Appendix E: Charter Schools and Title I

Some observers have questioned whether charter schools have been able to garner their fair share of federal funding. The question raises a complex set of issues around the status of charter schools and their relationships to the traditional organizational structure of the educational systems in their state. Although we are not able to provide a full answer to the question of access to federal funding, we are able to provide some information on charter schools' access to funding from Title I--the largest program of federal support for schools.

Title I is a federal program that provides assistance to schools and districts serving in areas with high concentrations of low-income students. Under the program, the federal government awards grants through state education agencies to school districts serving low-income students. Districts in turn distribute Title I funds to schools based on their concentrations of students in poverty. Title I program regulations require districts to rank each of their schools from those serving the highest to the lowest percentage of low-income children. Districts must serve, in order of poverty, schools enrolling more than 75 percent of students from low-income families. The regulations allow districts to make decisions on serving the remaining schools based on their rankings.

Because charter schools do not always fit easily within the administrative and funding structures designed to provide funds for disadvantaged students, their participation in Title I and other federal programs available to public schools has not been fully resolved in many states and districts.^[1] For example in some states (e.g., Arizona and Michigan), charter schools are considered to be independent districts and as such qualify for basic grants if they have a minimum threshold of ten eligible students who make up more than two percent of the school's population (the rule for district eligibility). In other states (e.g., California and Colorado), charter schools are treated as district schools and are funded based on the 75 percent rule and district policy described above. Charter schools face an additional obstacle. Because Title I funding is typically based on enrollment data from the previous year, newly created schools are not eligible for Title I funds in their first year of operation.^[2]

In our telephone survey, we asked charter schools whether they were eligible for Title I funds. Respondents who answered affirmatively were then asked if they were receiving Title I funds. Exhibit E-1 presents the data from the survey.

EXHIBIT E-1

STATE-BY-STATE COMPARISON OF CHARTER SCHOOLS: REPORTED ELIGIBILITY AND RECEIPT OF TITLE 1 FUNDING (1996-97)

State

# of charter schools responding

# reporting eligibility^[1]

% reporting eligibility

# reporting eligibility that receive
funding^[2]

% reporting eligibility that receive
funding

California

95

54

56.8%

31

60.8%

Arizona

86

63

73.3%

29

46.0%

Michigan

66

55

83.3%

21

38.2%

Colorado

30

17

56.7%

5

31.3%

Minnesota

18

15

83.3%

10

66.7%

Massachusetts

16

12

75.0%

9

75.0%

Texas

14

14

100.0%

12

85.7%

Wisconsin

9

1

11.1%

1

100.0%

Georgia

9

6

66.7%

5

83.3%

Florida

4

2

50.0%

1

50.0%

New Mexico

4

2

50.0%

1

50.0%

Louisiana

3

2

66.7%

2

100.0%

Alaska

2

1

50.0%

1

100.0%

Delaware

2

2

100.0%

2

100.0%

District of Columbia

2

2

100.0%

0

0.0%

Hawaii

2

0

0.0%

0

--

Total

362

248

68.5%

130

53.3%

1 The exhibit draws on data from 362 open charter schools that provided information on Title I eligibility.

2 Four charter schools that were eligible for Title I did not provide information on receipt of Title I funding; data on these schools are excluded from the percentages presented in the final column of this exhibit.

Because of the complexities surrounding charter schools and Title I, one must interpret data on charter schools' Title I eligibility and actual participation carefully (see Exhibit E-1). Consequently, for the purpose of this analysis, we will focus on reported eligibility for Title I, rather than reported receipt of Title I funds.^[3] The third data column in Exhibit E-1 shows that the percentage of charter schools reporting eligibility for Title I varies greatly across states.^[4] In Texas, all the charter schools reported eligibility, while in Wisconsin only 11 percent reported that they were eligible.

In 1998, the U.S. Department of Education issued guidance to state departments of education that specifically allows more flexibility for determination of charter school eligibility in their first year of operation. Over the remainder of the study, we will continue to track charter schools and Title I.

1 Charter schools' eligibility for Title I can be complicated; eligibility depends on (1) whether the charter school is part of a school district or independent from any district; (2) the poverty rate of the charter school; and (3) the poverty cutoff that determines schools' eligibility for Title I in the district. Thus, in the 1996-97 school year, slightly more than 69 percent of charter schools reported that they were eligible to receive Title I funds, yet only slightly more than half (53 percent) of these schools reported that they receive funding under the program (see Exhibit E-1). This finding is about the same as last year's. Last year's report noted that two-thirds of charter schools said that they were eligible to receive Title I funds, but only about one-half actually received them.

2 In 1998, the U.S. Department of Education issued guidance to state departments of education that specifically allows more flexibility for determination of charter school eligibility in their first year of operation.

3 Of the 182 schools that responded to the follow-up survey, 46 schools reported a change in their eligibility for Title I between the two school years: 21 schools became ineligible for Title I, 19 schools became eligible, and six schools did not provide information on eligibility for the 1996-97 school year. Of the 19 schools that reported becoming eligible for Title I funding during the 1996-97 school year, only six schools (32 percent) reported receiving Title I funding for that school year.

4 We were unable to obtain data on Title I eligibility for all public schools within the 16 charter states.
-###-

[Appendix D: Supplemental Exhibits for Chapter IV]

[About This Study]

State	# of charter schools responding	# reporting eligibility^[1]	% reporting eligibility	# reporting eligibility that receive funding^[2]	% reporting eligibility that receive funding
California	95	54	56.8%	31	60.8%
Arizona	86	63	73.3%	29	46.0%
Michigan	66	55	83.3%	21	38.2%
Colorado	30	17	56.7%	5	31.3%
Minnesota	18	15	83.3%	10	66.7%
Massachusetts	16	12	75.0%	9	75.0%
Texas	14	14	100.0%	12	85.7%
Wisconsin	9	1	11.1%	1	100.0%
Georgia	9	6	66.7%	5	83.3%
Florida	4	2	50.0%	1	50.0%
New Mexico	4	2	50.0%	1	50.0%
Louisiana	3	2	66.7%	2	100.0%
Alaska	2	1	50.0%	1	100.0%
Delaware	2	2	100.0%	2	100.0%
District of Columbia	2	2	100.0%	0	0.0%
Hawaii	2	0	0.0%	0	--
Total	362	248	68.5%	130	53.3%