Every Dollar Counts: In Defense of the Education Department's “Supplement Not Supplant” Proposal

Every Dollar Counts: In Defense of the Education Department's “Supplement Not Supplant” Proposal
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Senate Health, Education, Labor and Pensions Committee Chairman Sen. Lamar Alexander, R-Tenn., shakes hands with Antonio Martin, left, of Arlington, Va., as the committee's ranking member Sen. Patty Murray, D-Wash., shakes hands with Sofia Rios, of Arlington, Va., after President Barack Obama signed the Every Student Succeeds Act. (AP)

RCEd Commentary

Evidence compellingly demonstrates—as Congress famously recognized in Title I of the Elementary and Secondary Education Act of 1965—that children from educationally disadvantaged backgrounds require more educational resources than other students. Yet, a half century later, many school districts still spend less money on high-poverty schools than on more privileged schools.

In 2011, a study by the U.S. Department of Education discovered that nationwide, more than 40 percent of schools eligible for Title I funding based on their high-poverty status receive less state and local funding for instructional and other personnel costs than non-Title I schools in the same districts at the same grade level.

A more recent study confirmed that more than 4.5 million low-income students attend Title I schools that on average receive about $1,200 less per student than non-Title I schools in the same district.

These disparities result from two steps districts often take: (1) letting their most experienced and highly salaried teachers opt into schools with more privileged students, leaving Title I schools with less experienced, lower-salaried teachers; then (2) disguising how many fewer dollars Title I schools spend on instruction than more advantaged schools by omitting teacher salaries from school-funding comparisons.

To remedy this situation, the Education Department recently proposed a regulation requiring districts to account for all aspects of local funding of schools in demonstrating, as the law requires, that they use Title I funds only to “supplement” and not “supplant” local funds.

The civil rights community supports the proposal, but teachers unions and congressional Republicans vehemently oppose it, because it disrupts funding patterns favoring non-Title I schools that benefit their constituents.

Recently, the Congressional Research Service added a seemingly show-stopping legal objection: that the proposal is barred by the ESEA statute itself. The CRS is wrong. The Department’s proposed regulation is appropriate—indeed imperative—to ensure high-poverty schools the funds to which the ESEA legally entitles them.

Title I’s Goal of Compensatory Education

In 1965, as part of his War on Poverty, President Lyndon Johnson signed the ESEA into law—“the most far-reaching and significant education legislation in the history of this country.”[1]

Title I of ESEA—the statute’s “crown jewel” —gives school districts with large numbers of low-income students federal dollars to spend. Congress based Title I on two insights: (1) schools with high concentrations of children in poverty need substantially more funding than other schools to compensate for the negative learning effects of economic deprivation, and (2) the federal government has a key role to play in providing funds to even the playing field for those children. For these reasons, the statute forbids districts to use Title I funds to improve schools generally and requires that they use the money as direct assistance to schools serving many poor children.[2]

Subsequent research conclusively validates Title I’s premise that low-income children concentrated in particular schools require more resources and more services to achieve the same educational outcomes as their more privileged counterparts.[3]

The Requirement to Supplement, not Supplant

Soon after ESEA was adopted, researchers discovered that Title I was not achieving its compensatory ambition because districts were using Title I funds in place of, and not in addition to, state and local funds. Instead of providing resources for low-income students beyond those available to other students, districts were using the money to buy baseline books and supplies and pay everyday operating costs and salaries at Title I schools. This enabled districts to divert the dollars previously spent on Title I schools’ basic needs to more privileged schools. [4]  

In response, Congress amended the ESEA in 1970 to require districts to use Title I funds to “supplement and, to the extent practical, increase the level of funds that would, in the absence of such Federal funds, be made available [to low-income schools] from non-federal sources . . . and . . . in no case, to supplant such funds from non-Federal sources” (§109(a)).  

When Congress adopted these amendments, there was a simple indicator of the amount of local dollars districts would have spent on Title-I schools “in the absence of federal funds”: the amount of local funds spent on those schools as of 1964, just before the ESEA was passed. A sudden decrease in local dollars for Title I schools after federal funds became available strongly suggested that the district unlawfully intended to supplant local with federal dollars.

Today, however, using historical baselines to estimate the amount of local funding districts would provide to low-income schools absent federal funds would entrench the underfunding of public schools and especially high-poverty schools. [5]

Additionally, historical baselines are no longer workable. For 50 years since ESEA’s adoption, districts have supported Title I schools with combinations of local, state, and federal dollars, to the point that it is impossible to look backwards to decide what the pre-Title I historical baseline for local funding might be.

