Rethinking the Federal Role in California Schools: Proposals for Reform

The Federal Role in California Schools’ Failure

Education reform is the source of acute interest here in the Golden State. The issue began to take center stage as California emerged from recession in the early 1990s, as poll after poll confirmed the public’s anxiety and growing skepticism about eroding student performance in the state’s public schools. Students languished near the bottom on National Assessment of Educational Progress (NAEP) tests in a variety of subjects, including math, science, and reading. The reasons behind California’s poor performance are numerous.

Only recently has the state adopted rigorous academic standards for its public school students. Since 1996, California has spent billions on class-size reduction. Nevertheless, a recent state-sponsored study finds that students in smaller classes are not necessarily learning a great deal more. Because of the costs associated with cutting class size, schools are often forced to sacrifice other programs such as libraries, music, and special education. Class-size reduction also exacerbates an already serious problem, making it even more difficult for low-performing districts to find quality instructors. The report concludes that more state dollars should be spent on ensuring good teaching, not smaller classes.1 Other problems abound.

California’s arcane school finance policy centralizes funding control in Sacramento, thereby restricting local decision-making. But despite claims that the state does not spend enough, money is not the problem. By law, education is the state’s biggest expenditure. Forty percent of all local, state, and federal funds in California, currently more than $40 billion, goes to K-12 programs. Reforms such as innovative charter schools and parental choice in education have proven their worth but still meet with stubborn resistance from California’s teacher unions, local school boards, the California Department of Education (CDE), and many lawmakers.

These are the principal reasons for California’s struggling public-school system. Yet the federal government must also share in some of the blame because its education policy has been misdirected when it comes to the state’s schools. Rather than encouraging innovation and local solutions, federal policy has come in the form of government mandates and ineffective programs with little accountability. Instead of helping to improve the dismal state of public education in California, federal policy has exacerbated many of the existing problems within the state’s system.

This briefing explains the scope and nature of federal involvement in California schools. It also examines the federal relationship with the CDE and assesses its efficiency and productivity for students. Then it turns to the Title I program of the Elementary and Secondary Education Act (ESEA), the federal government’s largest commitment to public schools, and examines how the plan operates in California. The briefing also addresses two of President Clinton’s favorite education programs, his federal class-size reduction plan and Goals 2000. It then examines federal special education mandates and their impact on school budgets in the Golden State. Next, it focuses on federal bilingual education policy here in California, and how federal mandates have intruded into district and state affairs. Finally, the paper looks at the federal role in education research and investment in the Comprehensive School Reform Demonstration Program, a federal research project designed to increase student performance.

After identifying the problems, the briefing addresses how to improve current programs and critiques reforms now being debated in Washington, D.C.

 

The Federal Government and the CDE: An Ineffective Alliance

Compared to large states like California, the federal government spends relatively little on education. For example, Congress spends approximately $13 billion each year on the Elementary and Secondary Education Act (ESEA), while California’s Proposition 98 K-12 spending (including money from the state’s general fund and local property tax revenues) will total about $33.6 billion for the 1999-00 fiscal year.2

Nationwide, the federal government contributes between seven and 10 percent annually of all education revenues. Overall, according to another Pacific Research Institute briefing, California will receive just under $4.4 billion in federal education funds for the current fiscal year.3 Federal spending accounts for approximately 10 percent of California’s K-12 revenues, while the state’s allocation for ESEA in FY 2000 will be approximately $1.2 billion.4 Even though federal spending is far outpaced by state expenditures, federal mandates cost more money, take additional time, and fail to yield many positive results.

A major portion of federal money never reaches children in classrooms. Instead, it is retained by state education agencies. According to a 1995 General Accounting Office (GAO) report, more than 38 percent of education funds retained by the CDE in 1993 originated from federal sources. Rather than assisting students in classrooms across the state, a large portion of federal money is used to pay salaries of CDE staff members. During that same year, more than 23 percent of CDE staff was supported by federal funds.5 Usually, the money went to state employees who ensure that California complies with federal mandates.

Since 1993, federally-funded bureaucracy within the CDE has increased. According to Governor Davis’s 1999-2000 budget estimate, of the $210 million spent on operations funding (costs associated with maintaining state bureaucracy) at the CDE, $91 million—more than 43 percent—came from federal sources.6 Furthermore, federal funds have been misused by the CDE, which oversees federal adult education money here in the state.

A July 1999 report by the State Auditor found lapses in CDE oversight responsible for the loss of approximately $20 million in federal adult education funds. The CDE doled out the federal money to "community-based organizations" in southern California without proper safeguards against fraud. Between 1994 and 1998, the California legislature earmarked $35.6 million in federal education funds for adult immigrants. The money was supposed to be used for English and citizenship courses, but after nearly half of the funds were distributed to a string of local groups, the state lost track of the money. When a CDE official began investigating the matter, he was promptly reassigned within the department, while two other department consultants were disciplined for writing and speaking out against the funding policy. The case first got the attention of federal authorities when one of the groups that received federal money, Hermandad Mexicana Nacional (The Mexican National Brotherhood), was implicated in voter fraud following the defeat of Republican Congressman Bob Dornan in 1996. Currently, all 10 of the groups that received federal funding from the CDE are under investigation by the FBI and the federal Department of Education.7

The State Auditor found that the groups receiving funding could not account for the money or the instructional time for which the funds were used. Moreover, the report criticized the CDE for failing to implement stricter accountability measures since the incident.

In December 1999, U.S. Attorney Paul L. Seave wrote California Superintendent of Public Instruction Delaine Eastin informing her that, over the course of a two-year investigation, federal agents had "found potential civil and criminal violations of the law" in CDE’s handling of federal adult education money. Federal prosecutors charge that the CDE "failed to administer the program to ensure proper disbursement and accounting of federal funds." Most notable among the alleged violations of the law are the CDE’s failure to require meaningful accountability for the use of federal funds, failure to cut off funding when these safeguards were violated, and failure to report the incidents to the U.S. Department of Education (USDE) as required by law. According to the U.S. Attorney’s office, the CDE knowingly gave USDE the impression that the program was operating according to the law. In his letter, U.S. Attorney Seave urged Eastin and her department to resolve the violations of the law cited by federal investigators within 30 days to avoid litigation.8

The rise in federally-subsidized state bureaucracy and the recent funding scandal highlight a series of problems with the relationship between the CDE and authorities in Washington. Rather than being directed toward classrooms and needy students, too much federal money is retained by the CDE. Those funds are then used to ensure compliance with federal mandates and to subsidize programs and staff that are only peripherally linked to classroom education, at best. Federal programs within the department lack sufficient accountability safeguards; how else could the CDE lose millions of dollars in taxpayer money? The current relationship between the CDE and the federal government might benefit some within the department and certain interest groups, but it fails to help California students.

