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Four Things to Ponder for Negotiations Over ESSA's Funding Regulations

One of two main issues Every Student Succeeds Act negotiators will tackle when drafting proposed regulations for the law is "supplement-not-supplant." It's a relatively low-profile issue compared to accountability provisions in ESSA. But for those who care about and study school funding, it's a key portion of the law.

Supplement-not-supplant is the requirement that federal Title I dollars for disadvantaged students not simply take the place of state and local dollars in schools. That federal money is supposed to supplement, not supplant, those state and local funding efforts. That requirement survives the transition from the No Child Left Behind Act to ESSA, but there are some changes, including new breathing room for districts that will no longer be required to show in an itemized way exactly how Title I money supplemented state and local money in providing educational services.

The U.S. Department of Education released a short background paper last week intended to guide ESSA negotiators in proposing regulations governing supplement-not-supplant. Here are some issues that could have an impact on the negotiators' discussions and their proposals:

1. The department's word choice in the background paper to present the issue is interesting.  

The background paper says that Title I dollars should be used as an additional resources to help low-income students, "instead of being used to simply make up for unfair shortfalls in state and local funding." That phrase may provide an insight into at least one of the department's priorities in the process.

"The word 'unfair' shows that they might be looking at this through an equity lens," said Sheara Krvaric, a lawyer with the Federal Education Group, a consulting firm for districts and state education agencies. 

 And the department strikes a similar note a few sentences later in the paper, when it addresses how state and local dollars are "not evenly distributed."

2. Will the department use a light touch in its final regulations?

That may seem like an obvious and general question. But Krvaric said that when districts develop their methodologies for showing that Title I dollars are supplementing and not supplanting other dollars, they shouldn't be precluded from using "innovative" methods. If the regulations are too restrictive, Krvaric said, it could ultimately block certain innovative ways for schools to provide and pay for good academic programs.

"What we don't want is to see regulation get ahead of what will be good results," especially for low-income kids, Krvaric said.

3. The fate of the three tests

In recent years, the U.S. Department of Education and other outside auditors have used three tests to determine whether districts were following the federal supplement-not-supplant requirement:

• Whether state law required a program or service. For example, if a state required schools to maintain a certain class size, then Title I dollars could not be used to pay the salary of a teacher used to meet that class-size requirement. 

• Whether state or local funds were used for a service or for educators the previous year. If state or local money was used for instructional specialists in the previous school year, for example, then Title I money could not pay for those coaches the next year.

• Whether everyone benefitted. If state and local dollars are used to provide a service to non-Title I students, then Title I dollars can't be used to provide the same service to Title I students. 

But because under ESSA itemized costs are no longer required for judging the impact of Title I money on state and local funds, the three tests presumably no longer matter, Krvaric said, and therefore it might be helpful if the department clarify that these tests no longer apply, in regulations or somewhere else. 

4. Show us the money.

One issue the department's background paper highlights is that under ESSA, per-pupil expenditures that include federal, state, and local funds must be reported for individual schools and districts on local and state report cards. These disclosures on expenditures must also specify both personnel and non-personnel expenditures.

This new reporting requirement isn't explicitly addressed in the list of questions the department presents for discussion. But could it inform discussions about the supplement-not-supplant regulations governing Title I money?

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