Chapter 4: Basic Grants—Formula Analyses

Basic Grants are the largest of the four Title I grants and accounted for 45 percent of Title I funds in fiscal year 2015 (FY 15) (table 1.A). Basic Grants are less targeted to the highest poverty districts than the other Title I grants. To qualify for a Basic Grant, a district must have at least 10 formula-eligible children ages 5–17, and that number must exceed 2 percent of the district’s 5- to 17-year-old population. In FY 15, Basic Grants had the highest number of formula-eligible children (11.6 million), and the average Basic Grant allocation per formula-eligible child was $550 (all allocations herein are averages) (table 4.A).

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Formula Alternatives

Basic Grants have fewer formula provisions than other Title I grants (see Introduction, Methodology for Allocating Federal Title I Funds). Since there are fewer provisions in the Basic Grant formula, a smaller range of formula alternatives are examined in this chapter compared with Concentration Grants, Targeted Grants, and Education Finance Incentive Grants (EFIG). Similar to other Title I grants, Basic Grant allocations were computed using the formula-eligibility criteria only as well as alternatives that exclude the state per pupil expenditure (SPPE), state minimum, and hold harmless provisions. When only the formula-eligibility criteria were considered, the allocation computations were essentially made on a per eligible child basis, so the differences in Basic Grant allocations and Concentration Grant allocations among school districts of various types were smaller than those observed under other alternatives. There are no weighting provisions for Basic Grants as there are for Targeted Grants and EFIG. When the SPPE provision was removed from the formula, the same expenditure per student was used for each state, and there were no minimum and maximum thresholds. In general, removal of the SPPE provision meant that states with lower expenditures per student received higher allocations, while states with higher expenditures per student received lower allocations. Excluding the state minimum provision meant that states with smaller population sizes typically received lower allocations since there was no minimum threshold on funding levels.

The hold harmless provision limits the amount of a decrease for a district from one year to the next due to population changes. It is important to note that unless a formula provision is removed in conjunction with the hold harmless provision, the long-term impact of removing the other provision may not be fully reflected in the resulting allocation. So, when a provision such as the state minimum is removed from the formula and the hold harmless provision is maintained, the districts in the state are limited to a reduction of no more than 15 percent per year. The national Title I funding level was the same across all alternatives. Since the allocation was based on a fixed appropriation amount, increases or decreases for some districts had to be matched by increases or decreases for others. For example, maintaining hold harmless amounts for some districts meant that some other districts with increases in formula-eligible children did not receive additional funding.

Two combinations of provision removals are analyzed in this chapter, both including removal of the hold harmless provision, which provides an example of the long-term impact of removal of other provisions. One combination looks at removal of the SPPE and hold harmless provisions, and the other combination looks at removal of the state minimum and hold harmless provisions.

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Formula-Eligibility Criteria Only

In FY 15, when only the formula-eligibility criteria were considered for Basic Grants, the ranges across most school district characteristics remained small (similar to the pattern for Concentration Grants) compared with the larger differences for Targeted Grants and Education Finance Incentive Grants (EFIG). For the formula-eligibility criteria for Targeted Grants and EFIG, the number weighting and percentage weighting provisions were retained, which contributed to larger differences for these grants. When only the formula-eligibility criteria were considered, the range in the Basic Grant allocations per formula-eligible child across states was narrower than the range for the final allocations. The hold harmless provision was not applied when only the formula-eligibility criteria were considered.

When only the formula-eligibility criteria were considered, the Basic Grant allocation per formula-eligible child was $550 for all states (table 4.A). Compared with the final allocations, when only the formula-eligibility criteria were considered, the largest decreases were in Vermont (-$571) and Wyoming (-$555); the largest increases were in Utah (+$88) and Florida (+$85), the two states with the lowest final allocations and also the two states with the largest increases resulting from removal of the SPPE provision. Overall, 27 states and the District of Columbia had decreases in their allocations compared with the final allocations, while 23 states and Puerto Rico had no changes or increases.

When only the formula-eligibility criteria were considered, the Basic Grant allocation per formula-eligible child was $550 for all locales (table 4.B; figure 4.1). Compared with the final allocations, when only the formula-eligibility criteria were considered, midsize cities had the largest increase (+$18), and remote rural areas had the largest decrease (-$34).

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Figure 4.1. Title I, Part A Basic Grant final allocation per formula-eligible child and allocation when only formula-eligibility criteria were considered, by school district characteristics: 2015

¹ To create the poverty quarters, all school districts are ranked, from the highest to the lowest, according to their percentage of formula-eligible 5- to 17-year-old children. Districts are divided into quarters based on the percentage of all 5- to 17-year-old children they serve, such that each quarter includes districts serving 25 percent of the 5- to 17-year-old children in the United States (including Puerto Rico).
² Basic Grants are provided to districts in which the number of formula-eligible children is at least 10 and at least 2 percent of the district’s 5- to 17-year-old population.
SOURCE: U.S. Department of Education, Office of Elementary and Secondary Education, Title I Allocation File, 2015; National Center for Education Statistics, Common Core of Data (CCD), “Local Education Agency Universe Survey,” 2013–14, Provisional Version 1a.