 

Title I: Leaving Poor Children Behind

As mentioned before, the Elementary and Secondary Education Act (ESEA) is the federal government’s largest K-12 program, doling out $13 billion each year, primarily to school districts across the country. The Title I program is the largest component of ESEA, spending close to $8 billion annually on extra instruction for students from low-income families. Since ESEA’s inception in 1965, the federal government has spent $120 billion on Title I. Nearly half of all American schools receive Title I money, while 25 percent of the nation’s students claim assistance from the program. Title I accounts for 42 percent of every federal dollar spent on K-12 education. Nevertheless, Title I has failed to improve low-income student performance. The Citizen’s Commission on Civil Rights, a liberal advocacy group, complains, "Title I has not made enough of a difference to close the persistent achievement gaps between poor and non-poor students, and minority and non-minority students."9 This fact is especially true in California, where Title I funding totals over $1 billion annually.10

The program’s main problem is that rather than focusing on students’ performance and output, Title I has concentrated its efforts on access, ensuring that only "needy" students get federal money. In the process, the educational value of the program has deteriorated.

Following ESEA’s passage in 1965, federal regulators barred Title I money from being used for services otherwise provided to students or mandated by the state. As a result, teachers began to "pull out" low-income students from regular classroom instruction to receive tutoring from Title I aides and instructors. That way, a clear audit trail was established, and districts could ensure that Title I services were only spent on eligible students. By 1976, some 70 percent of Title I students received instruction in this manner.11

In a 1986 letter to then-U.S. Secretary of Education William Bennett, California Superintendent of Public Instruction Bill Honig wrote, "the isolation of (Title I) students and service providers undermines efforts to attain academic excellence in school. Planning for the use of (Title I) funds should be at the school level and constitute an integral part of the school’s total program."12

Following similar criticism from other states, Congress adopted the "schoolwide option," which allows Title I funds to be used for an entire school when a certain percentage of students’ families falls under the poverty line. Originally, that figure stood at 75 percent, but has declined to 50 percent of total enrollment over time. Schools no longer have to provide matching funds for non-Title I students when they exercise the schoolwide option.13

Despite these improvements, the Title I program has become a subsidy for teacher assistants and tutors, paying for 50,000 school aides across the country. According to a report commissioned for the USDE, between 70 and 80 percent of all Title I money goes to salaries for extra staff. Of this number, about half are instructional aides, 80 percent of whom do not have a bachelor’s degree.14 Furthermore, Title I includes no provision that allows federal money to be spent on teacher aides.

According to the Fordham Foundation, a free-market education think-tank, most schoolwide programs use their additional funding to hire aides, mostly to reduce class size.15 In California, the ratio of aides to teachers hired with Title I funds is four to one. In low-performing districts like the Los Angeles Unified School District (LAUSD), the ratio of aides to teachers stands at seven to one. Most of these aides do not teach, but serve as program coordinators at their individual schools.16

According to Mary Jean LeTrende, who helps oversee the Title I program at USDE, the program has amounted to little more than "a jobs program for members of the community," rather than "focusing on the needs of the kids." She claims USDE is considering whether to limit or eventually prohibit the use of Title I dollars to pay for aides, many of whom spend little to no time in front of a classroom. LeTrende cites one study that finds only 13 percent of Title I aides across the country have graduated from college. In the 1998-99 school year, LAUSD employed 6,540 part-time aides with federal money, consuming 40 percent of the district’s Title I budget. LAUSD spent only 21 percent of its Title I budget on teacher training and instruction, while the rest of the money was spent on instructional materials and support staff.17

Teacher aides contend that they do spend sufficient time with Title I students. In fact, at Garfield High School in East Los Angeles, the school’s budget for last year showed that of the 22 aides it employs with Title I money, all but five work in classrooms. Aides claim that more and more of them are taking college courses, and that they are often required to do so to keep their jobs.18 Regardless, Title I money should not be spent on aides and tutors in LAUSD or any other California district. To date, there is no conclusive research demonstrating that instructional aides in the classroom lead to higher academic outcomes for students. Federal money should follow students, not pay for sub-standard teaching assistants.

 

Title I: Ensuring Fair Distribution of Funds

While increasing federal funding is not a panacea for California’s education woes, ensuring that each eligible child receives an adequate level of support should be an important aspect of Title I fund distribution. Because Title I is directed toward the nation’s poor children, one would expect California to receive a significant portion of program dollars. In 1994, when Title I and ESEA were last re-authorized by Congress, the Golden State’s child poverty rate exceeded 24 percent, well above the national average of 20.4 percent. Moreover, California is home to 14.1 percent of the nation’s eligible Title I students. Yet the state only receives 11.7 percent of total Title I funding. California receives $601 in Title I funds per poor child, while the national average is $717, and some states receive up to $1,300 per student from a low-income family.19

When ESEA was last re-authorized in 1994, Congress continued the traditional approach of sending Title I funding to districts and states. Lawmakers from states with declining numbers of Title I-eligible students added an obscure amendment that guaranteed their constituencies the same level of funding they had received prior to reauthorization. This "hold-harmless" provision was again inserted in 1998. Thus, states that would have lost money benefited when their Title I funding levels remained static. Large states like California, that now had additional children to serve, found that their Title I funding increased more slowly than it should have, as money was diverted to states that did not have as many eligible children. California has many school districts that do not enjoy the same hold-harmless benefits as do other entire states.20

In the fiscal year 1999 budget, Congress again provided increased funding, this time an extra $300 million, of which $60 million went to the Golden State, but failed to send federal funding directly to low-income students. Title I and the other parts of ESEA are scheduled to be re-authorized during the second session of the current Congress. Senators from several states, including California, wrote President Clinton in March 1999 asking him to support legislation eliminating the "hold-harmless" provision. In its place, the lawmakers propose allocating Title I money to districts according to the actual number of children in need. A further improvement, direct allocation of Title I funds to the parents of eligible children, would treat all students from low-income families equally and allow families to exercise greater choice in determining their children’s educational futures.

