Distribution of School Improvement Grants among Schools Varies Widely by State

School Improvement Grants (SIG), a federal program that provides funding to states to help support struggling schools, has been a topic of much discussion in the education policy community ever since Congress and the Obama Administration made it the target of major restructuring and a big funding boost under the 2009 American Recovery and Reinvestment Act. Now there is new insight into the effects of the policy and funding changes.

A new report from the American Institutes for Research (AIR), Baseline Analyses of SIG Applications and SIG-Eligible and SIG-Awarded Schools, follows the flow of SIG funds from the initial application process down to local school districts. The AIR report mirrors many of the findings of a recent Ed Sector report that compiled new SIG data, discussed in last month’s Ed Money Watch blog post. But the authors also find startlingly large variation among the states in the proportion of total SIG funding that states awarded to schools and in the number of SIG dollars that states spent per student.

First, some quick background on how the School Improvement Grant program works. The U.S. Department of Education distributes SIG grants, part of the Elementary and Secondary Education Act, to the states according to Title I formulas, and state education agencies ultimately distribute the funds to local education agencies (LEAs) based on school improvement proposals those LEAs submit to the state for each eligible school. A state agency cannot distribute more than $2 million per year to an individual school. States rank eligible schools as Tier I, II, or III according to the severity of their needs as determined by student achievement, high school graduation rates (if applicable), and other, state-defined benchmarks.

States are required to provide funding for Tier I and II schools before Tier III schools; so predictably, the report finds that Tier I and II schools tended to receive larger awards, as a proportion of total spending in those schools. But even this trend, the authors found, was not the case in all states. For example, Louisiana Tier III schools received a 9 percent bump in total funding as a result of SIG funds, whereas SIG funds comprised only a 3 percent increase over baseline spending in Tier I and II schools.

Discrepancies among states in the size of funding awards for Tier I and II schools are more apparent when looking at the authors’ analysis of how states spent SIG funds on a per-pupil basis. Kansas awarded $3,150 per SIG school student and Alabama awarded $3,740. Both states made awards above the national average of $1,330 per student in SIG awards and far exceed the less-than-$500 average per-pupil awards in Louisiana ($380) and Vermont ($410). In four states, SIG awards accounted for an increase in total per-pupil expenditure of only six percent or less. In eleven states, the SIG spending resulted in an increase of 30 percent or more.

The authors find that in some states SIG awards do not account for significant increases in spending, either overall or per pupil, while in others the increase is quite dramatic. This leaves readers to wonder whether these inequities in SIG funding could undermine the efficacy of the program because the funds will not have an equal impact in schools across states. With such clear inconsistencies across state borders, the question arises: What is the value of a SIG dollar from state to state, district to district, and school to school?

School Improvement Grants constitute a substantial chunk of change—$3.5 billion available through the end of the 2013 school year, with funding supplied via the 2009 regular annual appropriation and supplemented by one-time funds from the American Recovery and Reinvestment Act. But, as the report shows, states distributed the funds in different ways and there is no guarantee that the money will benefit students as much in one state as in another. To be sure, per-pupil expenditure is not a singular determinant of student success—how states and schools spend that money is a far greater factor—but the availability of resources for each student is critical nonetheless. It’s also the implicit purpose of the SIG program.

The Obama Administration in its ESEA reauthorization proposal renames the SIG program School Turnaround Grants and reinforces the structure of the program currently defined in regulations. However, the AIR report casts some doubt on the efficacy of that design, suggesting that there is room for improvement in the program, particularly in ensuring adequate per-student SIG awards. As Congress gears up to consider changes to the ESEA this year, lawmakers should bear in mind these findings on the School Improvement Grant program.