New federal education law could change how we fund high-poverty schools

Kylie Thomas was an OK Policy summer intern. She is a Master’s student in economics at American University and previously earned her Bachelor’s degree in economics from the University of Tulsa.

When the Every Student Succeeds Act (ESSA) passed in December, Congress changed the language to a key requirement of Title I, the federal program that is the primary source of federal funds for public schools. Title I funding goes to schools that include a large number or high percentage of “disadvantaged” students, meaning students in low-income families, foster homes, or who have been abused or neglected. The key change made by ESSA affects the safeguards meant to ensure that federal dollars add to rather than replace state and local funds (commonly known as “supplement, not supplant”).

Prior to ESSA, districts could show compliance by proving they use Title I funds to provide students with services they would not have been able to receive otherwise. ESSA eliminated this language but did not replace it with new language to specify how to determine compliance. Instead, the U.S. Department of Education was required to enter into a process of negotiated rulemaking to write new regulations for supplement, not supplant. The regulations drafted by the Department earlier this spring would require state and local funds per student in Title I schools to be at least equal to the average amount of state and local funds in non-Title I schools. However, negotiators were unable to reach a consensus on the drafted regulations. As a result, the Department will now rewrite the new regulations on its own.

The development of this rule has been perhaps the most controversial part of the Every Student Succeeds Act. Some states and members of Congress have argued that the Department does not have the authority to require states to equalize funding of school districts. Teachers’ groups are also concerned that in economic and policy environments where raising new revenue is difficult, the only way to reduce funding disparities may be redistribution of resources between schools. Because salaries and benefits make up a large majority of district spending, the only way to increase funding in Title I schools may be to move teachers with higher salaries (which usually means more experience) out of non-Title I schools.

However, districts’ ability to redistribute may be limited as well. A recent study by the Brookings Institution found that when controlling for the districts and states where schools are located, higher poverty schools and Title I status are not associated with lower spending on teacher salaries. And in many cases, the largest gaps are between districts, not within districts — i.e. more experienced teachers with higher salaries are found more often in wealthy suburban districts and less often in poorer urban and rural districts. This suggests that within districts, schools could not successfully move teachers around to make up the gaps in funding.

The U.S. Department of Education and many civil rights groups favoring the rule argue that it is necessary to overcome the local funding disparities that undermine the intent of Title I funding. They argue that potential administrative disruptions from implementing the rule should weigh less than ensuring that all students have equal access to a quality education. While they recognize that raising new revenue is politically challenging, proponents of the rule argue that it is worth the effort and feasible over the five-year phase-in period proposed by the U.S. Department of Education.

What does this all mean for Oklahoma?

Given that Oklahoma schools already face a deep budget crisis and teacher shortage, tasking districts to raise new revenue to bring the funding of Title I schools up to the average funding level of non-Title I schools may seem impossible. But it’s not. Oklahoma actually does a fairly good job of sending more state and local funds per student to high poverty districts. Because our school funding formula adds weight to students who come from low-income families or who face other disadvantages, the highest poverty districts receive about $531, or 7 percent, more per student than the lowest poverty districts. We don’t have the large funding disparities seen in places like Texas and Illinois.

Nonetheless, increasing state and local funds spent per student is a goal that Oklahoma desperately needs to be working toward. As a result of years of major cuts to the education budget, Oklahoma has one of the nation’s lowest per-pupil expenditures. So even though we fund high and low poverty districts at similar levels, the equal funding is equally low. And we’ve yet to see any real ideas from state lawmakers to change that.