 

The Administration’s Pet Projects

President Clinton has made class-size reduction a central component of his education agenda, believing it to be a principal vehicle for improving student performance. For fiscal year 1999, school districts across the country received a total of $1.2 billion, the largest amount of any new federal education program, to reduce class size by recruiting, hiring, and training new teachers. According to the USDE, this is the first installment of an initiative that is anticipated to provide $12.4 billion over seven years to hire 100,000 new teachers.21

Unfortunately for California, the program’s fine print falls short of its lofty expectations. According to the California Legislative Analyst’s Office (LAO), the state received $129 million to cut class size in grades one through three to 18 children per classroom. Despite the previously mentioned state-sponsored study that questions the effectiveness of class-size reduction, California has already spent $4 billion of its own money to cut student-teacher ratios from 30:1 to 20:1 in grades K-3. Overall, 92 percent of California students in grades one through three already are in classrooms with 20 students or less.

Under the program, the amount of federal money California districts receive varies widely. LAUSD took in $26 million of federal money to cut class size last year, while Casmalia Elementary School District, a small Santa Barbara County district, received a mere $116. Overall, the LAO estimates 585 of the state’s nearly 1,000 school districts will not receive enough federal funds to hire one additional teacher. Furthermore, federal funding sunsets after three years, after which time the district or state would have to foot the bill for additional teachers. Making the incremental change from 20 students per classroom to 18 would be especially costly for small schools. For example, a small school with one first-grade class of 20 students could not be divided without creating at least one additional class having 10 or fewer students.22

The LAO also identifies other more general problems. Many districts already have serious facility and land constraints. Accommodating the federal class-size program would only complicate these problems. President Clinton and Secretary of Education Richard Riley have promoted the administration’s school construction plan as a way of providing sufficient space to accommodate smaller classes and renovate old school buildings. According to USDE, the plan would have provided districts with tax credits to pay down the interest on up to $25 billion worth of school bonds.23

Unfortunately, a similar measure provided California with just over $3 million during the last fiscal year, most of it going to large districts which can more easily endure the spacing crunch.24 The administration’s school construction proposal for the current fiscal year was rejected by the House.25 Perhaps most important, further class-size reductions would exacerbate the serious teacher shortage in the state’s struggling, low-income districts which already have trouble attracting and retaining quality instructors.

The LAO concludes that "further class-size reductions in grades one through three probably is not the best use of the new federal funds in California."26 Governor Davis and a bipartisan California Congressional delegation wrote Secretary Riley requesting a waiver from the class-size reduction plan to use the funds in other areas, claiming the state had already cut class size in the lower grades.27 During a trip to the Golden State in April 1999, Vice President Gore announced the waiver had been approved and the state has since used the money for teacher training and its own separate initiative to cut class size in grade nine.

As part of the budget deal to fund USDE for FY 2000, Congress continued funding for President Clinton’s class-size reduction plan. The administration had asked for $1.4 billion for the program while Republicans were prepared to cede $1.2 billion for the current fiscal year. The two sides split the difference and Congress appropriated $1.3 billion in exchange for two main concessions. First, states can now spend 25 percent of class-size funds on teacher training or teacher testing—up from 15 percent in the last fiscal year. Second, lawmakers and the administration "agreed in principle" to end the controversial Goals 2000 plan when its authorization expires next year.28

Goals 2000, a federal program originally promoted by President Bush, encourages and provides funding to states and local communities to develop high academic standards for their students. As with many federal programs, the specifics of Goals 2000 are less palatable. While the federal government can fulfill a limited role in education, only states should be in the business of adopting standards for their students. In the past, President Clinton has supported plans to come up with a set of national standards, thereby federalizing a role that is rightfully left to the states. Goals 2000 attempts to induce states to adopt the federal program through a variety of incentives.

In FY 1999, California received close to $57.7 million in Goals 2000 funding.29 According to the LAO, the Goals 2000 program has two main components: requiring states to establish specific goals for student learning and ways to measure whether that learning is taking place, and providing funds to local educational agencies to develop plans for meeting the state student achievement goals. The LAO is mildly supportive of Goals 2000, though it acknowledges:

"Taking advantage of the federal framework is not risk free, however. Concerns about federal intrusions into state and local education policy issues have been raised. For instance, while these federal education programs currently call for state-developed standards, some fear that this could could change in the future."30

The LAO goes on to say that ultimately Goals 2000 is a voluntary program, claiming the state could always opt out if federal intrusion becomes a problem. It concedes, however, to opt out California would also have to relinquish the federal money that accompanies the program, "which would not be easy." Overall, the LAO "thinks the value of participating in these programs outweighs the potential risks," without elaborating on what these dangers might entail.31

By providing funding, in California’s case just under $58 million last year, the Clinton administration attempts to use federal dollars to hook states on the program. Once a state has certain programs subsidized by the federal government, it is unlikely it will part with those dollars, even if the nature of the relationship changes. To be fair, only 10 percent of Goals 2000 funding can be used for administrative costs, and the remaining funding for a state the size of California is "quite modest," as the LAO recognizes. California’s own School Improvement Program spent $300 million annually on similar programs in the mid-1990s.

While the federal government does not provide much money under Goals 2000, it requires that states adopt Goals 2000 standards to receive funding for ESEA programs. To receive Title I compensatory money, "states are required to use the standards and assessments developed under Goals 2000 if they are participating in that act."32 Furthermore, to receive Title II grants for teacher development, states must "develop a plan to provide teachers and administrators the skills to help students meet Goals 2000 performance standards." States must also "align teacher training and licensing with Goals 2000 curriculum and performance standards." Local applications for Title II money "must be focused on the training needed to meet Goals 2000 standards."33

Goals 2000 standards also extend to Title VI, which provides funding for districts to develop "innovative education strategies," so long as the eventual plan that is adopted helps districts meet Goals 2000 requirements. Overall, Goals 2000 standards form the basis of ESEA fund disbursement. According to the LAO, "ESEA provides substantial funding to California schools," and thus Goals 2000 has a far larger impact than the funding it directly provides for California. Adopting Goals 2000 standards is the basis for much of the more than $1 billion appropriation the Golden State receives annually through ESEA.

