For many years, the Chicago Board of Education has concentrated federal Title I money in schools that rated highest on a special poverty index.

A steep sliding scale—ranging this year from $200 to $980 per low-income student—provided schools with the highest poverty rates proportionately more of this federal discretionary money and won praise from researchers studying urban district funding strategies.

However, the School Board recently began tilting the scales in the other direction and may soon change how poverty is defined in the underlying distribution formula, which has been in place for at least a decade. Already this year, 50 schools were added to the Title I eligibility rolls when the board lowered the minimum poverty level to 40 percent. Previously, the lower limit was 50 percent.

Next year, many of these newly eligible schools will get more than double the per pupil amount that schools at the low end of the poverty spectrum received this year. At the same time, funding rates for those at the highest poverty levels will be slashed by 18 percent.

“It was too wide a band for us,” says CPS Budget Director Pedro Martinez. “We didn’t feel like it was equitable.”

The new scale will shift hundreds of thousands of discretionary dollars to relatively better off schools and will force those that are worse off to make even larger cuts than may already be required by the system’s projected $175 million budget shortfall.

Next year, Title I-eligible schools at the bottom of the poverty index will get $430 per poor student, up from $200 per child. By contrast, schools at the top of the scale will see their allocations reduced from $980 to no more than $800 per poor child.

‘I had to fire myself’

With a Title I poverty level of 79 percent, Lathrop Elementary in Lawndale has the highest federal poverty index in the district this year. (The index is determined by a weighted average of welfare and free and reduced-price lunch participation rates.)

However, the school will see its Title I funding drop to $169,000 next year, down from $291,000 this year. (Besides the sliding scale changes, Lathrop was hit by the district’s decision to eliminate preschool students when it tallied Title I allocations.)

Lathrop Business Manager Shonta Arrington says she had little choice but to cut everything that she could, including the school librarian, instructional supplies—and her own position. “I had to fire myself,” she says.

A 14-year veteran, Arrington says she’s “never seen it this bad” and notes that the school does not expect to get financial relief from central office.

The situation is worse at schools that serve a lot of preschoolers, who had previously been included in federal poverty counts. North Lawndale’s Herzl Elementary, which serves 120 preschool students and this year rated among the poorest on Title I poverty scale, is facing a $280,440 cut in federal poverty funds.

Losing close to $200 per pupil, Herzl Principal Betty Green is weighing the prospect of dropping three full-day kindergartens, eight teachers hired to reduce class size, and six classroom aides. “I have to cut vital programs that are critical to the kids,” she says. Herzl is on probation and thus required to spend discretionary dollars on the district’s prescribed reading and math programs.

But Green is appealing the cuts. She and principals facing similar cuts at Penn and Mason elementary schools met with district budget director Martinez to ask for relief.

Martinez says only a few schools will see declines in Title I funding, and argues those decreases will be mostly due to other factors, such as declining enrollment or fewer students qualifying for welfare or the free and reduced-price lunch program.

These schools are receiving a “double whammy” of reduced poverty and enrollment rates, says Martinez. “The formula factors are all connected,” he says. “It’s usually not just one thing.”

Yet some schools are clear winners solely because of the funding boost at the bottom of the Title I funding scale. Portage Park Elementary, with a 44 percent federal poverty rating this year, will receive a “sizeable increase,” but not double this year’s $114,000 in Title I, says Principal Mark Berman, who plans to hire another teacher with the extra money.

Next year, Martinez says six schools—Jones College Prep, Kenwood Academy, South Loop, Chicago International-Bucktown, Nettelhorst, and Ashburn—will no longer be eligible to receive Title I, and 14 others will become newly eligible.

Funding up, district ‘set-aside’ grows

Carolyn Brown, a California State University-Dominguez Hills researcher who studies public school funding, says the Title I distribution scale in Chicago is still steeper than it is in New York and Los Angeles. She speculates that Chicago’s redistribution of federal poverty funds is a response to pressure from principals at low-poverty schools that don’t get much—or any—discretionary money. (See related story)

While some schools are getting less Title I money, the total amount coming into the district is on the rise.

After decades of spreading Title I money evenly across states and districts, Congress created in the No Child Left Behind a more targeted distribution formula law that sent a bigger share of federal dollars to the nation’s top dozen big-city school districts.

In Chicago, the change has amounted to a whopping 75 percent jump—from $166 million in 2001-2002 to $290 million this school year—netting the city over half of the Title I funds allocated to the state, according to the U.S. Department of Education.

But the share going out to Title I schools has gotten smaller. Three years ago, 78 percent of the district’s Title I money was distributed to schools; this year, schools got just 55 percent.

That’s because the district is setting aside more Title I money for citywide programs, some of them required by No Child Left Behind. This year, central office kept $131 million in Title I, up from $36 million in 2002. Before the federal law was enacted, the district was passing through an increasingly larger share of Title I to schools, growing from 70 percent in 1998 to a peak of 78 percent in 2001, according to a Catalyst Chicago analysis of budget data.

Martinez says that the percentage going to schools next year will stay at about 55 percent.

Chicago distributes relatively less to schools than do other large districts. In 2003-2004, New York and Los Angeles both budgeted more than 70 percent of their Title I funds to schools; Chicago budgeted 60 percent, according to Brown, who studied all three districts.

Still, there is no legal limit on how much money the district can retain for districtwide programs, says Wayne Riddle, a budget expert with the Congressional Research Service. “That’s always been a somewhat loose area of Title I,” he notes.

Dwindling welfare rolls lower funding

Under federal law, districts can choose among a variety of methods to rate school poverty levels. Few are still using the combination of weighted welfare and lunch program participation rates that Chicago uses, according to the U.S. Department of Education.

Generally, participation in the free and reduced-price lunch program is much higher (85 percent) than participation in welfare, which has been declining since welfare reform laws were passed in 1996. (Welfare participation is used as a proxy for extreme family poverty.)

The number of CPS students whose families are on welfare declined last year by 46 percent—from 41,000 to 22,000 children, says budget director Martinez.

In her 2003-2004 study, Brown found that only 18 CPS schools hit 75 percent—then the high point—on the district’s federal poverty index. At the same time, there were 30 schools that were at least 75 percent low income by lunch program participation rates but did not receive any Title I money.

Martinez says the district is indeed considering eliminating welfare rates from the Title I formula. “We’re looking at it for the future,” he says, though no timetable has been set.

Historically, the formula’s balance between welfare rates and lunch program participation was a point of contention between the African-American and Hispanic communities, with the latter participating proportionately higher in the lunch program and, therefore, favoring that element.

Meanwhile, the district is going to work with the schools that face the deepest poverty funding cuts, and may temporarily restore some, but not all, of those funds. When the Title I distribution formula was last changed in 1997, the district paid out $17 million to soften the blow for 42 affected schools. (See Catalyst May 1997)

“We’re trying to help,” he says. “Budgets for next year are still being adjusted.”

Alexander Russo is a Catalyst contributing editor. E-mail him at

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