Imagine you’re a school principal and that several weeks into the school year, you’re told your school will receive an additional $400,000. You might be tempted to look outside for the Publishers Clearinghouse Prize Patrol van.

Now imagine that you’re told your school will lose $400,000 and that you have three weeks to cut programs, devise a new budget and win approval from your local school council. In this case, you might be looking for the Red Cross.

In late September, more than 400 Chicago schools were stunned with such news as the school administration abruptly redistributed more than $164 million in federal funds known as Title 1 (formerly federal Chapter 1).

“I expected maybe $100,000 would be cut,” says Wilfredo Ortiz, principal of Lowell Elementary School. “Never in my wildest dreams did I expect to lose $415,000. And that was on top of $75,000 I lost in state Chapter 1.”

Lowell’s allocation went from $758,000 last year to $343,591 this year. “We found out about the actual cut at a regional meeting after school had started, and I had already hired people whom I never would have hired if I’d known this cut was coming,” Ortiz relates. “We cut all our after-school programs and enrichment programs. We had to close about six teaching positions. We had to close a computer lab funded through Title 1. We lost a school/community representative. We have no equipment money, no money for supplies, no money for field trips, transportation, furniture, summer school, no money for remediation.”

Meanwhile, high schools were the biggest winners, with Chicago Vocational taking the top prize. Its Title I allocation skyrocketed from $127,050 last year to $1,099,668 this year—a more than eight-fold increase. Among the school’s plans: reducing class sizes for “at-risk” students and providing extra instruction in reading, math and study skills.

Dunbar Vocational’s allocation more than tripled, to $921,346. Principal Floyd Banks says he heard rumors over the summer that his school might receive a big increase, but the final figures were $300,000 more than he had anticipated. Banks plans to replace typewriters with computers in Dunbar’s typing labs so students can learn typing and word-processing at the same time. He also plans to buy more books.

The massive redistribution stems from a number of changes in federal law. In the past, achievement levels figured into the distribution formula; now, it’s only poverty that counts. (See CATALYST, June 1995.) In the past, every school got the same amount of money per low-income student; now school districts may give more money per pupil to schools with the heaviest concentrations of low-income students. In the past, schools whose poverty level was below the systemwide average were ineligible; now schools with poverty as low as 35 percent are eligible.

High school windfall

In addition, notes Margot Rogers of the Center for Law and Education in Washington, D.C., “The new law requires that school systems rank the schools in the district starting with the poorest by percentage of poor students, regardless of grade level. So, for the first time, the school system must serve any school with more than 75 percent of its students living in poverty, whether it’s elementary, junior or high school. What that’s doing is pumping more money into high schools.”

Chicago ended up adding several dozen schools to the city’s federal Title I roster, bringing the total to 411.

Last spring, Chicago’s Department of Funded Programs recognized that the new law would force dramatic changes at many schools, and it sought to minimize the disruption and provide sufficient planning time. Its plan was to limit both funding increases and reductions to 15 percent of 1994-95 allocations. However, a number of reform groups objected, saying the plan would violate federal law. So, in early summer, Walter Allen, director of funded programs, drafted a waiver request to the U.S.Department of Education.

Under the new regulations, 17 public schools serving approximately 4,000 students no longer would be eligible to receive any Title 1 funds, he noted. “Without the waiver,” wrote Allen, “the abrupt termination of Title 1 funds will result in a chaotic and stressful reorganization of instructional services that will affect both students and staff.”

Noting that some schools would lose up to 50 percent of their funds while others would gain more than 2,000 percent, Allen maintained that “principals and local school councils are unable to adequately assess their current programs and make the necessary adjustments within the required time schedule.”

At the time, schools didn’t know what they were entitled to under the new law. Rather, they were operating on budget figures, presented to them in March, that kept changes to plus or minus 15 percentage points. However, planning for the use of discretionary money and using it on time has been a problem at some schools.

In any event, the Illinois State Board of Education agreed with Chicago’s waiver request and sent it along to Washington D.C. in early June.

Over the summer, Allen and federal officials exchanged a flurry of faxes and phone calls. By mid-August, the Department of Education suggested that federal regulations might allow Chicago enough flexibility to proceed with its plan even without a formal waiver.