The federal program seeks to coerce states across the country, including California, to adopt its standards in order to receive far greater sums of federal money. Moreover, while Goals 2000 temporarily relies on states to come up with academic standards, the Clinton administration and many in Congress have already supported legislation that would have nationalized standards. As part of the 1994 Goals 2000 law, federal and state governments were charged with working together to develop eight national academic goals in a variety of fields such as math, English, and science. In order to ensure that these goals were met, the Clinton administration proposed setting up a new bureaucracy, the National Standards and Improvement Council. Republicans balked at this idea and supporters backed down.34 If the administration and its allies on Capitol Hill are successful in nationalizing Goals 2000 standards in the future, it is unlikely that states would drop out of a program that is the bedrock for the majority of their federal funding.

 

Unfunded Special Education Mandates

Funding for special education services is often at the center of many education debates. Over the past several years, more and more students and disabilities have been classified under this category. While the state continues to transfer more money to keep up with the rising number of students, the federal government has only made matters worse.

In 1975, Congress passed the Education for All Handicapped Children Act, now known as the Individuals with Disabilities Education Act (IDEA). This legislation is separate from ESEA. The bill’s intent was to ensure that all children with disabilities have access to free and appropriate public education. The legislation also authorized Congress to allocate money for the special education mandates it imposed on states. When the bill was first passed, however, Congress allocated no money to the states to fund these programs. Finally in 1981, it allocated money up to 40 percent of the national per-pupil spending average to be used toward special education costs. Since then, the federal government has paid on average only eight percent of those mandated costs.

California serves the largest population of children with disabilities in the nation; more than 600,000 students receive special education services. The state government will spend approximately $2.2 billion on special education services in 1999-2000.35 In the last fiscal year, Washington only allocated $400 million to the Golden State for special education mandates.36 Furthermore, since IDEA was last re-authorized in 1997, the law’s changes have made it more difficult for private schools with special education students to access federal money. According to Robert Teegarden, Associate Director for Education of the California Catholic Conference, private and parochial schools across the country are only eligible for 10 percent of the federal special education funding they obtained four years ago. Further-more, according to Mr. Teegarden, most non-government schools actually receive even less than the allocation for which they are eligible.37

Complicating matters, California continues to experience one of the fastest growing students populations in the nation. The proportion of disabled students is growing even faster; 1.5 times as fast as the K-12 enrollment in the last decade. Moreover, the costs of serving this subgroup continue to escalate. For example, a recent U.S. Supreme Court decision now forces local school districts to bear financial responsibility for full-time nursing services for disabled students under certain circumstances. Within a week of the decision, a small California school district, Lodi Unified, received a $17,000 bill for one student.38

Federal IDEA mandates have caught the attention of many in the California legislature. A bipartisan group of legislators, including Assemblyman Ted Lempert (D-Palo Alto) and Senator Charles Poochigian (R-Fresno), sponsored Assembly Joint Resolution 12 during the 1999 session. The resolution called on President Clinton and Congress "to provide the full federal share of funding for special education programs to the states so that California and other states will not be required to take funding from other vital state and local programs to fund this underfunded federal mandate."39 Moreover, USDE is currently auditing the CDE’s Office of Special Education Programs for mismanagement of federal special education funds.40

Some on Capitol Hill have argued that the federal government should pay for more of its special education mandates. In April 1999, Senate Majority Leader Trent Lott (R-Mississippi) proposed letting states use the $1.2 billion, meant for cutting class size and hiring 100,000 new teachers, for special education costs instead. Senate Republicans jettisoned Lott’s amendment when Secretary Riley threatened a White House veto.41 The issue did not die, however. During the budget debate for the current fiscal year, President Clinton proposed $5.1 billion in total spending on special education. Republicans raised the ante and the final agreement allocated over $5.75 billion, $700 million more than the previous year, representing the largest single increase in USDE’s budget.42 Of that amount, California will receive approximately $513 million in federal special education funds.43

 

Federal Bilingual Policy: A Pattern of Intrusion

In 1968, Congress passed the Bilingual Education Act, also known as Title VII of ESEA, to provide all students, English-speaking or not, with an equitable education in line with the Civil Rights Act of 1964. Title VII is designed to fund instruction for non-English speaking recent immigrants, limited-English proficient (LEP) students, and to pay for foreign language instruction. Traditionally, the federal government has supported transitional bilingual education programs, which stress native-language instruction and tend to prolong the amount of time LEP students spend in non-English-speaking classrooms.

Across the country, LEP students are disproportionately enrolled in schools with large numbers of low-income children. Currently, 21.6 percent of LEP first-grade students are enrolled in high-poverty schools while only 7.2 percent are in low-poverty schools. Furthermore, LEP students were more than three times as likely to be low achievers than high achievers.44

In 1994-1995, California served just under 40 percent of the country’s LEP students.45 Since that time, the numbers have continued to grow. In 1990-91, there were 2.1 million LEP students nationwide. By 1996-97, that figure stood at 3.5 million students. Currently, Title VII serves 500,000 children across the country.46 Overall, there were 2.6 million children in bilingual education programs nationwide in 1997, with the federal and state governments spending between $12 and $15 billion annually to fund the system.47

Nevertheless, transitional bilingual education has failed Caifornia’s LEP students. The percentage of the state’s LEP students redesignated as having become fluent-English-proficient (FEP) has failed to show much improvement in the 1980s and 1990s. In 1981-82, 15.2 percent of the previous year’s LEP student had been redesignated FEP. By 1998-99, that percentage had stagnated and been cut in half to 7.6 percent.48

A series of court decisions have helped expand the federal role in bilingual education. In 1974, the U.S. Supreme Court ruled in Lau v. Nichols that even if equal facilities and resources are provided to LEP students, more must be done to aid in the acquisition of the English language.49 The Office of Civil Rights (OCR) at USDE took this to mean that districts are forced to offer native language instruction to non-English-speaking students. OCR assembled a series of regulations, the Lau remedies, that force districts to offer instruction in a native language if just 15 students in that particular district speak the language.50

A 1981 federal decision, Castenda v. Pickard, set additional guidelines for bilingual education, requiring that schools must establish specific programs for LEP students, though leaving the methods up to districts. Once again, OCR took an activist approach and forced districts to comply with various orders, including staffing requirements, exit criteria (guidelines by which students move from bilingual to mainstream classes), and program effectiveness. Furthermore, OCR has typically been very aggressive with districts, threatening to cut off funding and, in some instances, to initiate legal action if local authorities do not comply with federal mandates.

