Introduction

Title I-A of the Elementary and Secondary Education Act (ESEA) authorizes aid to local educational agencies (LEAs) for the education of disadvantaged children. Title I-A grants provide supplementary educational and related services to low-achieving and other students attending elementary and secondary schools with relatively high concentrations of children from low-income families. In recent years, Title I-A has also included a number of requirements affecting broad aspects of public elementary and secondary education for all students, which have been attached as conditions for receiving Title I-A grants. The ESEA was most recently comprehensively reauthorized by the Every Student Succeeds Act (ESSA; P.L. 114-95).

The Title I-A program receives appropriations on an annual basis in the Department of Education (ED) title of the Labor, Health and Human Services, Education and Other Related Agencies (Labor-HHS-ED) appropriations act. The program received $18.4 billion in FY2023 through Division H of the Consolidated Appropriations Act, 2023 (P.L. 117-328; hereinafter referred to as the "FY2023 L-HHS-ED appropriations act" or "FY2023 enacted appropriations"), which accounted for over 60% of all appropriations provided for ESEA programs. The FY2024 Labor-HHS-ED appropriations bill was considered and agreed to by voice vote by the House Appropriations Committee (HAC) Subcommittee on Labor, Health and Human Services, and Education on July 14, 2023 (hereinafter referred to as the "HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill").¹ If that bill were enacted into law, it would substantially reduce the amount of funding available for the Title I-A program for FY2023.² The bill would also provide FY2024 Title I-A appropriations, but at a funding level that would be less than the FY2023 enacted appropriations level.

This report has been prepared in response to congressional interest in Title I-A appropriations and the possible effects of the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill on these appropriations for FY2023 and FY2024. The report begins with an overview of the Title I-A formulas, providing background information for understanding how the formulas work. This is followed by a discussion of the FY2023 enacted appropriations and the FY2023 and FY2024 proposed appropriations included in the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill. The next part of the report discusses how these appropriations levels were analyzed to estimate state grants under the Title I-A program. The final section of the report analyzes estimated state grants under the FY2023 enacted appropriations, changes to FY2023 enacted appropriations included in the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill, and FY2024 appropriations included in the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill.

Title I-A Formulas

Title I-A of the ESEA authorizes aid to LEAs for the education of disadvantaged children. Title I-A grants provide supplementary educational and related services to low-achieving and other students attending elementary and secondary schools with relatively high concentrations of children from low-income families. In recent years, Title I-A has also been used as a vehicle to which a number of requirements affecting broad aspects of public elementary and secondary education for all students have been attached as conditions for receiving Title I-A grants.

Under Title I-A, funds are allocated to LEAs via states using four different allocation formulas specified in statute: the (1) Basic Grant formula, (2) Concentration Grant formula, (3) Targeted Grant formula, and (4) EFIG formula. Annual appropriations bills specify that portions of each year's appropriation be allocated under each of these different formulas.³ Under three of the formulas—Basic Grant, Concentration Grant, and Targeted Grant—grants are initially calculated at the LEA level. State grants are the total of allocations for all LEAs in the state,⁴ adjusted for state minimum grant provisions. Under EFIG, grants are first calculated for each state overall and then funds are subsequently suballocated to LEAs within a state using a different formula. Once funds reach LEAs, the amounts allocated under the four formulas are combined and used jointly.⁵

For each formula, a maximum grant is calculated by multiplying a formula child count, consisting primarily of estimated numbers of school-age children living in families in poverty, by an expenditure factor, which is based on state average per pupil expenditures (APPE) for public elementary and secondary education. In some formulas, additional factors are multiplied by the formula child count and expenditure factor. These maximum grants are then ratably reduced so that in the aggregate they equal the level of available appropriations for each formula, taking into account a variety of state and LEA minimum grant and hold harmless provisions. In general, LEAs must have a minimum number of formula children and/or a minimum formula child rate to be eligible to receive a grant under a specific Title I-A formula. Some LEAs may qualify for a grant under only one formula, while other LEAs may be eligible to receive grants under multiple formulas. Table 1 at the end of this section summarizes various characteristics of the four Title I-A formulas.

