While budget woes increase at the state and local level Congress has acted on two fronts in recent days which have implications for state and local education budgets.
In the midst of the health care debate, Congress recently finalized the Fiscal Year 2010 spending bill. The House-Senate Conference Committee reached agreement to spend nearly $64 Billion which represents a 2% increase over FY 2009. The Obama administration did not get everything it wanted in the compromise. It provides $14.5 billion for Title I grants. The administration wanted to divert $1.5 billion from Title I and would have added $1 billion to fund Title I School Improvement Grants. Instead it is funded at $546 million.
One priority of the administration and a favorite of Rep. George Miller, Chair of HELP (Health Education, Labor and Pension Committee) received a huge boost, the so-called Teacher Incentive Fund which will receive $400 million – a far cry from the $97 million funding, but less than the $487 million requested. These monies provide grants to fund “Pay for Performance” experiments. The merit pay debate has been with us for over four decades, but has gained in popularity on the national stage after having been adopted by the administration as a potential vehicle to increase teacher effectiveness. In spite of a considerable body of evidence to the contrary, the belief is that teachers will see the prospect of cash bonuses as the incentive they need to dramatically raise student achievement. (see “Study: Texas’ teacher merit pay program hasn’t boosted student performance”)
The budget for charter schools increased by $40 million to $256 million, but once again $12 less than the administration had requested.
In addition to drastic shortfalls in the current fiscal year, (see previous post) a time bomb created by the stimulus funds – the so-called “cliff ” that states inevitably will confront when the stimulus monies dry up in 2011 – is still looming on the horizon. This week the House filed and adopted by a narrow margin a Jobs bill which diverts unused TARP money to job creation and infrastructure needs. The Jobs for Main Street Act of 2010 creates an “Education Jobs Fund” as well as a pot of money for School Renovation Grants
Education Jobs Fund: $23 billion for an Education Jobs Fund to help States support an estimated 250,000 education jobs over the next two years. 95% of the funds will be allocated by States to school districts and public institutions of higher education to retain or create jobs to provide educational services and to modernize, renovate, and repair public education facilities. The remaining 5% of funds is reserved for State education-related jobs and administration of the Education Jobs Fund.
School Renovation Grants: $4.1 billion to allow State, local, or tribal governments to receive a federal grant equal to the cost of tax credits that would otherwise be payable on bonds issued to finance school construction, rehabilitation or repair.
The Senate will take up the Jobs legislation after the holidays.
Thank goodness for the $400 Billion Teacher Incentive Fund, a substantial increase from the $97 million funding.
Another article that I saw mentioned the situation caused by states and districts using federal stimulus money to avoid layoffs at schools this past September that is going to create potential salary account shortfalls next fall. What was the phrase that many districts seem to have ignored, “Supplement Not Supplant” that some of us heard.
The article went on to say that our neighbor, New York, “will see a $2 billion shortfall after stimulus money ends in 2011-12, and that could drive up some of the nation’s highest local property taxes another 8 percent, according to the analysis by state Comptroller Thomas DiNapoli.”
“This isn’t just a New York problem,” DiNapoli said in an early and detailed analysis of school aid after federal stimulus funds run out in 2011-12. “Other states across the country will face a similar dilemma if they used stimulus money to plug budget holes instead of paying for one-time expenses.
Looks like some forgot that “Stimulus funding is not a recurring revenue; it shouldn’t be used for recurring expenses.”