So, not surprisingly, when Congress reauthorized the ESEA last year in the Every Student Succeeds Act (ESSA), it told the Department to stop using prior funding levels in deciding whether districts were “supplanting.”

Congress also stopped the Department from assuming that supplanting was taking place if districts used Title I funds to provide services for which local funds were used in other schools, because that encouraged districts to segregate poor children in “pull-out” rather than “mainstreamed” settings.

More generally, Congress rejected various indirect tests the Department had long used to assess supplanting, because they shed little light on whether districts were allocating funds in keeping with a forbidden motivation to supplant.

Although the new ESSA law bans the Department’s prior method of determining if a district’s funding of Title I schools aims to supplant local with federal funding, the law actually strengthens the “supplement not supplant” requirement. For the first time, the law explicitly requires districts themselves to demonstrate compliance” with the non-supplanting requirement (§6321(b)(2)).  

ESSA, however, does not say how districts must make that demonstration—leaving the Department to figure out anew how a district can show that its funding is not designed to use federal dollars to supplant local spending.

Established Ways to Assess Motivation

One way to assess an actor’s motivation, such as a motivation to supplant local funding, is to inquire directly into the actor’s subjective thoughts and beliefs—as often happens in criminal cases in court.

When, however, the task of assessing motive is assigned to a federal agency, and the actors in question are local public servants, this sort of “prosecutorial” inquiry creates a huge risk of federal overreaching. Additionally, the Education Department has over 13,000 school districts to oversee, so the cost of using the prosecutorial approach would be enormous.

For these reasons, Congress and federal agencies—starting with laws forbidding racial, ethnic, and age discrimination passed at the same time as the ESEA—often take a different, more objective, approach to assessing motivation. That approach begins by asking what the result would be—what the relevant actor would do; what the objective facts would look like—if the actor were proceeding according to the unlawful motivation. 

If the actor acts in a way or achieves a result that is consistent with the forbidden motivation, the next step is to require the actor to come forward with a different, legitimate explanation for the steps it took and the results it caused. If it can do so, it avoids liability.

Suppose the Education Department wanted to apply this objective approach in deciding whether local officials were allocating funds with the unlawful intention of supplanting local funding for Title I schools with federal dollars. The Department would first ask what school districts would do—what objective results they would trigger—if they intended to spend less money on Title I schools than otherwise because they knew federal Title I dollars would make up the difference.

The district would probably spend less local money on one or more Title I schools than it spends on the average of its more privileged, non-Title I schools. Doing so would let it divert local money from Title I schools to non-Title I schools and use federal dollars to make up the difference.

The fact that one or more Title I schools receive less in total local funding than do the run of all non-Title I schools would suggest—not conclusively, but enough to warrant further inquiry—that the district gives Title I schools fewer local funds because they are Title I schools. Under the objective approach, the district would then have to demonstrate a legitimate reason for directing fewer local dollars, all told, to Title I than to other schools.

The Reasonableness of the Department’s Proposed Regulation

In fact, the Department’s proposed regulation operates exactly this way. Instead of subjecting public officials to a prosecutorial examination of their innermost thoughts, the proposal asks whether a district is behaving consistently with a forbidden motive to supplant: whether it provides one or more Title I school with less in the way of local funding, all told, than it provides on average to non-Title I schools.

If the district does act in this manner, the regulation recognizes three common situations in which it assumes that the district nonetheless has a legitimate, non-supplanting reason for giving more local funds to non-Title I schools than to Title I schools: when they have only one elementary, middle, or high school; when spending disparities between Title I and non-Title I schools disappear if funding is considered by grade and not by school (because some grades cost more than others), or when disparities disappear if spending on very small schools is omitted from the calculation.

Only if none of these exceptions applies does the Department’s proposal require districts that spend fewer local dollars on Title I than on non-Title I schools to give an explanation other than supplanting for doing so. The Department’s proposal, that is, invites districts to identify any “special circumstances related to a particular [non-Title I] school’s population of disadvantaged students” that justify the district in spending heavily on that school.

Any such school is then removed from the calculation of the district’s overall funding on its non-Title I schools. If doing so erases the funding disadvantage for Title I schools, the “supplement not supplant” requirement is satisfied.

The Department thus proposes an entirely familiar and sensible approach for resolving the difficult motivational question posed by the “supplement, not supplant” requirement—an approach that federal courts and agencies have used for decades in similar situations.

In fact, ESSA—Congress’s 2015 reauthorization of ESEA—rather clearly invites the Department to use this objective approach.

First, ESSA for the first time requires districts to collect and publically report on exactly how many local, state, and federal dollars—including dollars devoted to teacher salaries—they spend on each of their schools. In addition, as noted, ESSA for the first time requires districts to “demonstrate” that their way of allocating local funds isn’t designed to use Title I funds to supplant local dollars.