Formula Child Count and Formula Child Rate

The population used to determine Title I-A grants for the 50 states, the District of Columbia, and Puerto Rico (hereinafter referred to as states) includes children who are ages 5-17 and meet at least one of the following criteria: living in (1) families in poverty, according to estimates from the U.S. Census Bureau's Small Area Income and Poverty Estimates (SAIPE) program⁶; (2) institutions for neglected or delinquent children or in foster homes; or (3) families with income above the federal poverty level but who receive local assistance through Temporary Assistance for Needy Families (TANF).⁷ Each of these counts is updated annually. To obtain the percentage of children in an LEA that are formula children (also referred to as the formula child rate), the formula child count is divided by the total number of children ages 5-17 living in the LEA's geographic boundaries. The data on the total number of children also are based on SAIPE estimates. In FY2023, children in poor families accounted for 97.15% of the total formula child count, aligning with the first criterion listed above.⁸

To be eligible to receive a grant under each of the formulas, an LEA must meet certain eligibility requirements. The eligibility requirements vary from formula to formula. As detailed in Table 1, the thresholds that an LEA must meet with respect to its formula child count and formula child rate are lower for the Basic Grant formula than for the other formulas, while the Concentration Grant formula has the highest thresholds that an LEA must meet in terms of number of formula children or formula child rate. The Targeted Grant and EFIG formulas each have the same eligibility criteria, which are similar to the Basic Grant formula eligibility requirements but with a higher formula child rate threshold.

Weighted LEA Formula Child Counts for Targeted Grant and EFIG Formulas

Both the Targeted Grant and EFIG formulas utilize a weighted formula child count to increase aid to LEAs with the highest numbers or percentages of formula children. In general, children counted in the formulas are assigned weights on the basis of (1) each LEA's formula child rate (commonly referred to as percentage weighting) and (2) each LEA's number of formula children (commonly referred to as number weighting). The weights are applied under number weighting and under percentage weighting in a stepwise manner to all LEAs for which ED calculates Title I-A grants to produce two weighted formula counts. The higher of the two weighted counts is used to determine LEA grant amounts. In general, the higher an LEA's formula child count or formula child rate is, the higher its grant amount per child counted in the formula will be.

Expenditure Factor

For LEAs in a given state, the expenditure factor for all four Title I-A formulas is equal to state APPE for public elementary and secondary education,⁹ subject to a minimum and a maximum percentage of the national average, further multiplied by 0.40. State APPE is subject to a minimum of 80% and a maximum of 120% of the national APPE for Basic, Concentration, and Targeted Grants. That is, if a state's APPE is less than 80% of the national APPE, the state's APPE is automatically raised to 80% of the national APPE. If a state's APPE is more than 120% of the national APPE, the state's APPE is automatically reduced to 120% of the national APPE. For EFIG, the minimum and maximum thresholds for state APPE relative to national APPE are 85% and 115%, respectively. After adjustments, should they be needed, a state's APPE is multiplied by 0.40 as specified in statute.

LEA Hold Harmless and State Minimum Grant Provisions

All four formulas contain hold harmless provisions to prevent large decreases in LEA grant amounts from year to year, assuming appropriations are sufficient to provide hold harmless amounts. Assuming appropriations are sufficient, a Title I-A hold harmless amount is the minimum grant amount an LEA will receive in a given year based on a specified percentage of the LEA's prior-year grant amount. Under all four formulas, LEAs with a relatively high percentage of formula children receive a higher hold harmless level. More specifically, the hold harmless rate under each formula is 85% of the previous-year grant if the LEA's percentage of formula children is less than 15%; 90% if the LEA's percentage of formula children is at or above 15% and less than 30%; and 95% if the LEA's percentage of formula children is at or above 30%. To benefit from the hold harmless provisions under each formula, an LEA must meet the eligibility requirements for the specific formula. The exception to this requirement is that LEAs that met the eligibility requirements to receive a Concentration Grant but fail to meet the requirements in a subsequent year will continue to receive a grant based on the hold harmless provisions for four additional years after the year in which the LEA last met eligibility requirements.

All four formulas have state minimum grant provisions. State minimum grant amounts for each formula are calculated in part or in whole based on a specified percentage of the level of appropriations provided to each formula. This percentage is higher under the Targeted Grant and EFIG formulas than it is under the Basic and Concentration Grant formulas.

Factors Included Only in the EFIG Formula

The EFIG formula includes two factors used to determine state-level grants that are not included in any of the other three formulas—the effort factor and the equity factor. The effort factor for each state is based on APPE for public elementary and secondary education compared to personal per capita income (PCI) for each state compared to the ratio of those figures for the nation as a whole.¹⁰ In general, the effort factor benefits states that have a relatively high level of spending on education relative to the PCI in their state. Similar to the expenditure factor, the effort factor is also bounded, but with more narrow bounds of 0.95 and 1.05. These relatively narrow bounds diminish the influence of the effort factor in the determination of state grants. The effort factor is the same for all LEAs in a given state.

