University of Arkansas Office for Education Policy

SB 811 – Modifying the Allocation of Poverty Funding in AR Schools

In The View from the OEP on April 9, 2013 at 3:18 pm

NOTESB811 may be discussed in Senate Education Committee on Wednesday April 10

Over the past several weeks, one of the many challenging financial issues tackled by the legislature involves the pot of school funding often referred to as NSLA (National School Lunch Act) funding.  Interestingly, this funding category has nothing to do with lunches or nutrition; rather, the NSLA funds refer to the compensatory funds that are allocated to districts based on the level of economic disadvantage facing the student body.  The general idea is that these “poverty funds” are intended to allow the schools to develop programs to “compensate” for the additional educational challenges faced by economically disadvantaged students.   (To learn more on this, check out our brand new OEP policy brief, Categorical Poverty Funding in Arkansas)

Poverty funds have been allocated to districts since the 2003-04 special legislative session (responding to the Arkansas Supreme Court ruling in the Lakeview case), in which the state’s lawmakers substantially revamped the state school funding system.  The new funding system incorporated (wisely, in our view) a category for additional funding for  districts based on the numbers of disadvantaged students served.  The categorical funds for poverty students, first allocated  in 2004-05, is tiered so that districts with higher concentrations of poverty receive more funding to equitably educate students. In 2012-13, ALL districts receive at least $517 per poverty student (as measured by a qualification for federally-subsidized free or reduced-price lunches).  Districts receive twice as much as that ($1033) per poverty student when 70% or more of the district’s students qualify for FRL (free or reduced lunch) and three times as much ($1,549)  when 90% or more students receive FRL.

It is easy to see that a district serving 70% FRL students would receive twice as many dollars in poverty funding than would a district serving 69% FRL students.  Similarly, there are large differences in funding between districts serving 89% FRL and those serving 90% FRL.  These “cliffs” are arbitrary and result in districts with VERY SIMILAR student bodies being treated VERY DIFFERENTLY in the poverty funding formula.


Senator Johnny Key (R-Mountain Home)

All of these issues are explained in great detail in a brand new OEP Policy Brief under the informative but not very exciting title of “Categorical Poverty Funding in Arkansas“.   Please check out this policy brief (and our new and improved web site!) to learn a bit more about this issue.  In particular, we highlight some of the recent legislative activity related to this issue: SB811 sponsored by Johnny Key (R-Mountain Home) and James McLean (D-Batesville) and SB508 sponsored by Joyce Elliott (D-Little Rock).

In the policy brief, we discuss in detail Senate Bill 508, which aims to restrict the use of these categorical funds.  We also discuss SB811, which is consistent with the recommendation of the OEP that the state adopt a “smoother” funding model without the arbitrary and tough to justify “cliffs” at 70% and 90% FRL.

In particular, the biggest changes incorporated in the SB 811 model include:

  1. Higher levels of poverty funds for the state’s poorest districts,
  2. Lesser funding for the districts without great concentrations of poverty,
  3. A smoothing of the spending curve such that similar districts are treated similarly, and
  4. A mechanism which gives greater weight to free-lunch students than to reduced lunch students (since students eligible for free-lunch face more dire poverty) .

The graph below highlights the differences between the proposed smooth model (in black) from SB 811 and the current tiered funding model (in green).

Pov. Funds Smooth Picture Graph


To read more about the proposed changes to this funding, check out the OEP Policy Brief  “Categorical Poverty Funding in Arkansas

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