In California, federal bilingual policy was shaped by litigation during the early 1980s. The suit, referred to as Comite (named after the litigant in the case), was brought against the CDE at the state level, charging the department was, among other things, insufficiently monitoring districts’ bilingual programs. The suit was eventually settled and, as a result, OCR and state authorities have monitored between 40 and 50 Comite districts periodically over the course of several years to ensure they are complying with California’s Bilingual-Bicultural Act.

However, the Comite settlement is a much more complex affair and a blatant example of the federal government overstepping its bounds. The Bilingual-Bicultural Act sunset in 1987 but nevertheless remains on the books. Moreover, OCR has strong-armed a limited number of districts and forced them to comply with on-site audits of bilingual programs which include monitoring the ratio of LEP students to non-white and non-black students. What empowers OCR to take this course of action remains unclear: neither the settlement nor the expired law specifically mention a role for OCR. Furthermore, the expired Bilingual-Biculutural Act applies to all California districts, not just those monitored by OCR under Comite. Nevertheless, OCR continues to take a hard stance with Comite districts, forcing state and local authorities to pay for costs associated with federal audits.

Federal intrusion into bilingual education has been further complicated with the passage and implementation of California’s Proposition 227, which dramatically alters the manner in which bilingual services are delivered to students. Full implementation of Proposition 227 conflicts with some of the strict bilingual programs that have been developed by OCR and districts. Moreover, the interests and relationships between OCR and California school districts are often opposed to the greater statewide effort to improve and revamp dramatically the delivery of bilingual services.51

 

The Federal Research Role

While ESEA costs approximately $13 billion annually, the federal government spends considerably less on education research. Within USDE, the Office of Educational Research and Improvement (OERI) is the department’s principal research arm with a budget of $938 million for the 1999 fiscal year.52 Federal dollars spent on research should be a vital part of Washington’s limited role in education.

While the states are responsible for developing standards and deciding how education dollars are spent, the federal government should study individual proposals and policies and see how they impact the nation’s students. States could then examine how plans operate in other parts of the country, using federally-funded research to help them. Unfortunately, federal education research does not fill such a role.

According to former OERI Assistant Secretary Christopher T. Cross, "the history of educational research at the federal level is troubled, it never really found its place, and lacks a specific vision and mission." For example, only $143.6 million of OERI’s budget, approximately 15 percent, actually went toward research during the 1999 fiscal year. The rest was spent on a variety of tasks, including providing technical advice to states and districts. Furthermore, education research activities are scattered throughout the government—inside and out of USDE—in a variety of different agencies. During the 1999 fiscal year, $61 million went to 10 regional education laboratories funded by Washington.53 These labs are supposed to study current state and local policies in their region. However, the multitude of federal bureaucracies conducting education research makes it difficult to come up with a coordinated and focused policy.

WestEd is the research laboratory that serves the western states, including California. While the agency publishes several reports annually, it is not clear if the agency’s work, separate from other federal efforts, has any discernible effect or is clearly useful for California schools. Many conservatives, including leading Republican presidential candidate, Texas Governor George W. Bush, have criticized federal labs for producing little valuable work, and have claimed they are often vulnerable to politicization. Another program, the Comprehensive School Reform Demonstration Program (CSRD), also makes up a large portion of the federal research role.

When CSRD was first passed by Congress for the 1998 fiscal year, it made up to $145 million available for state education agencies to implement reforms based on "reliable research and effective practices." Under the plan, as many as 3,000 schools stood to receive $50,000 each, renewable for two years. Title I schools were earmarked $120 million. The legislation authorized USDE to release basic information on up to 44 reform models that schools could use, but since that time the program has yet to yield results.54

In 1998, California received $16.3 million, of which $13.3 million went to Title I schools. The money was to be used for research primarily in mathematics and language arts programs. Interested schools could apply for CSRD grants through their local districts. The districts then handed over the requests to the CDE which made recommendations to the State Board of Education on which schools should receive federal money.55

Unfortunately, the CDE has typically relied on education insiders to come up with reform proposals. For the CSRD program, the department lists several "service providers," such as WestEd, and "comprehensive assistance centers" set up by the CDE, but fails to include providers from the private sector or outside the education world. Very few new or innovative programs have been launched in California as a result of CSRD. Making matters worse, when the state submitted its application for CSRD funding last year, USDE balked and rejected the initial petition. Despite the lack of program effectiveness so far, California received $32.4 billion in CSRD money for the current fiscal year.56 Overall, the federal government has spent millions on education research without clarifying its goals and intentions and, as a result, both Washington and the states have little to show for it.

 

Piecemeal Congressional Reform

Following the 1998 elections, Republicans on Capitol Hill placed education reform at the center of their domestic agenda. Unfortunately, the majority party has made little progress in the ensuing months. President Clinton has had his own agenda, and the budget compromise for FY 2000 left too many long-standing problems unresolved. The fractured relations with the administration have slowed progress on reauthorizing ESEA. Despite the efforts of some lawmakers on Capitol Hill, federal education policy needs more revamping if California is to benefit.

Early in the legislative year, Congress and the White House made some progress. In April 1999, Congress passed an important overhaul bill, the Education Flexibility Act, commonly referred to as Ed-Flex, that President Clinton later signed. The measure, though limited in scope, covers nearly $11 billion in annual spending, and allows governors to seek waivers of federal rules to experiment with their own innovative solutions. Ed-Flex originally began as a 12-state pilot program, but the new legislation expands the plan nationwide.57

Despite moving in the right direction, Ed-Flex does not go far enough in overhauling the federal government’s role in education. As mentioned earlier, Republicans abandoned an amendment authored by Senator Lott that sought to permit states to use $1.2 billion designated for President Clinton’s class-size reduction plan for special education programs instead. Time and time again, the White House has threatened to veto any legislation that does not preserve, in its entirety, the president’s plan to hire 100,000 new teachers.

Some prominent education reformers have criticized Ed-Flex for not going far enough. Nina Shokraii Rees of the Heritage Foundation laments that the proposal falls short in three key areas. First, Ed-Flex waivers are very narrow. She cites a General Accounting Office report that finds Ed-Flex would do little to reduce administrative oversight of federal programs, by neither reducing districts’ financial obligations, providing additional federal dollars, nor streamlining administrative procedures. Second, Ed-Flex does not allow states to consolidate funds from a wide range of federal programs to use on their unique goals and priorities. Ed-Flex only allows flexibility on a limited number of programs, leaving President Clinton’s class-size initiative completely intact.

