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Sticker Shock? Figuring Out the Cost of Potential ESSA Spending Rules

So you may have read that a team of negotiators hashing out regulations for the Every Student Succeeds Act did not reach an agreement about "supplement-not-supplant" language. That's shorthand for the requirement that federal aid to low-income students supplement, and not take the place of, state and local money. One reason those talks broke down was because some negotiators said the U.S. Department of Education's proposed regulations would be very complicated and expensive to comply with.

So has anyone put a price tag on the proposed regulations, or at least similar proposals? The answer is yes—at least twice in the past five years, in fact.  

First, let's quickly go over a few background details. In its initial proposal to the negotiating committee, the department floated the following requirement for complying with supplement-not-supplant: Districts would have to show that per-pupil spending in Title I schools (those with a high share of poor students) is at least equal to the average per-pupil spending figure in their non-Title I schools. 

Supporters of this idea on the committee when it met over the past month, including those from the civil rights community, argued that the language would constitute a true test of whether districts were using Title I money in a supplemental fashion. They urged the department to have robust regulations on this front last week.

But state and district leaders vigorously objected. Among other reasons, they argued it was an unfair, backdoor maneuver the department was using to change a different part of the federal law known as "comparability," which requires equitable local spending between Title I and non-Title I schools. 

Two Studies, Two Similar Answers

Let's look at the first price tag of two put on this idea recently. In 2012, the Center for American Progress put out a report on hypothetically changing the portion of federal law about teacher-pay comparability. According to some, the fact that federal law allows staff salary schedules to be used, instead of actual teacher salaries, means the law has a notable loophole. Keep this in mind, however: Others, including many district leaders, don't agree at all that this is really a loophole at all. (More on that below.)

And also remember that because educator compensation makes up a majority of districts' costs, how it's handled in calculations of district spending, and therefore supplement-not-supplant, is crucial. 

Using 2011 data collected by the U.S. Department of Education about school-level expenditures, CAP looked at how much it would cost to "close the loophole" and require actual disparities in teacher salaries between schools to be equalized. 

The price tag came out to $6.83 billion in new state and local funds that would be required. At the time, that constituted just under 4 percent of state and local spending on schools, according to the report. That calculation assumed that if the "loophole" were closed, states and districts would increase per-student spending for Title I schools in order to comply.

An aside: The CAP report's author is Ary Amerikaner, who's now a deputy assistant secretary at the Education Department. She served as the department's point person during ESSA negotiated-rulemaking committee discussions on supplement-not-supplant. 

At CAP, Amerikaner analyzed two scenarios. In the first one, $6.83 billion in new cash was pumped into an unchanged system with "no fix." In the second, the same cash was put in, but the so-called loophole was closed. Then she looked at how it would impact various student groups and types of schools. Here's are two examples of what she found: 

AmerikanerCAP.PNG

Amerikaner reported that at the time, this change would have impacted about 3,390 districts where approximately 77 percent of U.S. students attended school.

"We know, in short, that allowing the comparability loophole to remain is a recipe for disaster, especially as minority students become an ever-larger part of our nation's school population," Amerikaner wrote in her report. "Unlike so many social science problems, this one comes with a fairly obvious policy lever to pull."

One final thing to remember: When Amerikaner proposes using actual teacher salaries in school-to-school spending comparisons, this change would not completely equalize the funding playing field between rich and poor schools within districts. After all, there are other district costs and spending decisions at work. 

Let's go back a bit further to 2011, when the Education Department put out its own policy brief on the matter. It examined the impact of "closing the loophole" and looking at actual school expenditure requirements if you assumed either 1) an infusion of additional cash, or 2) no additional cash, as well as how to measure whether districts were in compliance with the teacher-pay comparability portion of federal law, which back then was No Child Left Behind. Here's what the report found for the projected cost of compliance, as a share of existing state and local spending:

DOEComparability2011.PNGSo both reports essentially say that "closing the loophole" in comparability law would incur a 3-4 percent increase state and local spending. That's assuming there'd be additional money provided to schools. The cost of compliance would drop by about half if only existing money were used, according to the Education Department's 2011 analysis. 

One other important point: Depending on how you calculate spending levels between schools, the Education Department's 2011 report estimated that between 18 to 28 percent of districts would not be in compliance with a "non-loophole" world. 

Not an Easy Task?

In her 2012 report, Amerikaner ultimately recommended gradually increasing spending for funding systems in a non-loophole world—in one scenario, she proposed a ramping-up period of four years, under certain conditions. Nationwide, state education funding has increased gradually in recent years in the wake of the Great Recession. But many stress that schools' costs are going up and that regardless, these state spending increases haven't kept pace, or even matched pre-recession spending levels in many states. And state funding is a factor districts don't control. Roughly speaking, Washington provides 10 percent of public school funding, while districts and states split the remaining tab for K-12.  

But the impact of the change on a district-by-district basis could vary dramatically. Some districts might not have much trouble getting the additional funds from the state or local taxpayers. Others might struggle mightily to come up with the additional funds.

Either way, it's a big mistake to breezily assume that getting a roughly 4 percent hike in state and local spending to address intra-district spending inequities would be an easy task, said Noelle Ellerson of AASA, the School Administrators Association. And that's true, she added, even if the increased spending is phased in. 

That's just one problem with the plan—just one among many others, Ellerson argued, is that the proposal endangers many local collective bargaining agreements. And it squashes the decisionmaking power of administrators as well in a way that simply isn't fair, she added.

"It's not good policy," Ellerson said.

However, Secretary of Education John B. King Jr. has argued that teacher transfers aren't automatically the only way districts could comply with the department's proposed supplement-not-supplant language. And when he defended the proposed language to Congress, he stressed that the use of the average spending figure in non-Title I schools in supplement-not-supplant calculations would give districts some leeway. 

We asked the Education Department last week if it had come up with its own cost estimate, or it could point to any recent cost estimate, tied to its supplement-not-supplant regulatory proposal. We'll update this post if we hear back. 

Remember the important caveats when considering the current state of debate: Congress did not change teacher-pay comparability when it approved ESSA, and comparability was technically not a subject for recent rulemaking negotiations. Also keep in mind that the teacher-pay comparability issue also touches on the debate of whether a teacher's salary is generally commensurate with that teacher's effectiveness. 

Possible Next Steps

With the talks having broken down, the department can now go ahead and write its own regulations. We don't know yet whether the department's proposal will be included in the supplement-not-supplant regulations it comes up with. But there's clearly a strong interest at the department in using per-pupil spending figures in rich and poor schools as a key metric.

However, Sen. Lamar Alexander, R-Tenn. and the chairman of the Senate education committee, won't stand for that. He made it very clear to King earlier this month that if the department's proposal to make per-pupil spending in Title I schools at least equal to the average per-pupil expenditure in non-Title I schools is included in their regulations, he'll use the federal budget process to try to overturn it, and encourage others to sue the department if it won't back down.

It remains to be seen, however, if Alexander would be successful in stripping out any regulatory language he doesn't like, assuming that any such regulatory language from the department includes the controversial supplement-not-supplant language. 

So what do you think? Do the cost scenarios laid out in the 2011 and 2012 sound reasonable and fair for poor students, or prohibitively expensive and unworkable?


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