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When only the formula-eligibility criteria were considered, the Basic Grant allocation per formula-eligible child was $550 for districts of every population size in every poverty quarter. Compared with the final allocations, applying only the formula-eligibility criteria resulted in the largest increase (+$59) for the largest districts in the second-lowest poverty quarter and the largest decrease (-$112) for the smallest districts in the lowest poverty quarter.

When only the formula-eligibility criteria were considered, the Basic Grant allocation per formula-eligible child was $550 for districts with a 5- to 17-year-old population of all sizes. This range of less than $1 contrasts with the range of $139 among the districts of different population sizes for the final allocations. Compared with the final allocations, applying only the formula-eligibility criteria resulted in the largest decrease (-$123) for districts with a population of less than 300 (the smallest districts); other districts with populations under 10,000 had smaller decreases. In contrast, districts with a population of 10,000 to 24,999 had an increase of $8 in their Basic Grant allocation per formula-eligible child, and districts with a population of 25,000 or more (the largest districts) had an increase of $17.

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Removal of State per Pupil Expenditure (SPPE)

When the state per pupil expenditure (SPPE) provision was removed from the formula, the Basic Grant allocations per formula-eligible child increased in lower-spending states and decreased in higher-spending states. It is important to note that this analysis retained the hold harmless provision at the school district level, which limited the reduction of funding in a specific district to no more than 15 percent in a given year. The long-term impact of removing the SPPE provision was not fully reflected in this analysis. The hold harmless provision moderated the long-term impact of removing the SPPE provision by limiting the impact on a district to a maximum decline of 15 percent of its Title I funds from the preceding year. Additional declines of up to 15 percent per year could occur until the formula provisions were fully met for a district. Due to the zero-sum nature of Title I allocations, funds from each year’s decline were redistributed to other districts eligible for additional funds.

When the SPPE provision was removed from the formula, the Basic Grant allocations ranged from $512 in Tennessee and Utah to $1,105 in Wyoming and $1,121 in Vermont, a difference between the lowest and the highest of $609 or 119 percent (table 4.A). This difference was larger than the difference for the final allocations ($659 or 143 percent). Compared with the final allocations, when the SPPE provision was removed from the formula, the largest increases in the Basic Grant allocations per formula-eligible child were in Utah (+$50) and Florida (+$48), and the largest decreases were in Massachusetts (-$113) and New Jersey (-$97). Overall, 26 states had decreases in their allocations compared with the final allocations, while 24 states, the District of Columbia, and Puerto Rico had no changes or increases.

When the SPPE provision was removed from the formula, remote rural areas received a higher Basic Grant allocation per formula-eligible child ($584) than all other locales, which ranged from $537 for midsize cities to $570 for large cities (table 4.B; figure 4.2). The difference between the allocations for remote rural areas and midsize cities was $47 or 9 percent, which was slightly smaller than the difference for the final allocations ($52 or 10 percent). Compared with the final allocations, when the SPPE provision was removed, the Basic Grant allocation per formula-eligible child increased by $8 for large cities and by $6 for remote towns; the largest decreases were for small suburban areas (-$15) and fringe towns (-$11).

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Figure 4.2. Title I, Part A Basic Grant final allocation per formula-eligible child and allocation with state per pupil expenditure (SPPE) provision removed, by school district characteristics: 2015

¹ To create the poverty quarters, all school districts are ranked, from the highest to the lowest, according to their percentage of formula-eligible 5- to 17-year-old children. Districts are divided into quarters based on the percentage of all 5- to 17-year-old children they serve, such that each quarter includes districts serving 25 percent of the 5- to 17-year-old children in the United States (including Puerto Rico).
² A state’s adjusted SPPE cannot be less than 32 percent of the U.S. average SPPE or more than 48 percent of the U.S. average SPPE.
SOURCE: U.S. Department of Education, Office of Elementary and Secondary Education, Title I Allocation File, 2015; National Center for Education Statistics, Common Core of Data (CCD), “Local Education Agency Universe Survey,” 2013–14, Provisional Version 1a.

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When the SPPE provision was removed from the formula, the highest and lowest poverty quarters received the highest Basic Grant allocations per formula-eligible child (both $563). This pattern contrasted with the patterns for the final allocations and allocations with most other provisions removed, where the lowest poverty quarters had the highest allocations. The Basic Grant allocation per formula-eligible child was lowest for the second-highest poverty quarter ($531). When the SPPE provision was removed, the allocation for both the highest and lowest poverty quarters was $32 or 6 percent higher than the allocation for the second-highest poverty quarter, which was smaller than the difference between the poverty quarters with the highest and lowest allocations for the final allocations ($84 or 16 percent). Compared with the final allocations, when the SPPE provision was removed, there were decreases in the Basic Grant allocations per formula-eligible child for the lowest poverty quarter (-$42) and for the second-lowest poverty quarter (-$5); in contrast, there were increases for the second-highest poverty quarter (+$10) and for the highest poverty quarter (+$5).

