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Without Regulations for a Key ESSA Spending Rule, Here's What Could Happen

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As we reported last month the Obama administration decided not to finalize a rule for the supplemental-money requirement in the Every Student Succeeds Act before President Donald Trump took office. So where does this leave this spending provision?

A quick refresher: Like past versions of the federal education law, districts must use federal K-12 money to supplement, and not supplant, state and local spending on schools. After ESSA passed late in 2015, the Obama Education Department made waves for pushing districts to ensure they were spending nearly equal amounts of state and local cash on Title I schools (those with large shares of students from low-income backgrounds) and non-Title I schools. In its draft rule put out last year, the department gave districts a few options for meeting the requirement, all designed to shift more resources to relatively resource-poor schools. State leaders, district administrators, and Republican education leaders in Congress have consistently criticized the department for this approach, while civil rights advocates cheered it.

Even if the Obama administration had issued a final rule along these lines, GOP leaders in Congress almost certainly have overturned it. For that and other reasons, it's highly unlikely that an Education Department under Trump will follow a similar approach. 

After the Obama administration backed away from regulating this issue, all that's left is what's in the statute. There's recent precedent for that.

Flexibility on the Horizon?

So what happened the last time we had a new federal education law and new language on the supplement-not-supplant requirement?

Under NCLB, "school districts and schools must prove that each individual cost charged to Title I supports an activity the district or school would not have otherwise carried out with state or local funds." That's according to a 2012 paper written by Melissa Junge and Sheara Krvaric of the Federal Education Group (a Washington school finance consulting firm). 

However, there were no accompanying regulations for the supplement-not-supplant requirement in No Child Left Behind. And it's not clear that this provision was ultimately well-understood by districts throughout the life of NCLB. The Obama administration issued guidance in 2015, before ESSA passed, clarifying what supplement-not-supplant meant for Title I schoolwide programs. The guidance said districts could show compliance with the rule by using weighted-student funding formulas, or a method of staffing that applied across schools, to name two examples. 

In short: What NCLB said about just schoolwide programs and supplement-not-supplant now covers all of Title I under ESSA. So while that 2015 guidance doesn't deal with ESSA, it could prove a useful starting point for states and districts when considering how to comply with supplement-not-supplant under ESSA without regulations. 

Just over a year ago, we discussed how the supplement-not-supplant rule changed from NCLB to ESSA in order to (from the perspective of many lawmakers and advocates) give districts greater flexibility. Specifically, the law no longer requires each individual cost for Title I activities to be itemized to show that it's in compliance with the rule. The law only requires districts to show that schools are getting the same state and local funds they would otherwise get without any federal Title I aid. 

"Congress has clarified that we don't evaluate [compliance] based on how you spend your federal dollars any more," Krvaric said.

Here's what Whiteboard Advisors, an education consulting firm, said about the importance of the change ESSA made to the supplement-not-supplant rule in late 2015:

This [change] may come across as dull and insignificant, but it is not. The change would make it easier for school leaders to use federal funds to help to procure innovative technologies that help to deliver a high-quality education to all children. No longer would a district have to worry about whether a particular program or service is considered core or supplemental.

Because ESSA provides a clear test to measure if schools are meeting the supplement-not-supplant requirement, school districts have enough to go on to comply with the law and still use their funds with appropriate discretion, said Noelle Ellerson, the associate executive director with AASA, the School Administrators Association, which opposed the Obama proposals for supplement-not-supplant. 

"You have enough clarity there. The schools don't have to anticipate varying interpretations by different auditors," Ellerson said. 

ESSA_button.jpgThe Trump administration, of course, could issue new or updated guidance on supplement-not-supplant, just like the Obama administration did in 2015, and not fire up the rulemaking process again. That guidance wouldn't have the same legal force as regulations, however. Given Trump's stated preference for giving local education officials more power, it's unlikely that they'd want to initiate a rulemaking process that got as contentious as it did for the Obama administration last year. 

Districts should look out for an upcoming "compliance supplement" on the issue from the federal Office of Management and Budget, Krvaric said. This supplement will be designed to help districts navigate how to meet the requirement. And further guidance from the administration might prove helpful as districts navigate the language, she added.

But those sympathetic to Obama's education department will argue that without the kind of change envisioned by the ultimately abandoned draft rule, there will continue to be many major funding gaps between schools with mostly well-off students and those schools with more disadvantaged students in the same district. And that disparity not only violates the intent of supplement-not-supplant, according to some, but also disproportionately impacts students of color. Such flexibility for districts, they say, shouldn't get praised.


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