The equity factor for each state is determined based on variations in current expenditures per pupil (CEPP)¹¹ among the LEAs in the state. A measure of disparity referred to as the coefficient of variation (CV) measures the average amount of difference within a state among each LEA's CEPP and the state average CEPP.¹² The CV is subtracted from 1.3 to produce a state's equity factor. The application of the equity factor results in higher grants to states with less variation in CEPP (i.e., lower CV) among their LEAs and lower grants to states with greater variation in CEPP (i.e., higher CV) among their LEAs. That is, the equity factor favors states that have the least amount of disparity in spending among their LEAs.

In addition to determining state grant amounts under EFIG, the equity factor is also used in the determination of LEA weighted student counts for the purposes of suballocating grants to LEAs. Depending on a state's CV, one of three sets of weights is used in determining an LEA's weighted formula child count.¹³ While the use of the equity factor in determining state grants rewards states where variation of CEPP among LEAs varies the least, at the LEA level higher weights are generally used in determining weighted student counts for LEAs in states where CEPP among LEAs varies more (i.e., a state has a higher CV). Within a state with more variation in CEPP among its LEAs, the use of higher sets of weights results in higher grants for LEAs with a relatively high number of formula children or a relatively high formula child rate relative to what would be provided if only a single set of weights were used. Conversely, the lower the variation in CEPP among LEAs in a given state, the lower the weights used to determine weighted formula child counts. Thus, in a state with less variation in CEPP among its LEAs, the use of the weights produces smaller differences in the weighted formula child counts of LEAs with a relatively high number of formula children or a relatively high formula child rate as compared with other LEAs in the state.

Summary of Formula Characteristics

Table 1 provides a summary of the Title I-A formula characteristics discussed in this section.

Proposed Title I-A Appropriations for the 2023-2024 and 2024-2025 School Years

As previously discussed, the Title I-A program receives appropriations on an annual basis in the Department of Education title of the Labor-HHS-ED appropriations act. The program receives both forward funding and advance appropriations.¹⁴ Forward funding for Title I-A becomes available during the last quarter of the budget year (i.e., July 1) but remains available through the following fiscal year. For example, forward funding included in FY2023 enacted appropriations became available on July 1, 2023, and will remain available through September 30, 2024. Advance appropriations for Title I-A become available one fiscal year after the budget year covered by a given appropriations act and are available for only that fiscal year. For example, advance appropriations included in the FY2023 Labor-HHS-ED appropriations act will become available on October 1, 2023, and remain available through September 30, 2024.

In practice, ED makes Title I-A grants for a given fiscal year based on the forward funding provided for the current fiscal year and the advance appropriations provided for the following fiscal year. For example, when ED determines Title I-A grants for the 2023-2024 school year (SY), the appropriations being used include forward funding provided for FY2023 ($7.5 billion) and advance appropriations provided for FY2024 ($10.8 billion).¹⁵ An initial portion of Title I-A funds were awarded by ED on July 1, 2023, and the remaining funds are awarded on October 1, 2023. Collectively, all of these funds are being provided for SY2023-2024.

The HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill would rescind $8.7 billion of the FY2024 advance appropriations for Title I-A that were provided in the FY2023 L-HHS-ED appropriations act.¹⁶ The practical effect of the proposed rescission if it were to be enacted would be that the remainder of the Title I-A grants that ED otherwise would have been distributing for SY2023-2024 on October 1, 2023, would be substantially cut.¹⁷ Proposed changes to the amount of funding available for Title I-A grants for SY2023-2024 are detailed in Table 2.

The HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill also includes forward funding (FY2024 funds) and advance appropriations (FY2025 funds) for Title I-A. Collectively, these are funds that ED would award as FY2024 Title I-A grants that would be used for SY2024-2025. As detailed in Table 3, when compared to the enacted appropriations for SY2023-2024, the proposed appropriations for SY2024-2025 would result in a decline of $6.0 billion (32.81%) in Title I-A funding. When compared to the proposed adjusted appropriations for SY2023-2024 (after accounting for the proposed rescission of $8.7 billion from those funds that have already been enacted for Title I-A grants for SY2023-2024), the proposed appropriations for SY2024-2025 would result in a $2.6 billion (27.16%) increase in Title I-A appropriations.