Similar to the final allocations, when the SPPE provision was removed from the formula, there was no consistent pattern regarding Basic Grant allocations per formula-eligible child within the poverty quarters with respect to district population size. The largest districts in the highest poverty quarter had a higher allocation ($577) than districts of all other population sizes in that quarter, which ranged from $555 in the second-smallest districts to $561 in the second-largest districts. In contrast, in the second-lowest poverty quarter, the largest districts had a lower Basic Grant allocation per formula-eligible child ($518) than districts of all other population sizes in that quarter, which ranged from $530 in the second-largest districts to $576 in the smallest districts. In the lowest poverty quarter, the smallest districts had a higher allocation ($602) compared with districts in all other poverty quarters and of all other population sizes. Compared with the final allocations, removal of the SPPE provision resulted in the largest increase (+$32) for the largest districts in the second-highest poverty quarter and the largest decrease (-$64) for the second-smallest districts in the lowest poverty quarter.

Similar to the pattern for the final allocations, when the SPPE provision was removed from the formula, the Basic Grant allocation per formula-eligible child for districts with a 5- to 17-year-old population of less than 300 (the smallest districts) was higher than for districts of other population sizes. Similar to the final allocations, districts with populations under 5,000 had higher allocations than districts with populations of 5,000 or more. The highest Basic Grant allocation per formula-eligible child was for districts with a population of less than 300 ($664), and the second-highest allocation was for districts with a population of 300 to 599 ($597). The lowest allocation was for districts with a population of 10,000 to 24,999 ($542). Compared with the final allocations, removal of the SPPE provision resulted in lower allocations for districts with populations of under 10,000, with the largest decrease being for districts with a population of 1,000 to 2,499 (-$22). There was an increase of $13 for districts with populations of 25,000 or more (the largest districts). The difference in the Basic Grant allocations per formula-eligible child between the district population sizes with the highest and lowest allocations was $123 or 23 percent, which was smaller than the difference for the final allocations ($139 or 26 percent).

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Removal of State Minimum

The state minimum provision provides a minimum allocation threshold for each state. When the state minimum provision was removed from the formula, the Basic Grant allocations per formula-eligible child did not increase by more than $2 in any state but decreased substantially for the 6 states—and the District of Columbia—receiving state minimum allocations (figure I.4; table 4.A). It is important to note that this analysis retained the hold harmless provision at the school district level, which limited the reduction of funding in a specific district to no more than 15 percent in a given year. The long-term impact of removing the state minimum provision was not fully reflected in this analysis. The hold harmless provision moderated the long-term impact of removing the state minimum provision by limiting the impact on a district to a maximum decline of 15 percent of its Title I funds from the preceding year. Additional declines of up to 15 percent per year could occur until the formula provisions were fully met for a district. Due to the zero-sum nature of Title I allocations, funds from each year’s decline would be redistributed to other districts eligible for additional funds.

When the state minimum provision was removed from the formula, North Dakota’s Basic Grant allocation per formula-eligible child decreased by $151, Wyoming’s decreased by $127, Vermont’s decreased by $126, Alaska’s decreased by $97, South Dakota’s decreased by $71, New Hampshire’s decreased by $67, and the District of Columbia’s decreased by $39 (table 4.A). The allocations ranged from $463 in Utah and $466 in Florida to $978 in Wyoming and $995 in Vermont, a difference between the lowest and the highest of $532 or 115 percent, which was less than the difference for the final allocations ($659 or 143 percent).

Similar to the final allocations, when the state minimum provision was removed from the formula, remote rural areas received a higher Basic Grant allocation per formula-eligible child ($577) than all other locales, which ranged from $532 for midsize cities to $563 for small suburban areas (table 4.B; figure 4.3). The difference between the allocations for remote rural areas and midsize cities was $44 or 8 percent, which was smaller than the difference for the final allocations ($52 or 10 percent). Compared with the final allocations, when the state minimum provision was removed, remote rural areas (-$7) and remote towns (-$4) had the largest decreases in the Basic Grant allocations per formula-eligible child; the changes for all other locales were $1 or less.

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Figure 4.3. Title I, Part A Basic Grant final allocation per formula-eligible child and allocation with state minimum provision removed, by school district characteristics: 2015

¹ To create the poverty quarters, all school districts are ranked, from the highest to the lowest, according to their percentage of formula-eligible 5- to 17-year-old children. Districts are divided into quarters based on the percentage of all 5- to 17-year-old children they serve, such that each quarter includes districts serving 25 percent of the 5- to 17-year-old children in the United States (including Puerto Rico).
SOURCE: U.S. Department of Education, Office of Elementary and Secondary Education, Title I Allocation File, 2015; National Center for Education Statistics, Common Core of Data (CCD), “Local Education Agency Universe Survey,” 2013–14, Provisional Version 1a.

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When the state minimum provision was removed from the formula, the lowest poverty quarter received the highest Basic Grant allocation per formula-eligible child ($601). Districts with higher poverty rates had lower allocations. For example, the allocation was lowest for the second-highest poverty quarter ($521). Compared with the final allocations, when the state minimum provision was removed, there was a decrease of $3 in the Basic Grant allocation per formula-eligible child for the lowest poverty quarter, while the changes for all other poverty quarters were $1 or less. When the state minimum provision was removed, the difference between the allocations for the second-highest poverty quarter ($521) and lowest poverty quarter ($601) was $80 or 15 percent, which was slightly smaller than the difference for the final allocations ($84 or 16 percent).

