Arizona school leaders say they were blindsided by decision to withhold funding for low-income students

Arizona public schools are bracing for significant cuts to funding for low-income students after school leaders say they were blindsided by an Arizona Department of Education decision announced earlier this month.

Some staff positions are now in limbo, and districts say they have begun canceling programs, including summer school.

On March 7, the Education Department notified school leaders that it would reduce preliminary federal aid payments designated for low-income students by 20%, though department officials said they have been warning of impending cuts for months. Final funding amounts are subject to how the federal government divides these dollars among the states, but preliminary payments allow schools to start hiring personnel and making other plans.

Department officials said the decision to withhold 20% of funds is precautionary. If they overcommit to funding now, they might have to claw back money once federal officials finalize a spending plan.

Nonetheless, educators have condemned the decision and are calling for an investigation. They say the announcement has already forced them to make cuts under the assumption no additional funding will come.

"As they continue to kick the can with these funds, that means that the money that is needed to help impact student achievement isn't available early enough to make a difference," said Arredondo Elementary School Principal Alison Bruening-Hamati.

Before moving to her current role in the Tempe Elementary School District, Bruening-Hamati was Coolidge Unified School District's director for Title I, the federal program that provides supplemental funding for schools serving many students from low-income households.

"At schools, we try to protect kids from grown-up decisions," Bruening-Hamati said. "There's just no way this cut won't impact kids."

Tom Horne: Arizona schools may face cuts because of demographics

The federal government issues Title I funding to support schools with high percentages of low-income families, and state education departments disburse those funds to qualifying schools.

There are also other federal funds distributed through what are called "Title" programs that are slated by Arizona's Education Department for 20% cuts. These programs support teacher training, English language learner programs, educational technology, creating opportunities for a well-rounded education, student health and safety and college and career guidance programs.

President Joe Biden recently signed a bill into law that will keep federal funding for these programs in line with last year. Arizona Department of Education officials said that although this might seem promising, there is still reason to believe cuts are coming for Arizona's public schools based on demographics relative to other states.

U.S. Census Bureau data shows Arizona's share of the nation's people living in poverty is down by about 6.9% this year. A state's relative poverty is a primary indicator of how federal funds are distributed across the country, though the federal government also considers other factors in its formula for funding these programs.

The Arizona Department of Education cited this decrease in poverty as a driving force behind its conservative estimate.

"We raised concerns that the federal budget has smaller increases than recent years and Arizona's percentage of people in lower incomes has dropped almost seven percent," Superintendent of Public Instruction Tom Horne said in a statement to The Arizona Republic. "Both of those factors can lower the total amount of federal dollars sent to Arizona. A smaller preliminary allocation ensures that schools will not be overpaid" when actual dollar figures are known.

Six states and Washington, D.C., saw a greater percent decrease in relative poverty than Arizona. Even so, Georgia, which had a 12.84% decrease in its share of the nation's people in poverty, and Nevada, with a 6.97% decrease, do not anticipate any cuts to their funding, according to spokespeople with those states' education departments.

Representatives of the education departments in Maine and New Hampshire, which also outpace Arizona's decrease in the national poverty share, said it is too early to release preliminary allocations.

"Never in 15 years have I heard of ADE cutting 20% straight on a preliminary allocation. It's absurd," Bruening-Hamati said.

In a typical year, the Education Department plans for a 10% reduction until the federal budget is finalized, according to Bruening-Hamati and department officials.

This year, the department withheld the usual 10% as a baseline, then subtracted another 7% to adjust for the decrease in relative poverty. The department withheld an additional 3% to provide extra cushion, according to department officials.

"The department acts as the fiscal agent for these funds," Horne said. "We will fully allocate these funds as soon as the U.S. Department of Education determines the total award for the state."

Arizona schools begin making cuts for 2024-25 school year

Districts have started adjusting their plans according to the anticipated funding shortfall.

A reading program at Arredondo Elementary School might exclude kindergartners, Bruening-Hamati said, and transportation to the before- and after-school programs might drop routes.

The timing of the Education Department's announcement has complicated a tricky financial moment for schools. Millions of federal pandemic relief dollars will dry up this year, meaning districts are scrambling to accommodate two big budget cuts.

What's more, schools use the spring and summer to extend contract offers to staff, some of whose positions are funded through federal Title program allocations. Financial uncertainty caused by the Education Department's announcement is putting districts that rely on those dollars between a rock and a hard place, said Paul Tighe, executive director of Arizona School Administrators, a nonprofit that supports school leaders.

"If they issue the contracts and have significant grant funding cuts, they will have a financial problem," Tighe said. "If they delay issuing contracts, they will lose many of those staff to other districts amid the current teacher and staff shortages."

The state's largest teachers union, the Arizona Education Association, has received complaints from across the state as members fear their positions could be cut, said spokesperson Emily Kirkland.

"It just doesn't make any sense to us, and it is extremely alarming," Kirkland said.

Washington Elementary School District stands to lose $2.2 million, district governing board member Kyle Clayton said. District leaders have visited schools in recent weeks to plan financial adjustments, he said.

Most of Washington Elementary's 33 schools receive Title funding. One of those schools planned to add a staff member.

"That has been scrapped, so that could mean larger class sizes for the other two classrooms or less small group intervention," Clayton said.

Cartwright Elementary School District, which has 20 schools, canceled its summer school programming, district spokesperson Victor Hugo Rodriguez said. If the 20% cut holds, the district would lose about $2 million, he said.

Rodriguez said his district crafted its budget as if it would receive the same Title program funding as this school year and had planned about $800,000 for summer school. Cartwright Elementary also uses Title funds for free meals, field trips, career readiness programming and staffing.

Rodriguez said district officials are drafting letters to U.S. representatives urging them to investigate the matter.

"It's been very frustrating, and we're going to do our best to balance everything out," Rodriguez said. "Hopefully, we'll be able to get to the bottom of this."

Reach the reporter nicholas.sullivan@gannett.com.

This article originally appeared on Arizona Republic: Arizona schools scramble after state withholds poverty funds