Bennet, Cochran Make Bipartisan Push to Close 'Comparability Loophole,' Improve Education Funding Equity

Bill Would Close Long-Standing Loophole that Results in Low-Income Schools Subsidizing High-Income Schools

Washington, DC – Colorado U.S. Senator Michael Bennet today introduced a bipartisan bill with Senator Thad Cochran (R-MS) to close a long-standing loophole in federal law that often results in low-income schools subsidizing their more affluent counterparts.  The loophole also often means that Title I funds do not always meet their intended purpose. Rep. Chaka Fattah (D-PA) introduced the companion bill in the House. 

“All too often, well-intentioned policies hatched in Washington do not work the way they were intended once they reach America’s classrooms, and that’s exactly the case with the ‘comparability’ provision under Title I,” said Bennet, former superintendent of the Denver Public Schools. “We are one of only three developed countries to pump more money into affluent schools than low-income schools. That needs to change, and closing this loophole is a common-sense step we can take to ensure every single student has a shot at a quality, competitive education.”

“This legislation seeks to ensure that school districts receiving Title I funds provide their high-poverty schools with a fair share of state and local resources by closing loopholes in the requirement language,” Cochran said.  “By requiring a more accurate picture of state and local investments in schools, federal dollars can be better directed to the children most in need of those resources.”

“Equity in education is not only a civil rights issue, it is an imperative investment for our national interest and readiness as a competitor on the world stage,” Congressman Fattah said. “To compete, innovate and excel in the world economy, we must have an educated work force – a fully educated work force.”

“This legislation would bring basic fairness to budgeting by school districts, holding them accountable for using federal dollars as Congress intends,” said Kati Haycock, president of The Education Trust, an education advocacy organization.  “By introducing this bill today, Sens. Bennet and Cochran have taken a commonsense approach to ensuring that high-poverty schools receive the funds they need to help their students achieve.”

Title I was created as part of the original Elementary and Secondary Education (ESEA) Act.  It is the largest program in ESEA and provides grants to districts with children living in concentrated poverty. It is designed to provide low-income schools with additional resources to meet high needs.  In order to receive Title I assistance, districts have to demonstrate that they are allocating their state and local resources equally among their high- and low-poverty schools. 

Due to a loophole, school districts can meet this requirement without actually accounting for dollars going into each school because they can use other measures like average teacher salary across the district to comply.  So, districts often end up providing more local funding to schools in affluent areas because they attract more experienced teachers who make higher salaries.  As a result, even with Title I assistance, low-income schools end up with less funding than higher-income schools.  In effect, low-income schools end up subsidizing their higher income counterparts.

The Bennet-Cochran bill, the Fiscal Fairness Act, would close the loophole and require school districts to report actual expenditures at the school-level, including those devoted to salaries for teachers, when applying for Title I resources. Closing this loophole will result in more equitable treatment of our schools.  It would also guarantee that the Title 1 program fulfills its original intent and delivers federal resources intended to help students in poverty succeed.

The Problem

Current law allows districts to use average teacher salary instead of actual expenditures when demonstrating compliance with the “comparability” provision. However, affluent schools are more likely to employ teachers who have more years in the classroom and who earn higher salaries, while high poverty schools have more teachers with less experience and who earn less. The result is that, on the whole, high-poverty schools spend less on teaching than affluent schools. But despite that discrepancy, districts can still meet comparability requirements by simply hiring the same number of teachers at high- and low-poverty schools on a per-pupil basis, regardless of what each teacher earns. 

The Solution

The Bennet-Cochran Fiscal Fairness Act would close the “comparability loophole” by requiring all district expenditures to be included in comparability determinations, including actual teacher salaries.  It also stipulates that state and local spending can vary among schools by no more than 3 percent. Current law allows a 10 percent funding gap, even when teacher salaries are excluded. Bennet’s bill will also require public reporting of per-pupil expenditures in each of a district’s schools.  The bill directs the Inspector General to conduct audits to ensure school districts are complying with the comparability requirement.

Bennet is a part of the extended negotiating team crafting a bill to reform No Child Left Behind.