Similar to the final allocations, when the state minimum provision was removed from the formula, there was no consistent pattern regarding Basic Grant allocations per formula-eligible child within the poverty quarters with respect to district population size. The largest districts in the highest poverty quarter had a higher Basic Grant allocation per formula-eligible child ($575) than districts of other population sizes in that quarter, which ranged from $551 for the smallest districts to $555 for the second-largest districts. In contrast, in the second-lowest poverty quarter, the largest districts had a lower allocation ($492) than districts of other population sizes in that quarter, which ranged from $519 for the second-largest districts to $609 for the smallest districts. Also, the largest districts in the second-highest poverty quarter and the lowest poverty quarter had lower allocations than districts of other population sizes within each quarter. Compared with the final allocations, when the state minimum provision was removed from the formula, there were differences of $1 or less in the Basic Grant allocations per formula-eligible child for every population size in both the highest and second-highest poverty quarters. Within the second-lowest quarter, the largest difference was a decrease of $3 for the smallest districts, and within the lowest poverty quarter, there were decreases ranging from $1 for the largest districts to $7 for the smallest districts. The range in the Basic Grant allocations per formula-eligible child ($24 or 4 percent) between the largest and smallest districts in the highest poverty quarter was nearly the same as the range for the final allocations ($23 or 4 percent).

Similar to the pattern for the final allocations, when the state minimum provision was removed from the formula, the highest Basic Grant allocation per formula-eligible child was for districts with a 5- to 17-year-old population of less than 300 (the smallest districts) ($661), and the second-highest allocation was for districts with a population of 300 to 599 ($604). Also similar to the pattern for the final allocations, districts of larger population sizes had progressively lower allocations; the lowest allocation was for districts with a population of 25,000 or more (the largest districts) ($534). After removal of the state minimum provision, the difference in the Basic Grant allocations per formula-eligible child between the district population sizes with the highest and lowest allocations was $128 or 24 percent, which was smaller than the difference for the final allocations ($139 or 26 percent). Compared with the final allocations, removal of the state minimum provision resulted in lower allocations for districts with populations under 5,000, ranging from a decrease of less than $1 for districts with a population of 2,500 to 4,999 to a decrease of $11 for districts with a population of less than 300. Increases for districts with populations of 5,000 or more were $1 or less.

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Removal of Hold Harmless

Removal of the hold harmless provision allows current formula provisions and current distributions of formula-eligible children to have a full impact on the allocations; with the hold harmless provision, the allocations are limited by the maximum yearly reductions. Removal of the hold harmless provision permits reductions of over 15 percent for school districts that may have decreases or smaller increases in the number of formula-eligible children compared with other districts.

After removal of the hold harmless provision from the formula, the Basic Grant allocations per formula-eligible child ranged from $472 in 12 states and Puerto Rico to $1,105 in Wyoming and $1,121 in Vermont, a difference of $649 or 137 percent (table 4.A). This difference was smaller than the difference for the final allocations ($659 or 143 percent) because the value for Utah and Florida at the bottom of the range increased. Compared with the final allocations, when the hold harmless provision was removed, the largest increases in the Basic Grant allocations per formula-eligible child were in Rhode Island (+$14) and New York (+$12), and the largest decreases were in Puerto Rico (-$64) and Michigan (-$31). Overall, 20 states and Puerto Rico had decreases in their allocations compared with the final allocations, while 30 states and the District of Columbia had no changes or increases.

When the hold harmless provision was removed from the formula, small suburban areas received a higher Basic Grant allocation per formula-eligible child ($568) than all other locales, which ranged from $535 for fringe rural areas and $538 for midsize cities to $562 for large cities and remote rural areas (table 4.B; figure 4.4). The difference between the allocations for small suburban areas and fringe rural areas was $33 or 6 percent, which was smaller than the difference for the final allocations ($52 or 10 percent). Compared with the final allocations, when the hold harmless provision was removed, midsize suburban areas had the largest increase in the Basic Grant allocation per formula-eligible child (+$7), and midsize cities had the second-largest increase (+$6); in contrast, remote rural areas had the largest decrease (-$21), and distant rural areas had the second-largest decrease (-$6).

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Figure 4.4. Title I, Part A Basic Grant final allocation per formula-eligible child and allocation with hold harmless provision removed, by school district characteristics: 2015

¹ To create the poverty quarters, all school districts are ranked, from the highest to the lowest, according to their percentage of formula-eligible 5- to 17-year-old children. Districts are divided into quarters based on the percentage of all 5- to 17-year-old children they serve, such that each quarter includes districts serving 25 percent of the 5- to 17-year-old children in the United States (including Puerto Rico).
SOURCE: U.S. Department of Education, Office of Elementary and Secondary Education, Title I Allocation File, 2015; National Center for Education Statistics, Common Core of Data (CCD), “Local Education Agency Universe Survey,” 2013–14, Provisional Version 1a.

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When the hold harmless provision was removed from the formula, the lowest poverty quarter received the highest Basic Grant allocation per formula-eligible child ($613). Districts with higher poverty rates had lower allocations. For example, the allocation was lowest for the second-highest poverty quarter ($528) and second lowest for the highest poverty quarter ($548). Compared with the final allocations, when the hold harmless provision was removed, there were increases in the Basic Grant allocations per formula-eligible child for the lowest poverty quarter (+$8), the second-lowest poverty quarter (+$6), and the second-highest poverty quarter (+$8). In contrast, there was a decrease for the highest poverty quarter (-$10). When the hold harmless provision was removed, the difference between the allocations for the second-highest poverty quarter ($528) and the lowest poverty quarter ($613) was $84 or 16 percent, which was the same as the difference for the final allocations.

