Rural School Snub: The Inequity of Title I Funding

For nearly a century, rural America has been caught squarely in the crosshairs of industrial agriculture and manufacturing decline. This has led to an outflow of economic capital that has unraveled the fabric of rural places, destabilized civic infrastructure, and eroded social resources. To date, efforts to stem this tide have been largely unsuccessful.

One area where policy has provided rural regions with a funding stimulus is “Title I,” the federal funding program that provides local school districts with resources to improve the academic achievement of disadvantaged students. Title I is part of the 1965 Elementary and Secondary Education Act, and has been reauthorized by Congress under different names— “No Child Left Behind” being the latest iteration.

Title I is the largest source of federal funding for local schools, and it makes grants to states which are then redistributed directly to schools. A local school district qualifies for Title I funding by submitting a plan to the state education agency on how it will use funds to improve academic achievement among disadvantaged students. “Disadvantaged” students include children from low-income families or foster homes, and those who are neglected or delinquent. Children from families receiving temporary assistance from state governments are also included.

Local school districts have latitude in how Title I funds are utilized, and if more than 40% of the students in a given school qualify as disadvantaged, the school is allowed to use Title I funding to support programs serving all students. Obviously, given its flexibility, Title I funding is of the utmost importance to rural schools mired in the revenue triangulation of tax base erosion, declining student numbers, and state budget crises. Sadly, when it comes to poor rural schools, Title I distributions are not equitable.

Marty Strange, former director of policy for The Rural School and Community Trust, reports the education of a disadvantaged rural child is worth only half as much as the education of a disadvantaged urban child to the federal government; as an example, he looks at two Philadelphias. The Philadelphia School District in Philadelphia, PA (population 1.5 million) receives $2,424 for each of the 33.6% of its students who are disadvantaged, while the Philadelphia School District in Philadelphia, MS (population 7,300), receives $1,246 for each of the 41.3% of its students who are disadvantaged. Undeniably, the needs of both communities’ students are equally compelling, but it is puzzling how disadvantaged children from Mississippi—a poor state—receive only half as much aid as a poor child from Pennsylvania—a rich state.

So how does this happen? Strange and his colleagues blame Title I funding discrepancies on how “number weighting” interacts with state education spending in a dizzyingly Byzantine funding formula. Here is how it works:

Title I actually provides four different kinds of grants to public school districts. The four grant streams are called Basic Grants, Concentration Grants, Targeted Grants, and Education Finance Incentive Grants (EGIF). Each of the grants has a slightly different eligibility criteria based on variables including the number and percentage of disadvantaged students, a state’s ability to provide financial support for education in relation to its per capita income, and the degree to which education expenditures among school districts in states are equalized. School districts can receive one or more of these grants, but all grant funds are combined into one lump sum and there is no distinction made in how the funds can be used, or in the reporting requirements.

Congress appropriates money separately for each grant program, but at this point the calculation toward “authorization” is the same. The formula is the number of Title I students in each district multiplied by 40% of the statewide average per pupil spending, using the assumption that a disadvantaged child requires 40% more funding than other students. The product is the district authorization, and the national authorization is the sum of all districts’ authorizations.

Not surprisingly, Congress never appropriates enough money to fully fund the national Title I “authorization,” resulting in a “sharing pool,” which, after another round of alchemy, ends up with about 550 school district number weighting winners and about 10,760 number weighting losers. These losers are typically:

• small districts with high poverty rates,
• small-to-moderate sized urban districts with high poverty rates,
• and nearly ALL districts in states with very large urban districts.

Of the nation’s 900 poorest rural districts, 797 lose $54.5 million, an average of more than $68,000 per district.

Rectifying this funding disparity has been the goal of the Rural Trust’s Formula Fairness Campaign, an effort joined by 26 other policy-oriented organizations from throughout the country. This campaign has resulted in the All Children are Equal Act (H.R. 2485), a bi-partisan bill that “would reign in number weighting so that funds are better targeted to high-poverty schools.” ACE will likely be considered as an amendment to the Republican reauthorization bill, the Student Success Act, in the very near future.

In the current contentious and unproductive political climate, it is hard to say whether or not a more sensible and fair Title I funding formula bill can garner approval. Regardless of the outcome, when it comes to the unimpeded stampede of capital out of rural places, the fight over Title I funding is akin to haggling over the milk pail while someone is stealing the cow.

Feature photo:  cc/R. Alton