Federal Formula Skews against Rural Schools

President Obama used the rural school district in Dillon, South Carolina, as an example of a place that could benefit from federal stimulus. He's right, but under current guidelines, rural school districts like Dillon are at a disadvantage.

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The new federal stimulus spending bill — officially, the American Recovery and Reinvestment Act of 2009 (ARRA) — provides an unprecedented, one-time infusion of education funding for states and schools.

Over $100 billion, $44 billion of which is now available, will be distributed by the U.S. Department of Education through a variety of existing and new programs. However, small rural districts may not benefit from this opportunity as much as their larger, urban counterparts —even if the rural districts serve needier student populations.

Here’s how it works.

The largest existing federal funding mechanism for poor districts and schools through which additional ARRA monies will be distributed is Title I, Part A of the No Child Left Behind Act of 2001, or the Title I program.  The program has been called “compensatory” because it provides funds to supplement education services to students at risk of failure because of the disadvantages associated with poverty.

The Department of Education distributes Title I funds to districts with large concentrations of impoverished students — but the method the Department uses tends to disadvantage rural districts.

The culprit is a provision in the Targeted Grant Program and the Educational Finance Incentive Grant Program that determines a district’s share of Title I funds. Districts may elect to use either the percentage of students or the absolute number of students who are eligible in their application for funds. Larger, nonrural districts often choose to count the number of students they have who qualify rather than using the percentage of students who qualify. Why? Because they receive a higher score — and more money — by reporting their large numbers of eligible students.

But the system also works in the other direction, to the detriment of smaller districts that have fewer students.  The way the formula works, a small school district with a high percentage of poor students earns less per student than a large school district with a smaller percentage of poor students. As a result, small rural districts receive a far smaller share of Title I funds, even if they serve larger percentages of impoverished students.

The Rural School and Community Trust recently gave some good examples of how this system worked against small districts. Dillon 02 school district in rural South Carolina receives $1,057 for each student qualifying under Title I. Dillon has a student poverty rate of 38.5%. However, the nearby Greenville school district — one of the largest in the state — receives $1,467 for each eligible student, but its poverty rate is only 13.8%.

The Rural Trust reminds us that Dillon, South Carolina, is the home of Ty’Sheoma Bethea, who wrote a letter to President Obama asking for help in repairing her decrepit school. The letter earned the 14-year-old a trip to Washington, D.C., to hear the President’s address to Congress about the need for a stimulus.

The J.V. Martin Middle School in Dillon, South Carolina.

Bethea’s school, the J.V. Martin Middle School, was built in 1896. In his first press conference as president, Obama recalled visiting the Dillon, South Carolina, school as a candidate.  “Kids are still learning in that school, as best they can,” President Obama said in a press conference in early February. “It’s right next to a railroad. And when the train runs by, the whole building shakes and the teacher has to stop teaching for a while.”

The Rural Trust continues:

“The poorest 800 rural districts enroll almost a million students and have an average poverty rate of 35.52%. They get a little over $1,200 per poor student in Title I stimulus. Among the seven urban districts with the largest enrollment of poor students, only Detroit has a higher poverty rate than the rural 800 and all seven get more per poor student in Title I funding—in both the regular federal budget and the stimulus package.”

Obama campaigned at Bethea’s school as a candidate in 2007.

Despite President Obama’s attention, however, the formula remains unchanged.

Because ARRA funds for Title I will be distributed via existing formulae, poor rural school districts will continue to receive smaller shares of the stimulus money than larger (and often richer) districts. Rural districts sometimes tax themselves at higher rates in attempts to catch up to the funding levels of wealthier localities. But many are unable to raise additional local monies due to eroded tax bases and other economic constraints. In these cases, Title I funds are vital to poor rural districts. 

One of the reasons Title I is so important to small rural districts is that some federal or state dollars are allocated on a per-pupil basis. In small districts with few students, these funds may not accumulate enough to support high quality programs. For example, although many rural districts serve increasing percentages of students who are just learning English (English Language Learners, or ELL), the total numbers of ELLs may still be so small that the per-pupil allocation to support ELL programming is negligible. Schools and districts in this situation struggle to offer the additional services ELL students need to thrive academically.

There is a fix to the Title I allocation issue: Eliminate weighting by the number of eligible students and distribute funds according to the percentage of Title I eligible students. Title I funds would then go to districts with high poverty rates, regardless of their size. This fix requires a change to the federal policy guiding the program. The upcoming reauthorization of the No Child Left Behind law is an opportunity to educate legislators about the effect of Title I weighted grants on small rural districts.

For now, rather than ameliorating funding inequities, the President’s stimulus package may exacerbate disparities by relying on existing distribution methods. But when Congress takes on the nation’s most important federal education policy, rural education advocates will have a chance to balance the scales so that the neediest rural districts get the support they deserve.

 

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