ESSA’s first addition gives the Department everything it needs to take the initial step in the objective approach: comparing all of the local funding of Title I and non-Title I schools to see whether the former schools receive fewer local dollars than the latter ones.

The second addition invites the Department to do just what its new regulation proposes: require districts that act consistently with a motive to supplant by spending less on Title I than on other schools, to “demonstrate” a legitimate reason for spending local funds as they do.

The proposed regulation is also commendable because it can easily be improved through the public comments the Department soon will solicit. For example, the Department might broaden its definition of acceptable reasons for funding non-Title I schools more richly than Title I schools. That definition currently encompasses any policy that serves the needs of disadvantaged students in non-Title I schools.

The Department might instead credit policies that equally serve important educational or learning needs of any of the district’s school children in ways that cannot be accomplished as well or better without spending more money on non-Title I than on Title I schools.

If, for example, a non-Title I school is shown to be the least expensive location for equipment needed to expand internet access to all of a district’s schools, that would legitimately explain the disproportionate funding to the district’s non-Title I schools.

On the other hand, a policy of retaining effective teachers by paying them extra or letting them opt to work in non-Title I rather than Title I schools would not suffice. The benefits of that policy would not be equally available to all students in the district, and the objective could as easily be accomplished by giving effective teachers extra compensation for working in schools that currently have no or few experienced or effective teachers.

There thus are three good reasons for the Department’s proposed regulation: the many problems with a prosecutorial inquiry into subjective motivation; the strong precedents for the objective approach; and ESSA’s invitation to adopt the objective approach.

Responses to Objections

Without mentioning the longstanding precedents and statutory invitation for the Department’s objective approach, a recent Congressional Research Service Report offers two unconvincing objections to the proposed regulation.

First, the CRS suggests that the regulation violates a part of the reauthorization statute that forbids the Department to force districts to equalize per-pupil spending.

The proposed regulation, however, clearly does not require equalized funding. Consistently with Title I’s fundamental premise, the regulation assumes that Title I schools typically should receive more local, state, and federal funding per pupil than the average received by non-Title schools—the opposite of requiring equal per-pupil expenditures for each school considered separately.

Additionally, through its three exceptions and its catch-all invitation, the proposed regulation recognizes many educationally sound reasons why non-Title I schools may receive more funding per student than Title I schools—and why individual Title I and non-Title I schools will receive different amounts of per pupil funding than other schools in their own category.

The proposed regulation thus is no more a requirement of “equalization” than the Civil Rights Act of 1964 or the Age-Discrimination Act is a requirement that all employers have a race- or age-balanced workforce. Like those precedents, the proposed regulation allows unequal outcomes whenever there is a legitimate reason for them.

The CRS’s second objection is even more convoluted. That objection focuses on a part of the ESEA called the “comparability of services” rule.

When Congress adopted the “supplement not supplant” rule governing the “level of [local] funds” districts provide to Title I schools, it also required school districts accepting federal support to provide comparable “services to Title I and non-Title I schools. To comply with this requirement, districts must show that their policies ensure equivalent per-pupil numbers of teachers, administrators, and supplies across schools.

The comparability rule then adds an important caveat: the fact that some teachers make more than others based on seniority may not be considered in deciding whether there is per-pupil equivalence of services across schools. In other words, if one school has 10 rookie teachers and 300 students, and another school has 10 much higher paid long-term veterans for 300 students, the two schools are deemed to have “comparable” instructional services.

As the CRS admits, if this caveat is applied not only to the distribution of “services” but also to the distribution of “funds,” districts could systematically assign their most experienced, most expensive teachers to non-Title I Schools and thus spend far less on instruction at Title I than at non-Title I schools.

Doing so, of course, would directly contradict Title I’s recognition that low-income schools need more funds for instruction. Even so, CRS suggests that, without ever saying so, Congress intended the treatment of teacher salaries it wrote into the “comparability” rule to apply as well to the “supplement not supplant” rule.

This interpretation is flawed.

The “comparability” and “supplement, not supplant” provisions are distinct, and must be interpreted as distinct. As their words plainly signify, comparability applies only to the distribution of “services”; supplement, not supplant applies only to the expenditure of “funds.” 

This distinction must be given operative significance, or each provision would render the other superfluous—violating a well-established rule against interpreting statutes to contain redundancies or superfluous provisions.[6]

Congress itself has always treated the two rules distinctly. It limits the comparability rule to service differentials other than those tied to differences in teacher seniority but has never applied a parallel caveat to the “supplement not supplant” rule.

