Bill Would Require Districts to Spend “Comparably” In High-Poverty Schools

Last Updated: July 27, 2011

This article appeared in the July 2011 Rural Policy Matters.

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Hard as it may be for some to believe (although sadly familiar to many parents and advocates for low-income children), many school districts actually spend more state and local resources in schools with low poverty rates than they do on schools where a high percentage of students are dealing with the many educational challenges imposed by living in poverty.

This reality was one of the problems that Congress intended to address when it passed the Elementary and Secondary Education Act (ESEA) in 1965. ESEA provides funding to school districts through its Title I program to improve educational opportunity for the nation’s poorest children and youth. The law includes a “comparability” provision requiring districts to bringing spending of state and local funds in its high-poverty schools in line with spending in other schools. However, loopholes in the law, misinterpretation, and lax enforcement have resulted in widespread practices that actually reduce state and local expenditures at the poorest schools.

The Fiscal Fairness Act (H.R. 1294 and S. 701), introduced in March, would amend ESEA by requiring school districts that receive Title I funds to publicly report in detail their State and local instructional expenditures in each school and to demonstrate that State and local expenditures in the highest poverty schools are at least 97% of those in the district’s lowest poverty schools.

FFA Changes to ESEA

The new provisions would change several key aspects of ESEA comparability requirements.

Salaries Included: Current comparability requirements exclude teacher salaries from spending calculations at each school. Because the least experienced and credentialed teachers and administrators — those with the lowest salaries — disproportionately work in the highest poverty schools and because salaries are the largest portion of the education budget, differences in the experience level and qualifications of instructional staff are a major source of inequity between high and low poverty schools. The FFA would include salaries along with incentive pay, bonuses, and supplemental stipends in comparability calculations.

Raises Comparable Expenditures from 90% to 97%: Current requirements consider spending “comparable” when state and local spending in Title I schools is at least 90% of state and local spend in non-Title I schools. FFA would raise that percentage to 97%.

Aggregated Instructional Expenditures: FFA would enable all allowable expenditures to be aggregated for comparability calculations. It would also broaden the definition of expenditures to include salaries, professional development, instructional materials and supplies, technology, library and media resources, and contracted services such as distance learning. Aggregated expenditure calculations would give districts spending flexibility. For example, a school with low average salaries could reach comparability with additional resources for mentors, smaller classes, and other supports.

Reporting and Compliance: Under current law, districts must provide written assurance that they are meeting comparability requirements. FFA would require districts to demonstrate comparability by issuing school-level report cards detailing state and local expenditures in order to receive Title I funding. FFA would also require every state to create a list of per-pupil expenditures at each public school in the state.

What FFA Would Not Do

FFA would not alter the formulas that distribute Title I funding, so it does not address inequities (such as number-weighting) within the formulas. Nor would it address inequities in state and local funding between districts within a state.

FFA would not include local school fund-raising efforts such as PTA events, grants and donations, and community fund-raisers in comparability calculations.

Finally, FFA specifically states that it would not require the involuntary transfer of teachers in order to meet comparability thresholds.

Rural Impact

As in other locales, the reporting requirements of the FFA would encourage rural school administrators to be accountable to the poorest students and would give parents and communities more tools with which to advocate for their children if resource allocation appears inequitable.

Because the FFA requirements would not apply to districts with only one school for each grade span, many rural districts would see little impact.

The most broad-based effects of the FFA on rural schools would likely result from the requirement that states report per pupil instructional expenditures at every school. This information could reveal the very significant variation in funding levels that exist in most states.

But per-pupil expenditures can be difficult to accurately determine, are relatively easy to fudge, and present particular policy and public relations challenges for rural schools.

On one hand, information on per-pupil expenditures could draw attention to the problem of low average salaries in rural schools that make teacher recruitment and retention difficult. It could demonstrate how reliance on local property taxes creates inequities for rural districts resulting from low property values. In theory this information could lead states to make their finance systems more responsive to the needs of rural students and their schools.

On the other hand, distance, low population density, and fixed costs associated with small size can skew the appearance of what is actually being spent in rural schools.

For example, if principals are a “fixed” instructional cost and all other things are equal, a rural elementary school with 800 students will have lower per-pupil instructional expenditures than a rural school with 200 students. Or, viewed differently, the smaller school would appear to have higher per pupil costs because the “fixed” cost of the principal is spread out over many fewer students. But if the 800-student school has high transportation expenses, its overall per pupil expenditures might equal instructional expenditures at the smaller school. These two schools have very different needs and types of expenditures resulting from their different rural circumstances.

Distance is a uniquely rural factor that inflates costs for rural schools. For example, rural schools spend more on average for teacher recruitment, professional development, and a variety of goods and services because the school is located far from the urban centers where these resources are concentrated.

These examples demonstrate some of the complications inherent in rural school finance and oversimplifications can confound efforts to bring real equity to rural children.


The FFA would help improve the distribution of resources among schools and bring more opportunity to many low-income children, rural and urban. Its reporting requirements have the potential to spur other changes in the way states finance their schools that could help address some of the inequities that plague American education.

However, presentations of per pupil expenditures often suggest false economies of scale, rarely account for costs associated with distance and low population density, and do little to illuminate the ways in which fixed costs, however necessary, often deflect spending from instruction.

For these reasons rural education advocates and citizens will need to understand their school finance systems and be prepared to work with policy makers to insure that their schools get a fair share of the resources rural students need to succeed.

Read more from the July 2011 Rural Policy Matters.