As no detailed appropriations table accompanied the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill, CRS determined the amount of forward funding and advanced appropriations that would be available for Title I-A using the bill text. The bill text indicates that a total of $13,055,290,000 would be provided for the Education for the Disadvantaged account (the account that includes appropriations for Title I-A). Of these funds, $2,126,990,000 would become available on July 1, 2024 (forward funding), and $10,841,177,000 would become available on October 1, 2024 (advance appropriations). The remainder of the funds ($87,123,000) would become available on the first day of the FY2024 fiscal year. The bill also indicates the programs that would receive these appropriations, which are the same programs that received appropriations under this account in the FY2023 Labor-HHS-ED appropriations act. These programs include the following:

• Title I-A;
• Education of Migratory Children (ESEA Title I-C);
• Prevention and Intervention Programs for Children and Youth Who Are Neglected, Delinquent, or At-Risk (ESEA Title I-D);
• Comprehensive Literacy State Development Grants (ESEA Title II-B);
• Innovative Approaches to Literacy (ESEA Title II-B); and
• Special Programs for Migrant Students (Higher Education Act, Title IV-A-5)

Of these programs, only Title I-A receives advance appropriations.¹⁸

The HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill specifies the amount of funding that would be provided to each of the Title I-A formulas, totaling $12,354,302,000 of the proposed appropriations for the Education for the Disadvantaged account. This total accounts for all of the $10,841,177,000 in advance appropriations and a portion of the remaining funding that, when added to the advance appropriations, sums to $12,354,302,000. Thus, Title I-A would receive $1,513,125,000 in forward funding (FY2024 funds) and $10,841,177,000 in advance appropriations (FY2025 funds).¹⁹ The other programs listed above would receive the remaining $700,988,000‬ in proposed appropriations.

Title I-A Appropriations for FY2023 and Proposed Title I-A Appropriations for FY2024

From an appropriations standpoint, the appropriations for Title I-A can also be discussed in terms of the appropriations provided for an actual fiscal year (as opposed to how funds are considered in practice by ED and used by states, LEAs, and schools). From this perspective, FY2023 appropriations are a combination of the forward funding provided for FY2023 in the FY2023 Labor-HHS-ED appropriations act²⁰ and the advance appropriation provided for FY2023 in the FY2022 Labor-HHS-ED appropriations act.²¹ Similarly, FY2024 appropriations under the proposal would be a combination of the forward funding that would be provided for FY2024 in the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill, and the net of the advance appropriation already enacted for FY2024 in the FY2023 Labor-HHS-ED appropriations act minus the accompanying rescission included in the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill. The HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill would reduce the amount of forward funding for FY2024 relative to FY2023 by $6.0 billion (79.95%). In addition, the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill would rescind $8.7 billion (79.99%) of the funds provided for advance appropriations for FY2024. These proposed reductions in forward funding and advance appropriations would have the combined effect of lowering the overall FY2024 appropriations for Title I-A relative to the appropriations provided for FY2023 by $14.7 billion (79.98%). Table 4 depicts this comparison.

The subsequent analysis presented in this report focuses on enacted and proposed appropriations for Title I-A grants that ED will use to make grants for SY2023-2024 and SY2024-2025 (Table 2 and Table 3), and not the total budgetary effects by fiscal year.

Methodology for Analyzing Proposed Appropriations for the 2023-2024 and 2024-2025 School Years

This section discusses the methodology used to analyze proposed appropriations for SY2023-2024 (referred to as "FY2023 grants" from this point forward) and SY2024-2025 (referred to as "FY2024 grants" from this point forward). As discussed previously, to make grants for SY2023-2024, ED will use FY2023 forward funding and FY2024 advance appropriations for Title I-A provided in the FY2023 L-HHS-ED appropriations act. The HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill would rescind $8.7 billion of the FY2024 advance appropriation included in the FY2023 L-HHS-ED appropriations act (Table 2). Similarly, ED will use FY2024 appropriations to make grants for SY2024-2025. These appropriations would include the FY2024 forward funding and FY2025 advance appropriations for Title I-A provided in the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill (Table 3).

Three Sets of Estimated Grants

For the purposes of the analysis, three sets of estimated grants have been calculated:

• 1. Estimated FY2023 grants (for SY2023-2024) have been calculated based on the provisions included in the FY2023 Labor-HHS-ED appropriations act.
• 2. Estimated FY2023 grants (for SY2023-2024) have also been calculated based on the provisions detailed in the FY2023 Labor-HHS-ED appropriations act, with the $8.7 billion rescission to advance appropriations included in the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill.
• 3. Estimated FY2024 grants (for SY2024-2025) have been calculated based on the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill. For estimation purposes, FY2024 grants were calculated assuming that the $8.7 billion rescission affecting FY2023 grant amounts had been applied, as the determination of Title I-A grants for a given year (i.e., FY2024) depends, in part, on grant amounts received the previous year (i.e., FY2023).²²

Table 5 provides total appropriations (forward funding and advance appropriations) for each of the aforementioned scenarios. It also provides the amount and share of the total appropriation provided to each Title I-A formula. Prior to determining LEA grant amounts, funds are reserved from the appropriation for the Basic Grant formula for the U.S. Census Bureau, the outlying areas,²³ and the Bureau of Indian Education (BIE). Funds are also reserved from the other three Title I-A formulas for the outlying areas and the BIE. Table 5 details the amount available for grants to LEAs after these reservations of funds are made.

