North Dakota — United States Department of Education to the Honorable Kirsten Baesler (January 26, 2024)

Summary

This is a letter dated January 26, 2024 from the Office of Elementary and Secondary Education at the United States Department of Education to Kirsten Baesler, State Superintendent at the North Dakota Department of Public Instruction (NDDPI). The letter states that the Department received NDDPI's plan for a reasonable level of tolerance when calculating whether North Dakota met State maintenance of equity requirements in fiscal year (FY) 2023 for a subset of its local educational agencies. It describes NDDPI's proposal of three tolerance levels: a 60 percent reduction in per-pupil funding for districts with 10 or fewer students, 25 percent for districts with 11 to 1,000 students, and 15 percent for districts with 1,001 to 2,000 students. It states that the Department found tiers 1 and 2 reasonable and does not find Tier 3 to be a reasonable level of tolerance.

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Full text

                      UNITED STATES DEPARTMENT OF EDUCATION


                                        January 26, 2024

The Honorable Kirsten Baesler
State Superintendent
North Dakota Department of Public Instruction
600 East Boulevard Ave., Dept. 201
Bismarck, ND 58505

Dear Superintendent Baesler:

The U.S. Department of Education (Department) received your plan for a reasonable level of
tolerance when calculating whether the North Dakota Department of Public Instruction
(NDDPI) has met State maintenance of equity requirements in fiscal year (FY) 2023 under the
American Rescue Plan Act of 2021 (ARP Act). This written plan applies only to a subset of
North Dakota’s local educational agencies (LEAs).

The ARP Act’s State maintenance of equity requirements help ensure that State funding supports
LEAs with high concentrations of poverty and students who have been subject to longstanding
opportunity gaps in our education system and experienced the greatest impact from the COVID-
19 pandemic. These requirements are vital for ensuring that States maintain funding to address
the impact of the pandemic on students’ education, and for protecting students in high-need and
highest-poverty LEAs from disproportionate cuts if reductions in State effort do occur.

The Department determined that it is consistent with the State maintenance of equity
requirements to allow a State educational agency (SEA) to calculate whether it has maintained
funding equity with respect to its very small high-need and highest-poverty LEAs within a
reasonable “tolerance level.” The Department’s determination is based on the possibility of
significant volatility in the calculated per-pupil funding amounts for very small LEAs caused by
small changes in student enrollment, which may be unrelated to whether an SEA has achieved
the intent of the requirements. (See Frequently Asked Questions, American Rescue Plan
Elementary and Secondary School Emergency Relief Program, Maintenance of Equity
Requirements, July 26, 2022, Question 21(a).)

According to materials provided by NDDPI, North Dakota’s State funding formula, set bi-
annually by the legislature, is supplemented with an enrollment-driven formula to account for
districts with specific characteristics. NDDPI asserts that calculated per-pupil funding amounts
for its very small LEAs are significantly affected by small changes in attendance rates. This
makes annual per-pupil funding amounts in North Dakota’s very small LEAs an imperfect
indicator of whether the SEA has achieved the intent of maintaining equity in funding across
LEAs.

Accordingly, NDDPI proposes three tolerance levels:
   • Tier 1: For districts with 10 or fewer students, NDDPI proposes to tolerate a 60 percent
      reduction in per-pupil funding, year to year. For FY 2023, this would impact one very
        small LEA identified by the State as meeting the definition of high-need or highest-
        poverty that served 0.008 percent of North Dakota’s students.
   •    Tier 2: For districts with 11 to 1,000 students, NDDPI proposes to tolerate a 25 percent
        reduction in per-pupil funding, year to year. For FY 2023, this would impact 44 LEAs
        identified by the State as meeting the definition of high-need or highest-poverty that
        served 8.57 percent of North Dakota’s students.
   •    Tier 3: For districts with 1,001 to 2,000 students, NDDPI proposes to tolerate a
        15 percent reduction in per-pupil funding, year to year. For FY 2023, this would impact
        two LEAs identified by the State as meeting the definition of high-need or highest-
        poverty that served 2.57 percent of North Dakota’s students.

After reviewing NDDPI’s tolerance proposal and accompanying data, the unique circumstances
in the State, and our further State-specific analysis, we have determined that tiers 1 and 2 are
reasonable levels of tolerance when calculating whether North Dakota has maintained equity for
small LEAs in FY 2023. We do not find Tier 3, as proposed by NDDPI, to be a reasonable level
of tolerance as it is unclear how changes in enrollments in LEAs of this size would contribute to
the large reduction in per-pupil funding compared to LEAs with many fewer students.

Based on data provided by NDDPI, North Dakota will need to make additional payments to
LEAs that experienced disproportionate reductions in per-pupil funding in FY 2023. Please
advise the Department when these additional payments have been made.

We appreciate your diligence in developing this proposal. If you have any questions, please
contact your program officer at: NorthDakota.OESE@ed.gov.

                                                   Sincerely,

                                                   Laura Jimenez

Laura                                              Laura Jimenez
                                                   Director, Office of State and Grantee Relations


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