Similar to the final allocations, when the hold harmless provision was removed from the formula, there was no consistent pattern regarding Basic Grant allocations per formula-eligible child within the poverty quarters with respect to district population size. The largest districts in the highest poverty quarter had a higher allocation ($565) than districts of other population sizes in that quarter, which ranged from $530 in the smallest districts to $551 in the second-largest districts. In contrast, in the second-lowest poverty quarter, the largest districts had a lower Basic Grant allocation per formula-eligible child ($500) than districts of other population sizes in that quarter, which ranged from $528 in the second-largest districts to $611 in the smallest districts. Also, the largest districts in the second-highest poverty quarter and the lowest poverty quarter had lower allocations than districts of other population sizes within each quarter.

Compared with the final allocations, when the hold harmless provision was removed from the formula, the largest decreases in the Basic Grant allocations per formula-eligible child were for the smallest districts (-$21) and largest districts (-$9) in the highest poverty quarter. The largest increases were for the largest districts and second-smallest districts in the lowest poverty quarter (both +$12). The range in Basic Grant allocations per formula-eligible child between the largest and smallest districts in the highest poverty quarter ($36 or 7 percent) was larger than the range for the final allocations ($23 or 4 percent).

Similar to the pattern for the final allocations, when the hold harmless provision was removed from the formula, the Basic Grant allocation per formula-eligible child for districts with a 5- to 17-year-old population of less than 300 (the smallest districts) was higher than for districts of other population sizes. Similar to the final allocations, districts of larger population sizes had progressively lower allocations. The highest Basic Grant allocation per formula-eligible child was for districts with a population of less than 300 ($599), and the second-highest allocation was for districts with a population of 300 to 599 ($585). The lowest allocation was for districts with a population of 25,000 or more (the largest districts) ($535). After removal of the hold harmless provision, the difference in the Basic Grant allocations per formula-eligible child between the district population sizes with the highest and lowest allocations was $64 or 12 percent, which was smaller than the difference for the final allocations ($139 or 26 percent). Compared with the final allocations, removal of the hold harmless provision resulted in lower allocations for districts with smaller population sizes. The largest decreases were for districts with a population of less than 300 (-$74) and districts with a population of 300 to 599 (-$24), and the largest increases were for districts with a population of 5,000 to 9,999 and districts with a population of 10,000 to 24,999 (both +$3).

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Removal of State per Pupil Expenditure (SPPE) and Hold Harmless

Removal of multiple provisions produces results that differ in pattern or magnitude from those for the final allocations or allocations with single provisions removed. Removal of the state per pupil expenditure (SPPE) provision increased the Basic Grant allocation per formula-eligible child in lower-spending states and decreased the allocation in higher-spending states. Removal of the hold harmless provision allowed the removal of the SPPE provision to have a full impact on the allocations and enabled the full impact of current provisions and recent changes in the number of formula-eligible children that had been limited by the hold harmless provision. Removal of the hold harmless provision permitted reductions of over 15 percent for school districts that may have had decreases or smaller increases in the number of formula-eligible children compared with other districts.

When removing the SPPE and hold harmless provisions from the formula in combination, the Basic Grant allocations ranged from $546 in 39 states and Puerto Rico to $1,105 in Wyoming and $1,121 in Vermont, a difference between the lowest and the highest of $575 or 105 percent (table 4.A). This difference was smaller than the difference for the final allocations ($659 or 143 percent) because of the increase for districts at the bottom of the range. Compared with the final allocations, when the SPPE and hold harmless provisions were removed, the largest increases in the Basic Grant allocations per formula-eligible child were in Utah (+$84) and Florida (+$81), and the largest decreases were in Pennsylvania (-$162) and Connecticut (-$161). Overall, 27 states had decreases in their allocations compared with the final allocations, while 23 states, the District of Columbia, and Puerto Rico had no changes or increases.

Similar to the final allocations, when the SPPE and the hold harmless provisions were removed from the formula in combination, remote rural areas received a higher Basic Grant allocation per formula-eligible child ($577) than all other locales, which ranged from $546 for large suburban areas to $562 for remote towns (table 4.B; figure 4.5). The difference between the allocations for remote rural areas and large suburban areas was $30 or 6 percent, which was smaller than the difference for the final allocations ($52 or 10 percent). Compared with the final allocations, when the SPPE and hold harmless provisions were removed, the largest increases in the Basic Grant allocations per formula-eligible child were for remote towns (+$21) and midsize cities (+$16), and the largest decreases were for large cities (-$13) and small suburban areas (-$10).

