a concentration grant when the poverty rate is greater than 15 percent of the population, (3) a targeted grant when the proportion of students affected is greater than 15 percent (which generally means dollars go to larger, higher poverty districts), and (4) an education finance incentive, where the formula is based on state funding equity. These formulas compete with each other for funds in the appropriations process.

Ever since Title I funding reached $8.76 billion in 2001, all additional funding has been directed through only two areas—targeted grants and the education finance incentive grants. Putting the new funds in the targeted formula and finance incentive formula has driven most Title I dollars to urban areas.

In addition, over the past four years, there have been three across-the-board cuts in Title I. When applied to the Title I formulas, Congress takes the entire cut from the basic grant formula, leaving the other three formulas whole. This practice distorts the formulas, resulting in cuts to Title I schools in small towns, suburbs and rural areas.

Finally, Title I no longer sees the funding increases it received from Congress through the 1980s, ’90s and the years immediately following the passage of NCLB when Title I fielded annual increases of $1 billion. These large increases helped to diffuse the shifts in Title I funding between districts. However, the increases have gotten smaller in the last two years. Both the House and the Senate have proposed only a $100 million increase for Title I for the 2006-07 school year. This equals only $4.55 per eligible Title I student and is bound to exacerbate the shift in Title I funding.

Pushing Harder
While the reasons why districts are losing Title I dollars are complicated, clearly this trend will continue in the near term. To counter it, school administrators must argue for funding Title I increases at $1 billion or more annually and funding all four formulas and stand against across-the-board cuts because they affect Title I disproportionately.

The program’s historic strength has been that all participating school districts received enough to make a difference for some students in the schools with the highest incidence of poverty. That broad support meant both Democrat and GOP members of Congress from rural, suburban and urban areas heard from home about the importance of Title I.

That Congressional support is diminishing because of the complaints about NCLB and the losses in funding. In the meantime, school districts will do best to push for the highest funding levels for Title I possible. As Title I funding increases, those gains hopefully will lessen the loss in Title I funds.

Mary Kusler is AASA assistant director of government relations. E-mail: mkusler@aasa.org