A Better Way to Take State Education Spending Into Account under Title I
The use of statewide per pupil spending in the Title I formula is supposed to account for state-to-state differences in the cost of running schools. However, it is probably a better measure of differences in the ability of state to generate tax revenue and in the level of public commitment to fund schools. It results in significantly less money going to high poverty rural schools that are disproportionally in low-wealth and low spending states.
Two reforms could help change this.
First, the minimum figure for state spending could be raised to 90% of the national average, up from its current 80%. This would increase funding levels in 22 states, 14 of which are in the top half of states with the highest student poverty rates. Most of these are very rural, Southern states, including Alabama, Arkansas, Louisiana, Mississippi, Missouri, New Mexico, North Carolina, Oklahoma, South Carolina, and Tennessee.
Second, a state’s per pupil spending could be adjusted to reflect the level of poverty among the students in its schools. This would be consistent with the policy objective of trying to concentrate more funding where poverty is more highly concentrated.
A poverty index could be calculated for each state by dividing its Title I eligibility rate (the percent of its students who qualify for Title I funding) by the national average. Let’s call that the Title I Eligibility Index. The state’s average per pupil spending figure could then be multiplied by it Eligibility Index, and the resulting figure used in the Title I formula.
For example, the national average Title I eligibility rate is 18.1%. But in Mississippi, it’s 27.2%. So Mississippi’s Eligibility Index would be 1.50 (27.2 divided by 18.1 = 1.50). Mississippi’s state spending level would then be adjusted from $6,999 to $10,514 ($6,999 times 1.50 = $10,514). The same 80% floor and 120% ceiling would be applied to this adjusted figure.
Some states would have an Eligibility Index below 1.0, because their eligibility rate is below the national average. However, there are high-poverty school districts in these low-poverty states. These districts would be significantly affected by the use of an Eligibility Index. Therefore, the index would only be applied to states with above average Title I eligibility rates. Others would receive an Eligibility Index of 1.0.
The use of an Eligibility Index would not only be consistent with the objective of targeting high poverty districts, but would provide a tangible incentive for high-poverty states to increase education spending because their spending increase would leverage additional funding from Title I. Every dollar increase would be weighted in the formula by the state’s Title I eligibility index.
Click here to see how your state would be affected by these reforms.