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Figure 4.5. Title I, Part A Basic Grant final allocation per formula-eligible child and allocation with state per pupil expenditure (SPPE) and hold harmless provisions removed, by school district characteristics: 2015

¹ To create the poverty quarters, all school districts are ranked, from the highest to the lowest, according to their percentage of formula-eligible 5- to 17-year-old children. Districts are divided into quarters based on the percentage of all 5- to 17-year-old children they serve, such that each quarter includes districts serving 25 percent of the 5- to 17-year-old children in the United States (including Puerto Rico).
SOURCE: U.S. Department of Education, Office of Elementary and Secondary Education, Title I Allocation File, 2015; National Center for Education Statistics, Common Core of Data (CCD), “Local Education Agency Universe Survey,” 2013–14, Provisional Version 1a.

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The Basic Grant allocations per formula-eligible child were analyzed by locale and state, after the SPPE and hold harmless provisions were removed from the formula in combination, leaving only the state minimum provision in the formula. Thus, every eligible district that was not in a state minimum state received a Basic Grant allocation per formula-eligible child of $546, regardless of locale (table 4.C; figure 4.6). States that were eligible for the state minimum allocation had higher Basic Grant allocations per formula-eligible child than states that were not eligible, but no differences by locale existed among states receiving the state minimum allocation. As a result, every locale within the same state had the same allocation. Basic Grant allocations per formula-eligible child ranged from $546 in the majority of states to $1,076 in North Dakota, $1,105 in Wyoming, and $1,121 in Vermont.

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Figure 4.6. Title I, Part A Basic Grant allocation per formula-eligible child and difference between school district locales with the highest and lowest allocations after removal of state per pupil expenditure (SPPE) and hold harmless provisions, by state or jurisdiction: 2015

¹ Data for North Dakota, Vermont, and Wyoming have been excluded from this figure because these states have outliers.
NOTE: The school district locales receiving the highest and lowest allocations vary by state or jurisdiction.
SOURCE: U.S. Department of Education, Office of Elementary and Secondary Education, Title I Allocation File, 2015; National Center for Education Statistics, Common Core of Data (CCD), “Local Education Agency Universe Survey,” 2013–14, Provisional Version 1a.

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When the SPPE and hold harmless provisions were removed from the formula in combination, the Basic Grant allocations per formula-eligible child were lowest for the second-highest poverty quarter ($547) and highest for the lowest poverty quarter ($562) (table 4.B; figure 4.5). Compared with the final allocations, when the SPPE and hold harmless provisions were removed, there were decreases in the allocations for the lowest poverty quarter (-$43) and the highest poverty quarter (-$10); in contrast, there were increases for the second-highest poverty quarter (+$27) and the second-lowest poverty quarter (+$6). After the removal of the SPPE and hold harmless provisions, the difference between the Basic Grant allocations per formula-eligible child for the poverty quarters with the highest and lowest allocations was $14 or 3 percent, which was smaller than the difference for the final allocations ($84 or 16 percent). This smaller difference was primarily due to the decrease in the allocation for the lowest poverty quarter compared with the final allocation (-$43) and the increase in the allocation for the second-highest poverty quarter compared with the final allocation (+$27).

When the SPPE and hold harmless provisions were removed from the formula in combination, there was a general pattern regarding Basic Grant allocations per formula-eligible child within the poverty quarters with respect to district population size. The smallest districts in each of the poverty quarters generally had a higher Basic Grant allocation per formula-eligible child than districts of other population sizes in each quarter. The only exception was in the highest poverty quarter, where the second-largest districts had a slightly higher allocation ($550) than the smallest districts ($549), and districts of other sizes in the poverty quarter had lower allocations. The smallest districts in the lowest poverty quarter had the highest allocation ($574) compared with districts of other sizes in that quarter or across any of the other poverty and population size quarters.

Compared with the final allocations, after removal of the SPPE and hold harmless provisions from the formula in combination, there were a variety of changes affecting the largest and smallest districts within the poverty quarters differently. Within the highest poverty quarter, there were decreases for districts of all population sizes, with the largest districts having the largest decrease (-$28); within the lowest poverty quarter, there were also decreases for districts of all population sizes, but the smallest districts had the largest decrease (-$87). Within the second-highest and second-lowest poverty quarters, there were increases for districts of some population sizes and decreases for others. Within the second-highest poverty quarter, the largest districts had the largest increase (+$52); within the second-lowest poverty quarter, the largest districts also had the largest increase (+$55). After removal of the SPPE and hold harmless provisions, the range in the Basic Grant allocations per formula-eligible child between the largest and smallest districts in the highest poverty quarter ($4 or 1 percent) was smaller than the range for the final allocations ($23 or 4 percent).

When the SPPE and hold harmless provisions were removed from the formula in combination, the Basic Grant allocation per formula-eligible child for districts with a 5- to 17-year-old population of less than 300 (the smallest districts) was higher than for districts of other population sizes. Similar to the final allocations, districts with populations of 2,500 or more had lower allocations than districts with populations under 2,500. The highest Basic Grant allocation per formula-eligible child was for districts with a population of less than 300 ($598), and the second-highest allocation was for districts with a population of 300 to 599 ($573). The lowest allocations were for districts with a population of 25,000 or more (the largest districts) ($547). Compared with the final allocations, removal of the SPPE and hold harmless provisions resulted in decreases for districts with populations under 10,000 and increases for districts with populations of 10,000 or more. The largest increase in the Basic Grant allocation per formula-eligible child was for districts with a population of 25,000 or more (+$14), and the largest decrease was for districts with a population of less than 300 (-$74). After removal of the SPPE and hold harmless provisions, the difference in the Basic Grant allocations per formula-eligible child between the district population sizes with the highest and lowest allocations was $50 or 9 percent, which was smaller than the difference for the final allocations ($139 or 26 percent).