By reading into the statute a requirement Congress added in one place but left out of another, CRS violates another established rule of statutory interpretation—that Congress is assumed to have intended “the exclusion of language from one statutory provision that is included in other provisions of the same statute.”[7]

Congress has perfectly sensible—indeed, compelling—reasons for treating the distribution of services and funds differently in regard to teacher seniority and salaries.

Absent the “teacher seniority” caveat, the requirement of comparable teacher services might be thought to depend on the quality of each individual teacher providing services. If that were so, the comparability provision would require districts to rate each teacher to identify how much “value added” each provides, and then use the aggregate of all teachers’ “value added” to see if different schools get less or more.

As Congress recognized, there are serious problems with using teacher seniority or salary as a proxy for teacher quality: it is inaccurate; administratively burdensome, given the many millions of teachers nationwide who districts would have to individually rate; and demoralizing to teachers, some of whom districts would have to declare less worthy than others.

The simple solution is the one the ESEA’s comparability provision has long used: treat each teacher as equal to all others by defining comparability of services in terms of pupil-teacher ratios.

The “supplement not supplant” rule is very different. It applies to something classically and inherently fungible: money. 

Because each dollar actually spent is no different from or more administratively burdensome to track than any other dollar, no matter what the dollar pays for, there is no reason for districts not to count every dollar spent on each of its schools, including dollars spent on teachers—which is exactly what the new Act requires districts to do and to report publicly.

There thus is no inconsistency for Congress to treat each teacher the same when talking about services, and each dollar the same when talking about spending. And it makes perfect sense for the Department to use the spending data that Congress now requires districts to make public—and that it says must treat dollars spent on teachers the same as dollars spent on everything else—when applying the “supplement not supplant” rule.

The worst aspect of CRS’s position is that it leaves the Department with no viable way to determine whether districts are intending to supplant local with federal dollars.

According to the CRS, the reauthorization law neither “establish[es]” nor evidently allows “any type of standard or requirement regarding how to demonstrate that a Title I school receives all of the state and local funds it would have received in the absence of Title I funds.” In other words, CRS’s untenable conclusion is that the law forbidding districts to supplant local funds with federal dollars is unenforceable—even though the reauthorization law both retains and strengthens the “supplement not supplant” rule.

Conclusion

We know that children from low-income families need more funds to succeed in schools than their more privileged counterparts. Working from this premise, Congress designed Title I to provide compensatory funds to poor children.

Since then, in the face of various attempts to undermine this goal, amendments to Title I have stood by this core principle, including by insisting that districts use Title I funds to supplement, not supplant, local funds for disadvantaged children.

Today, poor children face yet another threat to Title I’s compensatory purpose: efforts to read the caveat barring the counting of teacher salaries for purposes of “comparability of services” into the rule requiring districts to supplement not supplant local with federal funds”—even though Congress has omitted that caveat from the “supplement not supplant” for 50 years.

Relying on this specious interpretation, and exploiting the difficulty of proving a subjective motivation to underspend on Title I schools, some districts seek to exclude from “supplement not supplant” consideration the many millions of dollars they spend on the salaries of their most effective and experienced teachers, who are disproportionately deployed to economically privileged non-Title I schools.

If allowed, this stratagem would provide many fewer local dollars to Title I than to other schools, in direct violation of Title I’s compensatory purpose.

To preserve Title I, the Education Department has crafted a reasonable regulation, which uses a long-established and well-respected, method of identifying actions taken pursuant to an unlawful motivation—in this case, a motivation to supplant local with federal funds.

It is unsurprising that the regulation is under fire from partisan constituencies that hope to preserve the local funds districts have been diverting to economically advantaged schools by concentrating their most experienced and effective teachers there and not counting the extra dollars they spend on those teachers.

It is surprising, however—and regrettable—that the non-partisan Congressional Research Service has lent aid and comfort to this effort through poorly reasoned legal arguments.


[1] Phyllis McClure & Ruby Martin, Title I of ESEA: Is it Helping Poor Children? i (1969).

[2] Id. at 4.

[3] E.g., Richard Kahlenberg, All Together Now 2 (2003) (“fifty years of sociological data” show that “being born into a poor family places students at risk, but to be assigned then to a school with a high concentration of poverty poses a second, independent disadvantage that poor children attending middle-class schools do not face.”).

[4] McClure & Martin, 5.

[5] Michael Heise, State Constitutions, School Finance Litigation, and the Third Wave, 68 Temple. L. Rev. 1151 (1995) (citing state court decisions).

[6] See Hibbs v. Winn, 542 U.S. 88, 101 (2004).

[7] Hamdan v. Rumsfeld, 548 U.S. 557, 578 (2006).

 

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