California has already spent billions on class-size reduction, with little result, and should not have to petition to use the class-size money elsewhere. Governor Davis has already invested state money in reading, teacher quality, and school accountability. Republicans, beginning in Governor Wilson’s administration, have promoted these and other policies, including increased funding for charter schools. Federal funding should be allowed to follow these state priorities, not mandates from Washington. Third, Ed-Flex does not contain strict accountability measures that require states to demonstrate how their own policies improve student performance.58

Rees and others, including Fordham Foundation President Chester E. Finn, Jr., promote more aggressive legislation, coined Super Ed-Flex. Interested states and large school districts could take advantage of Super Ed-Flex, where they could receive maximum flexibility from 18 formula-based ESEA programs in exchange for clear performance objectives where improved student performance is the crucial factor. Those states and districts that improved under the program would be eligible for bonus federal dollars. Also, those states and districts that did not want to consolidate their categorical funding could remain in the newly-reauthorized ESEA program.

Similar legislation, the Academic Achievement for All Act, or Straight A’s, passed the House Education and Workforce Committee in October 1999, allowing states to waive most federal requirements in exchange for strict accountability measures. The bill was brought to the House floor later that month to complement Title I reauthorization. While the original Straight A’s bill would have provided increased flexibility for all 50 states, the eventual legislation, narrowly passed by the full House, limited the plan to a 10-state pilot program in order to gain support from moderates and to avoid a veto. While Straight A’s increased states’ flexibility in using federal dollars and aligned accountability with improved student performance, the limited program fell short in some key areas.

Aside from limiting the plan to 10 states, the eventual legislation failed to eliminate the "hold-harmless" provision that hampers equitable Title I distribution in California and other growing states. Rather than encouraging innovation in the distribution process, the bill continues to mandate that states pass on two-thirds of their Title I funding to districts which have largely failed to improve student performance in California. Again, rather than focusing on outcomes and productivity, Title I distribution continues to focus on inputs and which systems receive how much money. Furthermore, the limited Straight A’s bill fails to empower governors to use federal money effectively. Under the program, in many states, including California, Straight A’s funding flows to heads of education agencies, many of whom are less responsive to reform and innovation than are governors.59

While the watered-down Straight A’s bill was a disappointment, the House missed a greater opportunity when it failed to reform Title I significantly during the recent reauthorization process. To be fair, the House version continues to link Title I distribution with higher standards and increased accountability, a trend begun in 1994. The House version curtails subsidizing teacher aides with federal funds, and creates a bonus pool of money for successful states and districts.60 The House bill also increases Title I funding from approximately $8 billion during the last fiscal year to nearly $10 billion.

Nevertheless, an amendment offered by House Majority Leader Dick Armey (R-Texas) to spend $100 million on scholarships for students in chronically failing public schools to attend private schools was resoundingly rejected, as was a proposal by Representative Tom Petri (R-Wiscon-sin) to limit the scholarships to a 10-state pilot program. In committee, Petri had also offered a portability plan that was rejected.

The House bill does take a limited step to increase school choice in the public sector. Under the bill, children enrolled in low-performing schools, currently about 20 percent of Title I-supported schools, would be able to transfer to another public school in the same district. However, Title I funding would not follow students who transfer.61

Earlier in the year, the House took up some other aspects of ESEA. With the support of 24 Democrats, the House passed the Teacher Empowerment Act (TEA), which would combine three separate categorical programs that states could use for the teacher training and recruitment policies of their choice. Under the new plan, the $335 million Eisenhower Professional Development program for teacher training, the $491 million Goals 2000 plan, and the president’s new class-size reduction program would be consolidated into individual block grants for the states to use on their own, so long as student performance improves. California Congress-man Buck McKeon (R-Santa Clarita) claims that "if the administration weren’t so tied to the 100,000 teachers, we could probably have 95 percent of House members voting for the bill."

However, the bill does not go far enough. States still have to plod through too much paperwork. Districts, not teachers, select development programs, and states still have to use federal money to reduce class size unless they can demonstrate it harms students. While TEA is a step in the right direction, it falls short of meaningful reform. Furthermore, the recent budget deal to continue funding for the president’s plan to hire 100,000 new teachers requires that Congress preserve the program, despite TEA’s intention to fold it into a larger block grant.

Many lawmakers on Capitol Hill and free-market research groups like the Fordham Foundation have criticized existing federal categorical programs for not only failing to boost student performance, but also for handing money out to districts and schools with little accountability. A more aggressive block-grant approach than TEA is needed, one that respects state and local prerogatives on education, while also ensuring that federal money is being spent on programs that work.62

Proposals for Reform

Overall, recent legislative activity on Capitol Hill is a welcome sign. Nevertheless, California and other states require more aggressive reform. In order to make good on their commitment to improve student performance, Congress and the president should enact the following reforms.

• Title I Funding Should Follow Students Directly

Congress has yet to take up the more delicate issue of making Title I funds portable. Since the program’s inception, federal aid to low-income children has been distributed primarily at the district level. While eligible students enrolled in private or parochial schools may receive Title I money, it is not given directly to them in the form of a scholarship. Despite the best of intentions, the existing plan has proved a miserable failure. Academic performance among low-income students has worsened, not improved. While Congress has tried to adopt reforms at the margin, enacting stricter accountability measurements and increasing flexibility, the current law has failed to boost performance, and has instead subsidized thousands of below-par teacher aides in California and around the country. If the public system is unable to improve performance, Title I funds should be distributed to individual students and their families. Over the past 30 years, the federal government has failed to live up to Title I’s basic task: improving the academic lot of the nation’s poor students. The time has come to let families try.

Children and their families could use federal money to purchase school materials, after-school tutoring, summer school, or even use it toward enrollment in private or parochial schools. Individual states would then test these children with the examination of their choice. If performance improves, Title I students would thus be eligible for increased funding. If students’ scores stagnate or worsen, funding would be scaled back and parents would be forced to try a different approach or, in the worst case, return to the traditional program.

