UPDATED

After months of criticism from Republican lawmakers, state chiefs, and teachers’ unions on its approach to spending rules for the Every Student Succeeds Act, the U.S. Department of Education Wednesday released a new proposal that appears to give districts and states some additional flexibility when it comes to ensuring federal funds for low-income students don’t replace state and local dollars.

But, judging from early reaction, it seems that the changes to proposed rules for the part of the law known as “supplement-not-supplant” are not enough to placate the sharpest critics of the department’s original approach, crafted as part of a “negotiated rulemaking” process this spring. Those critics include Sen. Lamar Alexander, R-Tenn., an ESSA architect.

The department’s original proposal would have required districts to demonstrate that state and local per-pupil spending in Title I schools, which have large shares of students from low-income backgrounds, be at least equal to the average of that spending in non-Title I schools. The new approach would provide some additional options to meet similar goals. More on that below.

Civil rights advocates have said both the initial proposal and the revamped version represent a long-overdue fix to a loophole in Title I rules when it comes to teachers’ salaries, one of the biggest expenses on districts’ plates.

But Alexander, the chairman of the Senate education committee, said the department had overstepped its authority. He renewed a pledge, made earlier this spring, to block the rule from going into effect if it becomes final.

Alexander said in a statement that U.S. Secretary of Education John B. King, Jr. apparently thinks he’s a member of Congress and chairman of a “national school board” in addition to being education secretary.

“His proposed regulation would give Washington, D.C., control over state and local education dollars that it has never had before,” Alexander said. “Federal law gives him zero authority to do this. In fact, our new law specifically prohibits his doing this.”

But King said that intradistrict state and local funding gaps are inconsistent with the “civil rights history” that’s the source of the supplemental-money requirement.

“No single measure will erase generations of resource inequities, and there is much more work to do across states and districts to address additional resource inequities, but this is a concrete step forward to help level the playing field and ensure compliance with the law,” King said in a statement.

Overall, the proposal, which has been highly anticipated for months, doesn’t seem to have shifted the political landscape on the debate over supplement-not-supplant. Superintendents, state chiefs, and others still say the department has put forth something unworkable.

And civil rights groups and ESSA’s Democratic sponsors—Sen. Patty Murray of Washington and Rep. Bobby Scott of Virginia—argue the new rule strikes the right balance in ensuring the poorest students get access to their fair share of resources, while giving local leaders the flexibility they need. More reaction below.

But first, what exactly has the department changed?

The proposed rule, which we previewed for you exclusively earlier Wednesday, still needs to go through a 60-day comment period before it can be finalized. It would give districts the following options to show compliance with the supplemental-money rule:

1. They could use a weighted student-funding formula. A formula in compliance with the proposal would put a priority on certain demographics associated with educational disadvantage, such as students from low-income backgrounds, English-language learners, and students with disabilities. It would also have to ensure that Title I schools receive all the actual funds they’re entitled to under the formula.
   
2. Districts could choose to distribute money using a formula based on a districtwide average of personnel and non-personnel expenditures. For personnel expenditures, districts would calculate the number of personnel at a school and multiply that figure by the district’s average salary for each respective staff category. For non-personnel expenditures, the district would multiply the number of students in a school by the district’s average per-pupil expenditures for nonpersonnel resources. Then those personnel and nonpersonnel figures would be added together to determine the distribution of state and local money to schools. (Again, districts would have to ensure that Title I schools get all the funding they’re entitled to under such a formula.)
   
3. There’s an option for a state-developed compliance test. These tests would have to lead to a distribution state and local aid to schools that would be as rigorous as the first two options listed above. Such state compliance tests would be peer-reviewed at the federal level.
   
4. Finally, as a safe harbor, districts could choose a methodology that results in their state and local per-pupil spending in Title I schools being at least equal to the average of such spending in non-Title I schools. There’s a little flexibility built in here, because districts would still be considered in compliance if per-pupil spending for each Title I school were up to 5 percent less than the average spending figure in non-Title I schools.

The key takeaway: The department apparently is no longer going to explicitly require that, no matter what compliance approach they use, districts’ per-pupil spending of state and local money in Title I schools is at least equal to the average of that in non-Title I schools, in order to comply with the supplemental-money rule. It’s now an option for districts, albeit one that the department would obviously look favorably on.

This multiple-option approach might be considered similar to how the department approached the politically thorny issue of test-participation in ESSA accountability. In that case, the department laid out several consequences states could impose on schools with high opt-out rates, or the state could develop some plan of its own for the department to review.

The department also says the proposed regulations would mean up to $2 billion in additional state and local funding for high-poverty schools.

More Details

During negotiations about this ESSA spending rule in the spring, state and district representatives argued that the department did not have the power to require that sort of increased per-pupil spending equalization between schools.

They also argued it would seriously disrupt school operations and potentially undermine collectively bargained employee rights. Supporters of that plan, however, said it would truly ensure that the supplemental-money rule was being followed, and that schools with many poor students weren’t being shortchanged of their rightful state and local aid.

The proposed rule seeks to address some of these criticisms, by doing the following:

• Give districts additional time to meet the requirement. ESSA calls for districts to demonstrate how they’ll comply with the spending rule by December 2017. (The compliance test would then impact spending in the 2018-19 school year). However, the department would allow districts to submit a plan to their states, by December 2017, showing how they would demonstrate compliance with the supplemental-money rule beginning in the 2019-2020 school year instead.
  