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Removal of State Minimum and Hold Harmless

Removal of multiple provisions produces patterns that differ from those for the final allocations or allocations with single provisions removed. The state minimum provision provides a minimum allocation threshold for each state. When the state minimum provision was removed from the formula, the Basic Grant allocation per formula-eligible child did not increase by more than $1 in any state but decreased substantially for the 7 jurisdictions receiving state minimum allocations (table I.D; table 4.A). Removal of the hold harmless provision allowed removal of the state minimum provision to have a full impact on the allocations, and it enabled the full impact of current provisions and recent changes in the number of formula-eligible children that had been limited by the hold harmless provision. Removal of the hold harmless provision permitted reductions of over 15 percent for school districts that may have had decreases or smaller increases in the number of formula-eligible children compared with other districts.

When the state minimum and hold harmless provisions were removed from the formula in combination, North Dakota’s Basic Grant allocation per formula-eligible child decreased by $476, Vermont’s decreased by $409, Wyoming’s decreased by $393, South Dakota’s decreased by $206, Alaska’s decreased by $205, New Hampshire’s decreased by $141, the District of Columbia’s decreased by $63, and Puerto Rico’s decreased by $62. The allocations ranged from $474 in 14 states to $712 in 14 states and the District of Columbia (table 4.A). This range of $237 or 50 percent was smaller than the range for the final allocations ($659 or 143 percent). Overall, 17 states, the District of Columbia, and Puerto Rico had decreases in their allocations compared with the final allocations, while 33 states had no changes or increases.

When the state minimum and hold harmless provisions were removed from the formula in combination, small suburban areas received a higher Basic Grant allocation per formula-eligible child ($567) than all other locales, which ranged from $527 for remote towns to $564 for large cities (table 4.B; figure 4.7); this pattern contrasted with the pattern for the final allocations. The difference between the allocations for small suburban areas and remote towns was $40 or 8 percent, which was smaller than the difference for the final allocations ($52 or 10 percent). Compared with the final allocations, when the state minimum and hold harmless provisions were removed, the largest increases in the Basic Grant allocations per formula-eligible child were for midsize cities and midsize suburban areas (both +$7), and the largest decreases were for remote rural areas (-$45) and remote towns (-$14).

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Figure 4.7. Title I, Part A Basic Grant final allocation per formula-eligible child and allocation with state minimum and hold harmless provisions removed, by school district characteristics: 2015

¹ To create the poverty quarters, all school districts are ranked, from the highest to the lowest, according to their percentage of formula-eligible 5- to 17-year-old children. Districts are divided into quarters based on the percentage of all 5- to 17-year-old children they serve, such that each quarter includes districts serving 25 percent of the 5- to 17-year-old children in the United States (including Puerto Rico).
SOURCE: U.S. Department of Education, Office of Elementary and Secondary Education, Title I Allocation File, 2015; National Center for Education Statistics, Common Core of Data (CCD), “Local Education Agency Universe Survey,” 2013–14, Provisional Version 1a.

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When the state minimum and hold harmless provisions were removed from the formula in combination, the Basic Grant allocation per formula-eligible child was lowest for the second-highest poverty quarter ($530) and highest for the lowest poverty quarter ($605). Compared with the final allocations, when the state minimum and hold harmless provisions were removed, there was a decrease in the allocation for the highest poverty quarter (-$8); in contrast, there were increases for the second-highest poverty quarter (+$9), the second-lowest poverty quarter (+$4), and lowest poverty quarter (less than +$1). After the removal of the state minimum and hold harmless provisions, the difference between the Basic Grant allocations per formula-eligible child for the poverty quarters with the highest and lowest allocations was $75 or 14 percent, which was smaller than the difference for the final allocations ($84 or 16 percent). This smaller difference was primarily due to the increase in the allocation for the second-highest poverty quarter (+$9).

Similar to the final allocations and most other allocations with provisions removed, when the state minimum and hold harmless provisions were removed from the formula in combination, there was a general pattern regarding Basic Grant allocations per formula-eligible child within the second-highest, second-lowest, and lowest poverty quarters with respect to district population size. In the highest poverty quarter, the largest districts had a higher allocation ($568) than districts of other population sizes within that quarter, which ranged from $529 for the smallest districts to $553 for the second-largest districts. In the second-highest, second-lowest, and lowest poverty quarters, the smallest districts had the highest allocations. For example, in the second-lowest poverty quarter, the smallest districts had a higher allocation ($603) than districts of other population sizes in that quarter, which ranged from $503 for the largest districts to $572 for the second-largest districts. The smallest districts in the lowest poverty quarter had the highest allocation ($641) compared with districts of other sizes in that quarter or across any of the other poverty and population size quarters.