Portability specifically helps impoverished children in California. For years, California districts and schools have been short-changed as Title I money has flowed to other states with fewer numbers of poor children. By providing federal funds to children and their parents directly, regardless of the state in which they reside, California would no longer be penalized. The House rejected various portability plans when it took up Title I re-authorization. On the Senate side, lawmakers on both sides of the aisle, including Senators Judd Gregg (R-New Hampshire) and Joseph Lieberman (D-Connecticut), have endorsed different versions of portability legislation. Republican presidential candidates Governor George W. Bush and Steve Forbes have also promoted similar plans.

Governors across the country have endorsed programs turning state money over to low-income families. In Florida, Republican Governor Jeb Bush recently signed the country’s first statewide choice program. If failing districts are unable to improve student performance over two years in any four-year period, state money is handed to the students’ parents directly. While states have increasingly embraced educational choice, the federal government has done very little on the issue. Congress and the president should take their cue from innovative states and pass Title I portability legislation.

• Other Federal Money Should Be Handed Over to Governors in Exchange for Accountability

A recent Fordham Foundation report concluded that all ESEA money (excluding Title I funds) should be given to governors to use in order to complement state efforts. The report identifies four institutions to which federal money could be directed: federal agencies, states, local districts, and parents, concluding that parents and states are the optimal recipients. However, the report is quick to point out that the traditional, failed federal model distributes money to districts and states already. In the past, money at the state level was passed along to state education agencies. Fordham argues that, in the future, funding at the state level should be directed toward governors.63

California would benefit from such a policy change. Millions of federal dollars go through the CDE each year. While most of the funding eventually finds its way to districts and schools, the CDE retains too much money for administrative costs. Furthermore, too many department staffers, whose salaries are paid with federal dollars, are charged with ensuring the state complies with federal guidelines. It is the responsibility of the states to develop their own education goals and priorities. Too much time and money is wasted implementing federal mandates.

Most important, current federal guidelines require California and other states to spend money in certain areas, but rarely ensure that states meet the intended goal of improved student performance. In some instances, that objective is never even mentioned. The adult education funding scandal in the CDE went undetected for years because state officials did not have to tell federal authorities how they were spending taxpayer money. Critics from across the political spectrum have acknowledged that federal policy should be less concerned with inputs, and focused instead on outcomes. By turning significant portions of federal education dollars over to governors and state legislators, while requiring them to demonstrate that funds are being used to improve student performance, lawmakers in Sacramento and other state capitols could decide how federal dollars would best complement ongoing state reforms. If states are meant to direct education policy, federal money should support, not supplant, local priorities.

In many instances, Republicans have supported handing over federal money to states because such a policy would allow innovative GOP governors, like Governor Bush in Florida or Governor Engler in Michigan, to decide how taxpayer money is spent. California, in particular, is forcing Republicans in Washington to put their money where their mouth is. Both houses of the California legislature are controlled by Democrats, as is the governorship. Regardless, Governor Davis and his colleagues in the legislature should be able to use federal money for their own initiatives, provided that student performance improves.

While Ed-Flex accomplishes some of these goals, Congress should enact more aggressive reforms, such as unencumbered Straight A’s legislation. Up to now, President Clinton has threatened to veto any legislation that does not preserve his class-size reduction plan in its entirety. The administration is quick to point to a study in Tennessee that supports moving toward smaller classes. The Tennessee study was also widely touted when California first implemented its class-size reduction efforts. Yet little attention is paid to the fact that, according to the study, class sizes had to shrink to 15 students before the program yielded positive results. Also, benefits were negated when students were placed in classrooms led by teacher aides.64

As already mentioned, a recent state-sponsored study finds that California has spent $4 billion on reducing class size while having little to show for it. If states want to embark on class-size reduction and can prove it benefits students, it is their prerogative. President Clinton’s 100,000 new teachers plan, including the obscure section that cuts off federal funding in most instances after three years, is inconsistent with a limited federal role in education.

Furthermore, Goals 2000 should be eliminated. The plan tries to tie California and other states to a variety of incentives, but any program that moves toward national standards or testing should be avoided. Such a program only adds to an already bloated federal bureaucracy, taking even more money away from the classroom. Developing rigorous academic standards should be the purview of the states. Congress cut Goals 2000 spending for the current fiscal year; California will only receive $47.4 million.65 Lawmakers should go one step further and follow through on their budget promise to eliminate the program next year.

• Provide Full Funding for IDEA Special Education Mandates

When Congress first passed legislation in 1975 requiring districts to absorb special education costs, it pledged to work with them, without saying how much of the bill it would pay. In 1981, Congress promised to fund up to 40 percent of the related costs. Lawmakers on Capitol Hill have failed to live up to their word, paying less than 10 percent annually.

As more and more students have been declared eligible for special education services, California has suffered. State and local education agencies cannot raise extra revenue to fend off spiraling special education costs. In most cases, they are forced to divert money from other areas to make up the difference. The ongoing federal audit of CDE’s management of special education funds highlights another problem. While Washington should pay more of the financial burden, the federal government should also demand that states are accountable for properly handling and distributing special education funding. Furthermore, the current IDEA law should be changed so that students in private and parochial schools receive the same level of special education services as those who attend government schools. Regardless of the school they attend, all eligible children should have the same rights to special education dollars and services.

To be fair, Republicans on Capitol Hill have argued that more federal money should be spent on meeting their special education obligations. The budget for the current fiscal year calls for the federal government to spend close to $6 billion on special education costs. Despite the increase, Congress and the president continue to fall short in funding 40 percent of the expenses associated with IDEA, shifting the costs to states like California. In fact, the White House’s budget only called for just over $5 billion in special education spending, while President Clinton has threatened to veto Republican proposals to allow states greater flexibility in spending federal money on special education services. Nevertheless, Vice President Al Gore has shown more sympathy. During a campaign stop in October 1999, he announced his support for increased special education funding, saying the federal government should move closer to meeting its 40-percent obligation.

While these are improvements, Congress has the duty to live up to its word and fully fund its 40-percent share. Federal mandates are costly impositions upon state and local governments. If Congress requires districts and schools to offer certain services, it should pay for them, not pass the costs along to state governments. At the very least, lawmakers on Capitol Hill should continue to increase funding for special education, while the president must commit to fulfill the federal obligation to fund the mandate before he advances his own priorities.

• End Federal Intrusion Into Bilingual Education

OCR and other federal authorities should leave development and implementation of bilingual programs to the states. Like other sections of ESEA, Title VII funds should be turned over to the states to use for their own purposes, provided that LEP student performance improves. Fund distribution would be based on the number of eligible LEP students in individual states.