• The rule states that nothing in it shall be construed to require forced teacher transfers.
  
• An exception would be made for intradistrict spending disparities due to spending on students like English-language learners and those with disabilities, as well as on special schools.
  
• There would be some flexibility for small fluctuations from year to year in a district’s budget.
  
• Small schools with enrollments of 100 or fewer would have at least some degree of flexibility from the draft rule.
  
• Districts would have the opportunity to comply on either a districtwide or grade-span basis.
  
• Districts could exclude from their compliance test state and local money spent on districtwide activities, like districtwide summer school. However, Title I and non-Title I schools would have to be at least equal beneficiaries of such activities—Title I schools could also receive a larger share of those benefits.
  
• Districts could also exclude state and local money for program activities that meet the intent of Title I, such as a preschool program that provides additional services for at-risk students.
  
• A district without any Title I schools would be exempt from the requirement.
  

More Reaction

Republican lawmakers and advocates for state chiefs, superintendents, and school board members are unhappy with the proposal.

Rep. John Kline, R-Minn., called the proposal “unprecedented and unlawful.” He said, “The Department of Education is threatening to unilaterally impose a multibillion-dollar regulatory tax on our nation’s schools. This punitive policy will unleash havoc on schools and their students at a time when education leaders should be focused on helping children succeed in the classroom.”

The Council of Chief State School Officers’ Executive Director Chris Minnich, said that while the Education Department clearly responded to feedback from the education field in its proposal, the draft rule is still not consistent with ESSA.

He added, “Unfortunately, in the department’s effort to ensure resources go to the students who need it the most, they have created a situation where the reverse is likely to occur in many places. We look forward to helping get this right before the rule becomes final.”

Randi Weingarten: The American Federation of Teachers president said the draft rules represent an “unfunded mandate from Washington” that pushes districts to increase spending without showing them how to do so, or compelling any additional resources to help districts. And in her view, the draft rules specifically prohibit forced teacher transfers.

While she supports the intent of the regulations, Weingarten said in a statement, she added, “To be clear, the AFT will fight to ensure that these proposed regulations are used for their intended purpose--equity--and not as a means for states and districts to make budget cuts or staffing decisions that are not in the best interest of our most vulnerable students.”

Lily Eskelsen García: The president of the National Education Association said the proposal has rightly moved away the previous idea to needlessly track every dollar spent in schools. That would actually result in misguided layoffs that would hurt students, in her view.

But she said she wants the final rules make sure in some way to “include empowered voices of the practitioners that will implement this. .. I believe we have taken a significant step down a better road,” she said in an interview. “But we’re not there yet.”

García said she also thinks the regulations have significantly lessened the chance of forced teacher transfers, but that more protections against the “shell games” of moving employees around to come into compliance should be added.

Daniel Domenech, the executive director of AASA, The School Superintendents Association: “We are deeply disappointed in today’s proposed regulation as it relates to the ‘Supplement Not Supplant (SNS)’ provisions in ESSA, given its federal overreach and extensive prescription. While we can agree with USED on its focus on ensuring students have the resources they need, this proposal--as drafted--glosses over the realities of school finance, the reality of how and when funds are allocated, the extent to which districts do or do not have complete flexibility, the patterns of teacher sorting and hiring, and the likelihood that many students would experience the rule, as drafted, in a way that undermines true efforts aimed at increasing education equity,” he said in a statement.

But civil rights groups and Democrats who supported the original proposal complimented the department on the changes.

Wade Henderson, the president and CEO of the Leadership Conference on Civil and Human Rights: “Our states and districts routinely spend less money to educate children facing greater challenges. This rule doesn’t solve this massive problem—no single rule could—but it’s a step in the right direction and brings us closer to a more just education system.”

Rep. Bobby Scott, D-Va., and Sen. Patty Murray, D-Wash.: “Achieving true equity in education is not easy, but it is incumbent on all of us, at all levels of government, to work collectively to ensure that all schools in every community are equipped with the public resources necessary to graduate all students ready for college and career.”

Further Questions

Here are some other lingering questions or potential issues, based on what we’ve learned:

• As with concerns expressed about the department’s proposal for handling high opt-out rates on tests, critics might contend that the department is being overly prescriptive by laying out the options that would show compliance, and not allowing for greater flexibility. And implementing the specified options, however many there are, may be far from an easy task for many districts. (ESSA says the department can’t mandate any methodology for showing compliance with the supplemental-money rule.) The department’s defenders would likely counter that, by extending options to districts, federal officials are by definition not prescribing any specific methodology.
  
• It’s not clear exactly how narrow weighted student-funding formulas would have to be in order to comply with the supplemental-money rule. What if a district wanted to include additional funding weights for other demographics, or for certain academic subjects, or for prekindergarten, that aren’t necessarily associated with educational disadvantage?
  
• How much would state-developed compliance tests vary across state lines?
  
• Although forced teacher transfers would not be legally required through the proposal, that doesn’t mean they’d be prohibited. Teachers’ unions in particular are concerned about the possibility of forced transfers.

Click here to read the full draft rule.