Compared with the final allocations, after removal of the state minimum and hold harmless provisions from the formula in combination, there were a variety of changes affecting large and small districts within the poverty quarters differently. Within the highest poverty quarter, there were decreases for districts of all sizes, with the smallest districts having the largest decrease (-$22); within the lowest poverty quarter, the smallest districts also had the largest decrease (-$21), but districts of other population sizes had increases. Within the second-highest and second-lowest poverty quarters, there were increases for districts of some population sizes and decreases for others. Within the second-highest poverty quarter, the second-largest districts had the largest increase (+$13); within the second-lowest poverty quarter, the largest districts had the largest increase (+$12). After removal of the state minimum and hold harmless provisions, the range in the Basic Grant allocations per formula-eligible child between the largest and smallest districts in the highest poverty quarter ($39 or 7 percent) was larger than the range for the final allocations ($23 or 4 percent).

When the state minimum and hold harmless provisions were removed from the formula in combination, the Basic Grant allocation per formula-eligible child was highest for districts with a 5- to 17-year-old population of 1,000 to 2,499 ($576), in contrast to the pattern of the smallest districts receiving the highest allocation in the final allocation and allocations with other provisions removed. The second-highest allocation was for districts with a population of 600 to 999 ($571). The lowest allocation was for districts with a population of 25,000 or more (the largest districts) ($537). Compared with the final allocations, removal of the state minimum and hold harmless provisions resulted in decreases for districts with populations under 5,000 and increases for districts with populations of 5,000 or more. The largest increases in the Basic Grant allocations per formula-eligible child were for districts with a population of 5,000 to 9,999 and districts with a population of 25,000 or more (both +$4), and the largest decrease was for districts with a population of less than 300 (the smallest districts) (-$112). After removal of the state minimum and hold harmless provisions, the difference in the Basic Grant allocations per formula-eligible child between the district population sizes with the highest and lowest allocations was $39 or 7 percent, which was smaller than the difference for the final allocations ($139 or 26 percent).

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Cost Adjustment Using the American Community Survey-Comparable Wage Index (ACS-CWI)

Adjusting the Basic Grant allocations per formula-eligible child using the American Community Survey-Comparable Wage Index (ACS-CWI) increased the relative value of allocations in low-cost areas and decreased the relative value of allocations in high-cost areas. Vermont continued to receive the highest Basic Grant final allocation per formula-eligible child ($1,302) after the cost adjustment, but the state with the lowest cost-adjusted final allocation was California ($461), a difference of $841 (the difference between the highest and lowest allocations before the cost adjustment was $659, with Utah receiving the lowest allocation ($462) (table 4.AA). Removing the state minimum and hold harmless provisions from the formula in combination resulted in a difference of $380 between the states with the highest and lowest cost-adjusted Basic Grant allocations per formula-eligible child (from $468 in California to $848 in Maine), the smallest difference of any of the formula analyses (except when only the formula-eligibility criteria were considered) after the cost adjustment.

When the allocations were cost adjusted and the state minimum and hold harmless provisions were removed from the formula, the lowest poverty quarter had the highest Basic Grant allocation per formula-eligible child ($616), and the highest poverty quarter had the lowest allocation ($576) (table 4.BB). However, when these provisions were removed, the $41 difference between the cost-adjusted allocations was smaller than the difference for the unadjusted allocations ($55).

Applying the ACS-CWI increased the differences in the Basic Grant allocations per formula-eligible child between the locales with the highest and lowest allocations. For example, the cost-adjusted Basic Grant final allocation per formula-eligible child ranged from $719 for remote rural areas to $545 for large cities, a difference of $174 (compared with a difference of $52 for the unadjusted final allocations, with midsize cities receiving the lowest allocation). When the hold harmless provision was removed from the formula, the difference was $148 (compared with a difference of $33 for the unadjusted allocations).

The difference in the Basic Grant final allocations per formula-eligible child between the smallest and largest districts ($268) increased after the ACS-CWI was applied (the difference between the unadjusted allocations was $139). This increase was primarily because of the relative increase in the cost-adjusted final allocation for districts with a 5- to 17-year-old population of less than 300 (the smallest districts), due to their relatively lower cost of living. After removing the the state per pupil expenditure (SPPE) and hold harmless provisions, the difference was $167 (districts with a population of less than 300 had an allocation of $721 and districts with a population of 25,000 or more [the largest districts] had an allocation of $554).

When the allocations were cost adjusted, the smallest districts in each of the poverty quarters had the highest Basic Grant allocations per formula-eligible child in all of the formula analyses. For example, when the SPPE provision was removed from the formula, the smallest districts in the second-lowest poverty quarter had the highest Basic Grant allocation per formula-eligible child ($666), compared with the lowest allocation of $527 for the largest districts in that quarter.

When analyzed by locale and state, the majority of states had an unadjusted Basic Grant allocation per formula-eligible child of $546 when the SPPE and hold harmless provisions were removed from the formula in combination (table 4.C). However, after applying the ACS-CWI, there was substantial variation in the allocations. The cost-adjusted Basic Grant allocations per formula-eligible child ranged from $506 in California, $510 in New Jersey, and $511 in Connecticut to $1,231 in North Dakota, $1,260 in Wyoming, and $1,302 in Vermont (table 4.CC). In 22 states, the highest cost-adjusted Basic Grant allocation per formula-eligible child was for remote rural areas; large or midsize cities did not receive the highest allocations in any states.

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