The Program:  The Title I Education Program for the Disadvantaged (title one of the Improving America's Schools Act) is the largest federal education grant and the fourth largest federal formula grant of any kind.  In 1997, Title I distributed $7.3 billion among states, of which California received 10.8% ($810 million).

California's Needs:  Title I is focused on poor K-12 children, and California's high child poverty figures would lead one to expect a high Title I share for the state.  Approximately 60% of the children added to the nation's poverty rolls between 1980 and 1990 were in California, and the recession of the early 1990s further worsened the situation.  In 1993, the state's child poverty rate of 24.1% was well above the national rate of 20.4%.

Actual Receipts:  Yet California receives a much smaller share of Title I dollars than its share of eligible children.  With 13.45% of the nation's eligible children, California receives just 11.37% of federal Title I dollars.

Poverty Data Lag:  One key reason for California's low share of Title I funds is that poverty figures historically have been only updated every 10 years.  As late as 1992, the program was funded based on 1980 census numbers for poverty.  The result has been that many Title I dollars are sent where needy children used to be, instead of where they are now.  California's additional poor children were not being served.

An Update to Fix the Problem:  A partial remedy was devised during the 1994 rewrite of the Elementary and Secondary Education Act, when Californians successfully pushed to require updating between censuses.  The Administration released the first updated estimates in 1997, for use in the allocation of 1998 funds.  After hearing from proponents of the update (from California and other fast-growing states) and opponents of the update (from states with relatively stagnant growth), the Clinton Administration split the difference -- deciding that 1998 funds for Title I were to be based 50% on 1990 census numbers and 50% on 1994 numbers (which were higher for California because of increased numbers of poor children).  Even with this 50-50 compromise, California's share of Title I would have jumped considerably.

But Senators from Shrinking States Intervened:  However, Senate appropriators from losing states stepped in and blunted the shifts in May 1997 by giving losing states $101 million from emergency supplemental appropriations funds to compensate for reductions in their states' FY 1997 allocations.  (Paradoxically, the declining school districts within growing states actually received no extra money.)
Then, in November 1997, a 100% "special hold harmless" provision was inserted stating that no school district in 1998 could receive less than it received in 1997.  The special hold harmless provision, added by Senator Tom Harkin (Iowa stood to lose funding) and other Senators, effectively prevents school districts in California and other growth states from receiving the further gains to which they are entitled.  Rather than having funds follow poor children, the hold harmless kept funding levels static, regardless of where needs were greatest.

Growth States' Goal:  California and its growth state colleagues are not seeking more money, but rather a fair allocation of the funds based on where the children are -- as was intended by the law.  While little may be done about the shortchanging of FY 1998 allocations, redistributional changes are sought for FY 1999.
FY99 Developments: The Senate's FY99 Appropriations bill reportedly includes $300 million in additional funds, some of which would be used to compensate states harmed by the imposition of last year's special hold harmless.  While details are still under review, if California received $60 million of these new funds, the state share of U.S. funds could rise from 11.37% to 11.73%, or from $830 million total to $892 million.  While not representing California's share of the total burden, the increase would move the state closer to an equitable level, such as the state's 13.45% share of Title I eligible children, or our 14.1% share of the nation's total poor children.

Click here to link to a state-by state graphic comparing federal Title I spending per poor child (in PDF format).   OR view same graph document in "GIF" format.
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