ESEA, TITLE I

PROGRAM DIRECTIVE

TO : Chief State School Officers

PURPOSE: To transmit preliminary estimates of SY 1998-99 allocations for programs authorized by Title I of the Elementary and Secondary Education Act, as amended, provided in the FY 1998 Department of Education Appropriations Act (P.L. 105-78)

I am pleased to transmit estimated Title I allocations for SY 1998-99 for your State for the Title I programs administered by the Office of Compensatory Education Programs. These estimates are preliminary and should be used only as a guide for program planning. The formula count on which these estimated county amounts are based include revised 1994 updated census poverty counts of children ages 5 through 17 used in accordance with the recommendation of the National Academy of Sciences (NAS). The count of children used for the other factors of the Federal formula, however, are last year?s counts. Therefore, the count of formula children used to determine final SY 1998-99 allocations will vary slightly from the count we used for these estimates. Further, the data for the State per-pupil expenditure (SPPE), from which the cost factor in the formula is derived, are preliminary and subject to further changes. As a result, the final allocations to be announced in late March or early April will differ from these preliminary estimates.

Estimates are provided for the following Title I programs:

1. Basic grants (Title I, Part A, section 1124)

2. Concentration Grants (Title I, Part A, section 1124A)

3 Capital Expenses (Part A, section 1120(e))

4. Even Start Family Literacy (Title I, Part B)

5. Comprehensive School Reform (Title I, section 1501)

P.L. 105-78 provided $6.2 billion for Basic Grants, a slight ($783 thousand) decrease in funding from SY 1997-98 and $1.1 billion for Concentration Grants, a $79 million increase over last year. The FY 1998 Appropriations Act established a 100 percent hold-harmless guarantee at the school district level for Basic and Concentration Grants for SY 1998-99, which would ensure that each eligible local educational agency (LEA) will receive at least the amount it was allocated last year. Even Start received a $22 million increase, providing that program with $124 million for SY 1998-99, while Capital Expenses was level-funded at $41 million. Congress also provided $120 million under Title I and $25 million through the Fund for Improving Education, administered by the Office Educational Research and Improvement, for the new Comprehensive School Reform Program.

NAS?s Panel on Small Area Estimates issued its final report in January on the use of 1994 census poverty estimates, based on income earned in 1993, to allocate Title I, Part A funds. The Panel recommended to the Secretaries of Education and Commerce that "the Census Bureau?s revised 1993 county estimates of poor school-age children [collected in 1994] be used in the Title I allocations for the 1998-99 school year." Accordingly, these preliminary allocations reflect the full use of the 1994 census poverty updates rather than an average of the updated 1994 estimates and the 1990 census data that were used to allocate SY 1997-98 Title I funds.

Note, however, that the 100 percent hold-harmless requirement provided by Congress for Basic and Concentration Grants limits the impact that the use of the updated census data has on these allocations. Because Congress did not appropriate sufficient funds for Basic Grants to ensure that every county or eligible LEA be allocated its hold-harmless amount, the Department had to establish a "floating hold-harmless," derived from the amount needed to meet the 100 percent hold-harmless requirement and adjusted to the actual amount made available. For Basic Grants, therefore, most counties should receive approximately 99.97 percent of the amount received in SY 1997-98. In the case of Concentration Grants, sufficient funds are available to ensure that all eligible counties receive at least an allocation equal to what they received in SY 1997-98.

We expect to announce final Title I allocations for SY 1998-99, which include the updated counts of children that make up the other factors in the Federal formula and the final SPPE data, in late March or early April. Questions regarding the enclosed estimates of Title I allocations may be referred to Ms. Mary Jean LeTendre, Director of Compensatory Education Programs at (202) 260-0826.

Gerald N. Tirozzi
Assistant Secretary for
Elementary and Secondary Education