This report recommends a new poverty indicator to use when distributing Disadvantaged Pupil Impact Aid (DPIA) to Ohio school districts. It also describes the implications of substituting the new indicator in the current formulas used to calculate DPIA funding. Ohio school districts receive DPIA, based on earlier aid programs, to provide all-day kindergarten, to reduce class size, and to provide safety, security, and remediation programs. Traditionally, program funding was based on the percentage of students from families whose incomes were at or below the poverty line, but in the mid-1970s the program was expanded to include smaller city and rural school districts. More stringent welfare program requirements and impending time limits have caused enrollment in Ohio's cash assistance program to become less reflective of the actual number of families living in poverty. Two new indicators were considered worth study: enrollment in medical programs and enrollment in four public assistance program areas. The latter was found to be the better indicator of poverty because it most accurately captures the number of children from poor families and it is relatively stable over time. The new indicator was compared to enrollment in case assistance and medical programs. The finding was that more children would be identified, more districts would be eligible for DPIA, and the overall cost to the state would increase. This report recommends adoption of this new indicator for funding purposes. Five appendixes contain a description of DPIA categories, a bibliography, a list of possible poverty indicators, calculations of DPIA, and the calculations and procedures used in the report. (Contains 28 references.) (SLD)