How Poverty Estimates Affect Title I Allocations

In this month’s issue of the Title I Monitor (subscription needed), former Congressional Research Service analyst Wayne Riddle describes the effect new 2008 Census poverty data will have on Title I State Grants in 2010.[1] He finds that though some states experienced significant changes in the number of school-age children living in poverty from 2007 to 2008, the impact of these changes on actual Title I allocations will be small. This occurs because Title I formulas take into account how a state’s share of the impoverished population changes relative to other states’ shares, not how a state’s impoverished population changed independently.

Federal Title I funding is subject to the annual appropriations process. As a result, state allocations are based on shares of a fixed level of funding set each year that does not adjust to the number of eligible children. This means that if a state experiences a 5 percent increase in the impoverished population from 2007 to 2008, its Title I allocation may actually drop because the overall increase in the impoverished population was 7 percent across the country.

The actual changes in school age poverty counts are somewhat more complicated. Some states, such as Florida, Arizona, Illinois, and California, experienced increases of 6 percent or more in their impoverished populations from 2007 to 2008. However, the percentage change in each state’s share of the overall number of impoverished students was smaller than the actual growth. For example, even though Florida’s impoverished population grew 7.4 percent, its share of the total impoverished population only increased by 6.6 percent. This means that the increase in Florida’s Title I allocation for 2010 will not be as large as its increase in poor students.

Conversely, states whose impoverished populations shrunk significantly, such as Alabama, Massachusetts, Nebraska, and Wyoming, experienced an even larger drop in their share of the country’s total impoverished population. For example, Massachusetts saw a 10.4 percent decrease in the number of students living in poverty. However, it saw an 11.4 percent decrease in its total share of the impoverished population. As a result, Massachusetts will experience a decrease in its Title I allocation for 2010 that is larger than the drop in the number of poor students.

These changes, while complicated on the surface, could spell trouble for states with rapidly growing poor populations. If the growth in Title I allocations does not keep pace with the growth in the number of poor students, schools may be unable to provide some services for these needy populations over time. Additionally, the lag in Census poverty data – two years at this point – means that the allocation of federal funds cannot be immediately responsive to economic disruptions like the current fiscal crisis.

These issues, as well as other pressing problems with the current iteration of the Elementary and Secondary Education Act, should be tackled during the reauthorization process. Now, more than ever, we need flexible and responsive federal education programs.