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ESSA's Disputed Funding Rule: Comparing Older, Newer Education Dept. Language

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We've covered a lot of the vinegary debate over spending rules for the Every Student Succeeds Act that are due out pretty soon. But here's one other thing for you to consider: U.S. Department of Education guidance distributed to states in July 2015 about how federal money should be used as a supplement for school budgets..

That guidance is some of the most recent language we have from the Education Department about the issue, before the Every Student Succeeds Act passed last December. It's another window into the department's thinking on the subject. And like other facets of this issue, it highlights the big debate over the extent to which federal funds can and should be used as leverage for creating greater equity between wealthy schools and their disadvantaged counterparts.

Quick refresher: When ESSA passed, the department was tasked by Congress to work with a team of district, state, and other K-12 representatives and create rules for the requirement that federal money be used in addition to state and local cash. Those negotiations this spring, however, failed to produce a consensus plan, leaving it to the department to craft its own set of draft rules.

So what happens when we compare what the guidance says (and doesn't say) to the plans the department pitched during negotiated rulemaking? What has the department said constitutes an equitable distribution of funds by a district? And what additional questions does this comparison raise about what the department will propose for regulating federal dollars? 

Before we examine those differences, remember that the 2015 guidance on this complicated issue dealt with federal education law before ESSA passed, and it dealt with schoolwide Title I programs, instead of "targeted" programs for specific groups of students. And, finally, keep in mind the 2015 guidance does not have the same legal force as regulations.

Formula for Success

Let's focus on the department's controversial plan, made during the spring negotiations, to require that districts' state and local per-pupil spending in Title I schools (those with relatively large shares of low-income students) be the same as the average in non-Title I schools, in order for them to show they're using federal dollars under ESSA.

For your reference, here's the language in the pre-ESSA federal education law highlighted by 2015 guidance:

2015GuidanceSNS.PNG

And here's ESSA language on how federal funds must be used by states and districts in relation to state and local money: 

ESSAStatutoryLanguage.png

The 2015 guidance gives two examples for how schools can show they're distributing non-federal funds in a way that's equitable. 

The First Example: A weighted per-student funding formula that assigns a base amount per student, plus additional money for certain types of students:

ESSAGuidanceWeighted.PNG

That distribution would have to cover all schools, regardless of whether any particular school received any Title I aid.

Why is this significant? As you might recall, during negotiations over how ESSA should regulate the supplemental nature of federal money, local officials complained that the proposals this past spring from the Education Department would disrupt weighted per-student funding formulas. Their complaint was that the department's proposal this past spring to create greater equalization of spending between Title I and non-Title I schools would render many such formulas unusable.

The Second Example: The guidance also uses a sample school funding method based on staffing and supplies:

ESSAGuidanceStaffing.PNG

Note the language at the bottom that the "assumptions" above would have to be used by a district for "all of its schools" regardless of their Title I status. Many districts create budgets based on staff allocations for schools. And some negotiators brought up this budgeting method as another way to argue that the department's proposed per-pupil spending rule wouldn't allow them to budget this way.

So, in short, here's a key difference between the guidance and the proposals from negotiated rulemaking: The guidance does not say that districts must compare total state and local spending between different types of schools. But the department's 2016 proposals in negotiated rulemaking say exactly this. 

The department responded to these concern by singling out weighted per-student formulas, or budgets based on staffing allocations, as acceptable in its proposal for the last round of negotiated rulemaking—but only as long as state and district per-pupil funding in a districts' Title I schools was equal to the average state and local spending per student in non-Title I schools.

The 2015 guidance, in its general language, does refer to a reliance on a "equitable distribution" of state and local resources. But does that mean equal spending outcomes between schools, or that one equitable method of distributing money is used for all schools? That's a key question in this debate. And remember: the formulas I highlighted above are just examples the department laid out in 2015 of equitable distribution of state and local funds.

Methods Versus Outcomes

Looking for a counterpoint to all of this? The supporters of the department's proposals on this issue, like the Leadership Conference on Civil and Human Rights, say that districts with state and local spending gaps between relatively advantaged and disadvantaged schools are, by definition, violating the requirement that their federal funds not supplant state and local cash.

ESSA_button.jpgAs the Leadership Conference's Liz King put it earlier this year, the only real "flexibility" in such a scenario means that disadvantaged schools are getting shortchanged. And U.S. Secretary of Education John B. King Jr. has repeatedly argued before Congress and elsewhere that in order for federal dollars to be truly supplemental, those sorts of gaps must be closed

The guidance does caution that federal Title I funds can't be considered supplemental if they are used as "part of the basic level of education funding." In other words, if federal dollars are relied upon by schools to provide a basic education program, they're not following the requirement. In early negotiations over ESSA regulations this spring, the department proposed requiring districts to show they were providing a basic education program with state and local dollars, but after objections, it dropped that language.

We've reached out to the Education Department for its thoughts on comparing the 2015 guidance with its negotiated rulemaking proposals, and we'll update this post if we hear back.

Here are a few other questions the guidance and this past spring's department proposals raise as we look ahead to the draft rules:

  • Will the department continue to stick by its guns and require much greater equalization of per-pupil spending between rich and poor schools?
  • Will there be specific examples of spending approaches, such as weighted per-student formulas, that the department will specify as acceptable in the rules?
  • Will the department give districts some flexibility in terms of when they have to abide by new rules, such as that controversial per-pupil spending comparison? 
  • How will the department handle ongoing concerns that such a per-pupil spending rule would lead many districts to lump many low-income students together in one school?
  • And will the rules attempt to address worries from teachers' unions that the per-pupil spending rule would undermine many locally bargained contracts?

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