Letter to the Montana Office of Public Instruction — Reasonable Level of Tolerance (January 26, 2024)

Summary

A letter dated January 26, 2024 from the U.S. Department of Education to Elsie Arntzen, Superintendent, of the Montana Office of Public Instruction. It responds to Montana's written plan for a reasonable level of tolerance in calculating State maintenance of equity under the American Rescue Plan Act of 2021 for fiscal year 2023. For districts with an average number belonging between 11 and 500, the plan proposes a 10 percent year-to-year reduction in per-pupil funding, which would affect 21 districts serving 0.8 percent of Montana's students. For exceptionally small districts with 10 or fewer, only one funding stream would be used, affecting another 18 districts serving 0.097 percent. The Department determines the proposal is reasonable.

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Full text

                      UNITED STATES DEPARTMENT OF EDUCATION


                                       January 26, 2024

The Honorable Elsie Arntzen
Superintendent
Montana Office of Public Instruction
P.O. Box 202501
Helena, MT 59620

Dear Superintendent Arntzen:

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

The ARP Act 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 OPI, Montana’s school funding system involves two
categories of funding: (1) funds allocated based on daily enrollment or “average number
belonging” (ANB) and (2) funds allocated on a non-ANB basis. OPI asserts that calculated per-
pupil funding amounts for its small LEAs are significantly affected by small fluctuations in
enrollment. This makes annual per-pupil funding amounts in Montana’s small LEAs an
imperfect indicator of whether the SEA has achieved the intent of maintaining equity in funding
across LEAs.

For LEAs with an ANB between 11 and 500, OPI proposes to implement a tolerance of a 10
percent reduction in per-pupil funding from year to year on both the ANB- and non-ANB-based
allocations. For FY 2023, this proposal would impact 21 LEAs identified by the State as meeting
the definition of high-need or highest-poverty that served 0.8 percent of Montana’s students. In
addition, OPI proposes a category of “exceptionally small LEAs”—those with an ANB of 10 or
fewer. For these exceptionally small LEAs, OPI proposes to use only the ANB funding stream
for purposes of State maintenance of equity calculations. For FY 2023, this would impact
another 18 LEAs identified by the State as meeting the definition of high-need or highest-poverty
that served 0.097 percent of Montana’s students.

After reviewing OPI’s tolerance proposal and accompanying data, the unique circumstances in
the State, and our further State-specific analysis, we have determined that OPI’s tolerance
proposal includes a reasonable level of tolerance when calculating whether Montana has
maintained equity for small LEAs in FY 2023.

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

                                                  Sincerely,
Laura Jimenez
                                                  Laura Jimenez

                                                  Laura Jimenez
                                                  Director, Office of State and Grantee Relations


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