University of Arkansas Office for Education Policy

#7 Changes Proposed to Poverty Funding

In The View from the OEP on December 16, 2013 at 12:05 pm

Since the Arkansas General Assembly meets every other year for legislative sessions, it is no surprise that many of the hundreds of proposed legislative matters never get any press attention at all.

So, when the headlines are filled with party infighting and rancor over education legislation, you can guess the reason fairly easily: education finance.  Money talks – and representatives spoke up for their school districts.

This specific piece of legislation was to amend the National School Lunch Act (NSLA) funding mechanism, which is the formula that determines the amount of extra funding that will go to school districts with concentrations of students who receive a free or reduced price lunch at school.

For our most detailed analysis of this issue, see our policy brief here.

The bill, Senate Bill 811 proposed by State Senator Johnny Key, sought to change the current formula, which gives a step-increase when 70% and 90% of students in a district are eligible for the program.  Instead, the new formula would operate as a smooth increase.

Proposed Model for NSLA Funding

Figure 2: Proposed Model for NSLA Funding figure

SB 811 did not pass, but here is what it would have done: 1) save the state money or allow the state to reallocate the savings towards specific education programs; 2) allocate more funding to districts with higher concentrations of poverty, which many believe was the original intention of the bill; 3) hold districts accountable for ensuring that “poverty funding” is used for economically disadvantaged children; and 4) treat districts that are separated by one percentage point similarly, instead of having arbitrary step increases that result in similarly situated districts receiving VERY different levels of per-pupil poverty funding.

Of course, the reason this proposal was hotly-debated and then eventually discarded was that many districts (mostly those with relatively low levels of students eligible for free/reduced price lunches) would receive fewer resources in future years; when resources are re-allocated, there are generally going to be some winners and some losers.  Not surprisingly, this often leads to dissent, and it did so in this case.

It will be interesting to see if this legislation is introduced again. Other states have made the move to a type of smoothing formula, so there are examples to consider and learn from.  Here at the OEP, we will keep you updated on any legislative changes that are proposed – and we will do our best to keep you up-to-date on education issues from around the state.

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