‘Significant disruption’

Then on Sept. 20, the administration abruptly switched gears, sending letters to 417 principals, telling them of the new Title I allocations and, thereby, ensuring the “significant disruption” that it had previously sought to prevent.

Chief Instruction Officer Lula Ford said she made the decision because the Department of Education had not yet acted on the waiver request and that it was clear to her that without a waiver, the board could not phase in the new allocations.

“The worst scenario is to load your budget with one number, hire off of that number, and then, after school starts, have to change it,” observes Diana Lauber of the Chicago-based Cross City Campaign for Urban School Reform, which pushed many of the changes in federal law. “And that’s what we were warning them about.”

In an interview in mid-October, Mary Jean LeTendre, director of compensatory education for the U. S. Department of Education, said, “We weren’t anywhere near denying any kind of waiver. . . . Quite frankly, we’re much more sympathetic this year because of the changes, and if the waiver request was because of big disruptions, I’m sure the department would have looked sympathetically at that.”

Also in October, 19 school principals, including Ortiz, sent a letter to School Reform Board President Gery Chico asking for clarification of the formula.

“How is the allocation calculated?” asks Ortiz. “Is it equitable? What schools got money? How does it make any sense?”

Karen Morris, principal of Saucedo Academy, reports that when she called Allen and his boss, Chief Instruction Officer Lula Ford, “no one could explain the formula. We want to know the formula and how it was developed, so we can say to our LSCs and people who are laid off how it was done.”

Morris notes that when the Title I cuts were added to the state Chapter 1 cuts, Saucedo lost 20 percent of its discretionary funds, “which is a pretty big chunk.”

Now that the Title 1 allocations have been made for the current school year, a number of individuals and groups are urging the School Board to reconsider the way poverty is calculated in Chicago. This has long been a controversial issue in Chicago, with blacks and Hispanics tending to favor different formulas.

The Cross City Campaign for Urban School Reform has called for a blue ribbon task force to assess various formulas, hold public hearings and discuss alternatives.

Federal law gives school districts wide discretion in devising a formula. Factors can include census data, eligibility for free and reduced-price lunches, children in families receiving Aid to Families with Dependent Children (AFDC), children eligible to receive medical assistance under Medicaid, or a combination of any of these.

In recent years, Chicago has used both AFDC and free and reduced-price lunch counts, giving equal weight to each. Critics have called for greater reliance on the lunch counts, which would benefit schools with Hispanic students because Hispanic families have relatively low participation in AFDC.

According to the U.S. Department of Education, the lunch count is the most common measure used by school districts.

After conducting exhaustive research, New York City concluded that its formula of 60 percent AFDC and 40 percent free and reduced-price lunch was flawed for a number of reasons. “A lot of immigrants are not picked up on AFDC even though they may be very poor,” explains Susan Breslin, an independent consultant in New York specializing in educational equity issues.

By looking at a variety of factors—including AFDC, Medicaid, foster care and Supplemental Security Income—researchers in New York found “huge bulges of undiscovered kids in certain neighborhoods, because while they weren’t on AFDC, hospitals would put them on Medicaid when they had babies,” Breslin reports. “The biggest surge among uncounted kids was among Hasidic Jews who are very poor, and hospitals put them on Medicaid.”

Now, New York looks at two sets of data for each school and picks the set that gives the school the highest count. One set is just children with approved applications for free—but not reduced-price—lunches. The other set includes children who are on AFDC, Medicaid or SSI or who are in foster care.

Because high school students are far less likely to apply for free lunches, school districts have devised various ways of assessing poverty for high schools, such as using the lunch count of the feeder elementary schools.

Another complicating factor is that calculations must be based in part on the poverty level of the school’s neighborhood, not just the children enrolled in the school. Some schools have higher poverty among their students than in the surrounding attendance area.

“These things are always highly charged and highly technical,” says Jeff Simering, legislative director for the Council of the Great City Schools. “Very few people significantly understand these things, and the data are always questionable.”

Debra Shore is a Chicago writer.

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