Devolving Title VII funds to the states should also be accompanied by dramatic reform of OCR and the Office of Bilingual Education and Minority Languages Affairs. OCR’s activist role in bilingual programs in California and other states is inappropriate and ineffective. Its participation in bilingual affairs should be seriously curtailed, limited to ensuring basic civil rights standards. Furthermore, the cozy relationship between OCR and California districts with high numbers of LEP students has failed to boost academic performance among these children.

Likewise, the Office of Bilingual Education and Minority Languages Affairs has done little to improve LEP student performance. Many of its responsibilities could be turned over to the states, along with Title VII funds. However, USDE should ensure that federal monies are being used to boost academic performance among bilingual students.

The goal of federal bilingual policy should be to ensure that funds are used to move non-native speakers as effectively and quickly as possible into mainstream English-speaking classrooms. To that end, USDE should promote the use of innovative bilingual strategies such as English-immersion programs rather than enforcing strict adherence to native-language instruction. Congress got off to the right start when the House made Title I funding contingent upon giving the parents of LEP students the right to approve the language of instruction for their children. Previously, some Hispanic parents had complained when their children were funneled into bilingual classrooms without their consent.

• Promote Sound Research

So far, lawmakers on Capitol Hill have done relatively little to reform an ineffective federal education research arm. Congress should streamline education research in USDE and consolidate all education research programs under the Office of Educational Research and Improvement (OERI). The number of different agencies and departments at least peripherally involved with research makes it nearly impossible to coordinate and develop policy. OERI should focus its research on evaluating local and state policies. At present, only 15 percent of OERI’s budget is dedicated to such analysis. Furthermore, the regional educational laboratories receive more money than their output warrants. It is unclear that the majority of WestEd’s work is of vital importance in developing education policy at the state and local level in California. Rather than subsidizing a single education laboratory, a significant portion of federal research dollars should be distributed to states so they can contract out for such services.

OERI should also retain an outside board of advisors made up from diverse academic backgrounds in the social and hard sciences, such as mathematics, to review the office’s research, ensuring that it is de-politicized. Objective, peer-reviewed, academic research is in short supply when it comes to education. Too much of what passes as education research relies on anecdotal evidence and has not been rigorously examined and studied by a wide variety of experts and academics across disciplines. The federal government should demand that federal dollars are spent on more scientific research, and allow states greater leeway in using research dollars.

Federal education research should focus on what states and local districts are doing, not promote the agenda of a particular administration or lawmaker. By opening up research to a variety of different perspectives and disciplines, states and local districts can benefit from balanced and in-depth research. In the same way, the Comprehensive School Reform Demonstration Program should be revamped to be an effective vehicle for reform. The opinions of experts outside the field of education should be consulted so that schools might hear from a variety of sources as to how to improve their performance and efficiency.

 

Toward a Proper Federal Role in Education

For the last 35 years, federal education policy has been shaped around giving states and districts money to fund federal priorities. In some instances, such as special education, Congress does not even provide the funding to comply with federal mandates. As a result, federal policy has focused on how much money is spent on how many programs, without grasping the larger picture. In many instances, federal policy has addressed problems that are obsolete, while ignoring more recent and pressing concerns. States have led the way in coming up with innovative solutions to improve student performance. Unfortunately, federal policy has rarely complemented these efforts and, in some instances, has actually conflicted with them, forcing states and districts to spend money on less effective programs.

In states like California, where performance has languished, federal policy has exacerbated problems, by not providing students with their fair share of Title I money and driving up the special education budget. Overall, Washington has not required California to show it is using federal money to improve student performance. Instead, a great deal of federal money goes toward administrative costs and subsidizing staff at the CDE. In short, too little federal money goes toward the intended recipients: children.

This paper’s recommendations broadly outline where federal policy should go in the future.

• Taxpayer money should be made portable; funds should follow students, not failed institutions.

• Federal education policy needs to be reined in, respecting states’ primary role in educating children.

• Whether it is federal money or research, any assistance from Washington should complement state policy, not add another level of priorities. This is the failed model of the past. California and other struggling states require a federal partner, not a parent, to help them improve student performance.

The Senate and House of Representatives have a unique opportunity to transform federal education policy when they take up ESEA reauthorization in 2000. While the process will undoubtedly be linked to election-year politics, it is important that Congress concentrates on two crucial issues.

• The House has already re-authorized Title I. While it increased funding for the program to roughly $10 billion annually, the House failed to alter significantly the delivery of federal funds to low-income children. The Senate cannot leave the current legislation largely intact. Title I contains the bulk of federal funding and regulations. If federal policy is to be improved, this portion of ESEA must be changed.

• The Senate plans on re-authorizing ESEA as one package rather than breaking it up as the House has done. Senator Jim Jeffords (R-Vermont), Chairman of the Senate’s Health, Education, Labor, and Pensions Committee, has tentatively drawn up plans for a new federal preschool/childcare program as part of ESEA reauthorization, while leaving Title I and other significant portions of the legislation largely unchanged. However, childcare funding is already one of the fastest growing categories in federal education spending. For FY 2000, California will receive $1.29 billion for child nutrition, including subsidized school breakfast and lunch programs, and an additional $650 million for child development.66 Rather than pouring more money into programs that Congress already funds, the Senate should focus on improving the existing ESEA law by passing such important reforms as portability legislation.

Federal education policy in the future must be focused on flexibility and choice. Both Republicans and Democrats have increasingly equated rising public interest in education with increased funding. The Golden State provides a case-study in why such a paradigm is outdated. No other state receives as much federal education money as California.

Furthermore, the state government spends well over $30 billion annually on K-12 education. Despite this largesse, educational outcomes in California schools have deteriorated over recent years, particularly among low-income children. Federal policy should be revamped and focused on three general areas:

• allow parents greater discretion with taxpayer money;

• permit greater latitude in how states (preferably governors and legislatures) spend federal funds; and

• focus the larger goal of policy on improved student performance.

For too long, federal regulations and funding have helped stymie education reform in California. Attention here and across the country should be directed to finding a substantive but limited role for the federal government to play. Washington can help by stepping out of the way, while empowering California students, parents, teachers, and policymakers to bypass federal bureaucracy and to improve the state’s schools.