As detailed in Table 5, for FY2023 the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill would substantially reduce the amount of funding available under the Concentration Grant, Targeted Grant, and EFIG formulas for FY2023 relative to enacted appropriations. For FY2024, the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill would increase funding for these three formulas relative to the amount proposed for FY2023 but would reduce the amount of funding available for the Basic Grant formula relative to the proposed FY2023 amount.

Data

Estimates provided in this report are based on unpublished data used by ED to determine FY2023 grants.²⁴ The FY2023 data are preliminary and are expected to change prior to the determination of final FY2023 Title I-A grants. In addition, data needed to determine FY2024 grants are not yet available, so estimated FY2024 Title I-A grants were calculated using the preliminary FY2023 Title I-A data. All estimated state grants presented in this report are provided solely to assist in comparisons of the relative impact of various appropriations levels and of formula alternatives to inform the legislative process. They are not intended to predict specific amounts that states or LEAs will receive for any fiscal year under Title I-A.

Estimated State Grant Amounts

This section provides estimated state grants for FY2023, which are funds that would be used primarily during SY2023-2024.²⁵ Grant estimates are provided for FY2023 based on enacted FY2023 appropriations and the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill, which would rescind $8.7 billion in advance appropriations that have been appropriated for use during SY2023-2024 (Table 2). Grant estimates are also provided for FY2024, which are funds that would be used primarily during SY2024-2025, based on the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill (Table 3). Table 6 presents estimated FY2023 and FY2024 grants to states based on enacted FY2023 appropriations and the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill.

For the purposes of discussing the findings, estimated FY2023 grant amounts refer to funds that will be used primarily during SY2023-2024. This includes forward funding provided for FY2023 ($7.5 billion) and advance appropriations provided for FY2024 ($10.8 billion) in the FY2023 enacted appropriations. It also includes the provision in the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill that would rescind $8.7 billion of these advance appropriations (Table 2).

Estimated FY2024 grants refer to funds that will be used primarily during SY2024-2025. This includes forward funding provided for FY2024 ($1.5 billion) and advance appropriations provided for FY2025 ($10.8 billion) in the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill (Table 3).

When estimated FY2023 grants to states under the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill ($9.6 billion available for state grants) are compared with estimated FY2023 grants to states based on the enacted appropriations for FY2023 ($18.2 billion available for state grants), every state is estimated to receive a lower grant amount (Table 6). The reductions in estimated grant amounts range from $18.3 million (42.72%) in Vermont to $975.3 million (46.25%) in California. In terms of percentage losses, the estimated decreases in state grant amounts range from 42.72% in Vermont to 53.78% in Maryland. As the proposed funding levels for FY2023 under the Concentration Grant, Targeted Grant, and EFIG formulas are substantially lower than the appropriations available in FY2022, many states would only receive the minimum grant amount under one or more of the Title I-A formulas, resulting in smaller estimated overall Title I-A state grants than are estimated to be received based on the FY2023 enacted appropriations

When the estimated FY2024 state grant amounts ($12.2 billion available for state grants) are compared with the estimated FY2023 state grant amounts based on enacted appropriations ($18.2 billion available for state grants), every state is estimated to receive a lower grant amount in FY2024 than in FY2023. The reductions in grant amounts range from $7.4 million (17.30%) in Vermont to $718.7 million (34.08%) in California. In terms of percentage losses, the estimated decreases in state grant amounts range from 17.30% in Vermont to 38.28% in Washington.

When the estimated allocations across FY2023 and FY2024 under the HAC subcommittee-approved FY2024 Labor-HHS-ED appropriations bill are examined, the following trends emerge. In FY2024, an estimated $12.2 billion would be available for state grants, which is more than the $9.6 billion estimated to be available for FY2023 state grant amounts—which would be affected by the $8.7 billion rescission. Under this comparison, every state is estimated to receive a higher Title I-A grant in FY2024. The increases in grant amounts range from $10.9 million (44.37%) in Vermont to $261.6 million (35.90%) in New York. In terms of percentage increases, the estimated increases in state grant amounts range from 15.42% in Arizona to 68.25% in Hawaii. As discussed previously, however, these estimated FY2024 grants amounts would be substantially lower than estimated grant amounts based on FY2023 enacted appropriations ($18.2 billion available for state grants).