Why Title I funds were cut for Indiana charter schools

Indiana charter school operators were alarmed to learn that many of the schools were slated for unexpected cuts in their 2015-16 allocations under the federal Title I program. What happened?

Michelle McKeown of the Indiana Charter School Board says the glitch appears to result from the way the Indiana Department of Education determined school free and reduced-price lunch counts for purposes of allocating the funds. And it is tied to the participation by some high-poverty school districts in the new Community Eligibility program, in which all students get free school lunches.

McKeown makes a persuasive case that the education department calculated Title I funding using Community Eligibility data for school districts but used different data for charter schools.

“This is the only explanation that makes sense to me,” McKeown, the interim executive director of the charter school board, told me. “I think it’s very clear they used different sets of data.”

It’s worth noting that, even with the cuts, some charter schools still get more Title I money per student than the local districts. And some charter schools got increases. But the situation has political resonance because Superintendent of Public Instruction Glenda Ritz, who heads the state education department, is lukewarm on charter schools. Some of her critics seemed to suspect treachery.

Daniel Altman, spokesman for the Indiana Department of Education, declined to comment on McKeown’s conclusions but said the department used the same formula to allocate Title I funding that has been used for over a decade. He said some schools had errors in data they submitted, which can have an effect on the allocations.

Title I of the Elementary and Secondary Education Act targets funding to schools serving disadvantaged students. The aid is intended to supplement state and local sources. For example, it can pay for staff to provide literacy and skills instruction to students who need help.

The funding is based on formulas that give more money to needier schools, with the base allocations determined by census data on the number of school-age children who live below the federal poverty level. Charter schools get a share of the money allocated for the districts where their students live. The split is determined by how many students are eligible for free or reduced-price lunches in the charter schools and the district schools.

McKeown said it appears the Department of Education calculated charter school funding using data that schools report on how many students qualify by family income for free and reduced-price lunch. But for non-charter school districts, it drew numbers from the state school nutrition office, which show how many students eat for free – 100 percent in Community Eligibility school districts.

She doesn’t allege the education department tilted the funding to hurt charter schools. In fact, maybe it has always done it this way. The data sets would have been identical until Community Eligibility began.

And the change would only now appear because districts that adopted Community Eligibility last year – including Indianapolis Public Schools, Gary Community Schools and Fort Wayne Community Schools – would be counted in the formula as having all their students qualify for free lunch. That would shift Title I funding to the districts, especially a district like IPS where there are lots of charter schools.

McKeown’s argument makes sense. I ran calculations for several Indianapolis charter schools using the recommended formula (Example 3 at the bottom of this long document) and the results matched.

But the cuts to charter schools are a problem because Title I includes a “hold harmless” provision that says no district or charter school is supposed to have its funding reduced by more than 15 percent from one year to the next. Under Indiana’s 2015-16 allocations, nearly half of charter schools would see over-sized cuts compared to 1 percent of school districts.

Needless to say, charter schools complained. The U.S. Department of Education sent a letter to the state warning that it had erred. And the state department said last week it’s cooperating with the feds and is providing records going back to 2010 to determine if some schools were over-funded in the past.

 

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