Stimulus Debate Raises Issues Involving K-12 Funds

The sheer scale of the new education aid envisioned under the economic-stimulus package now pending in Congress is forcing educators and state officials to consider how they would absorb that funding and how it could transform—or distort—school programs at the local level.

Officials from governors’ mansions on down are generally pleased at the prospect of billions of extra dollars for K-12 programs, early education, school construction, and other priorities.

The size of that bonanza remains somewhat in flux. Today, the U.S. Senate is considering a compromise proposal from a bipartisan group of lawmakers that would trim some $50 billion in education spending out of the bill passed by the Senate Appropriations Committee. Among other changes, it would remove $16 billion in school construction funding and significantly reduce aid to help shore up state budgets.

Still, the slimmed down proposal—which, if passed, would still have to be reconciled with the House version—would provide some $80 billion for education programs, well over the U.S. Department of Education’s current $59.2 billion discretionary budget for education programs.

The debates in the U.S. Senate and House of Representatives over the broad funding levels and specific components of such a plan highlight fundamental issues involving management and accountability; “maintenance of effort” by the states in paying for education; and the question of whether the increased federal spending can, or should, be sustained.

“You wonder if it’s really sunk in,” Vic Klatt, a former aide to Republicans on the House education committee, said of proposed increases. “I absolutely think this redefines the federal role [in education]. Not in all bad ways, but in ways that haven’t been fully thought through.”

Jack Jennings, the president of the Washington-based Center on Education Policy, said such a substantial injection of aid could pave the way for the federal government to think more expansively about its role in improving struggling schools.

“It not only makes it more legitimate for the federal government to ask for accountability, it also [opens up] the question of what should the feds be doing to help schools,” said Mr. Jennings, who spent nearly three decades as an aide to House Democrats on Capitol Hill.

But during floor debate in the Senate last week on its version of a measure passed earlier by the House, Sen. John Kyl, R-Ariz., warned against pumping money into education programs that he said are in need of a careful reworking to have a greater impact on student progress.

“There is an opportunity here to really do some good,” said Sen. Kyl. “Rather than just throw more money at a problem, why don’t we take advantage of the opportunity to really do something to reform it?”

Supporters of the package argued that legislation needed to be crafted and approved quickly to help school districts avert severe cuts in staff and programs.

“The economic-recovery bill should not be the vehicle for reauthorizing the No Child Left Behind Act,” Sen. Tom Harkin, D-Iowa, the chairman of the Senate appropriations subcommittee that deals with education, said in a statement sent to Education Week. “It would be foolhardy, not to mention politically impossible, to try to enact major education reforms” in a few weeks’ time, he said.

And districts also believe speed is of the essence, said Mary Kusler, the assistant director of government relations for the American Association of School Administrators, based in Arlington, Va.

“The reality is that school districts are in a position right now with nowhere else to turn to prevent them from cutting hundreds of thousands of staff positions and programs,” she said. “We see this [stimulus plan] as an overdue recognition of the role that our schools play in the overall economy.”

States Hurting

Supporters of including education in the stimulus package argue that direct aid to the states for K-12 programs will help the recession-battered economy in part by staving off layoffs and other steps at a time when states face crushing deficits.

Last week, a new report by the Denver-based National Conference of State Legislatures tallied cumulative state deficits over the next year and a half at $134 billion—a number that’s sure to climb if the economy continues to deteriorate. That’s on top of the $40 billion in cuts states have made this budget year.

President Barack Obama has made clear that he considers education funding a crucial piece of the economic-recovery package that is his top domestic priority.

The stimulus measure “will provide billions of dollars to build schools and help with school construction,” the president said at a school visit last week. “And it will also give [U.S. Secretary of Education Arne] Duncan the resources he needs to reward excellent, innovative schools.”

But not everyone is convinced that pouring extra funds into programs such as Head Start, special education, and college Pell Grants will give a needed jolt to the economy.

“These are all programs with merit. I have supported them all. ... But the question is: Do they stimulate the economy? How?” asked Sen. Thad Cochran of Mississippi, the top Republican on the Senate Appropriations Committee, in floor debate on the proposal. “Is it realistic to expect funding levels for these programs to revert to today’s levels once the economy recovers? I think it is safe to expect just the opposite.”

Debates to Come

Those debates are likely to shape discussions on the House-Senate conference version of the legislation, which was expected to be crafted the week of Feb. 9, pending final passage of a Senate bill. The bills in both chambers contain different spending levels for education that would have to be reconciled in a conference committee.

Although the House and Senate bills both provided at least $120 billion for education, lawmakers as of late last week, were discussing reducing that proposed increase by roughly $50 billion.

The House bill, which passed Jan. 28 with no GOP votes, would provide a $79 billion “stabilization” fund, most of which would be intended to help states put schools and colleges on a firmer financial footing.

It would also increase spending by $13 billion each on the two main federal programs in K-12 education, special education and Title I grants for disadvantaged students, to be spread over fiscal years 2009 and 2010.

In addition, the House measure would provide $15 billion in incentive grants to reward states, districts, and nonprofit organizations that boosted student progress. The bill would give Secretary Duncan wide latitude in distributing the money.

Late last week, a group of moderate lawmakers on both sides of the aisle worked to refocus the overall package on programs that they deemed would provide an immediate economic stimulus—and scale back proposed education funding increases. Their agreement would change some of the funding levels for education programs, but still provides nearly $90 billion for education.

The agreement, introduced late Friday night by Sens. Ben Nelson, D-Neb., and Susan Collins, R-Main, wouldn’t change the $13 billion in spending originally proposed for special education. It would provide $1 billion for education technology, the same level as in the original Senate measure. And it would reduce the $13 billion initially slated for Title I just slightly, to $12.4 billion.

The compromise agreement would eliminate the entire $16 billion in school construction grants, but would leave in place bonds that help finance school construction.

The original bill included a state fiscal stabilization fund which would have provided $79 billion, mostly in relief to local districts. The compromise would shrink the fund to $39 billion. That would include $26.7 billion to local school districts and public colleges and universities, to be distributed through existing state and federal formulas; $7.5 billion to states as incentive grants as a reward for meeting certain education performance measures; and $9.5 billion in flexible aid to states that could be used for education, but also for other pressing needs, such as public safety

There are some other changes from the Senate’s original bill. The amendment would provide $1.05 billion for Head Start, reduced from $2 billion in the Senate’s original bill, and $50 million for teacher quality state grants, reduced from $100 million.

On Friday, the prospect of a scaled-back education aid package drew very different reactions within the education community.

“We’re obviously very upset about the proposed cut,” said Randall Moody, the chief lobbyist for the National Education Association before the compromise was announced. “We think the education part of the package is the crucial part because it will save jobs and put people back to work. We don’t understand how they can look at school construction, Head Start, and special education and say those aren’t stimulative.”

Once the compromise proposal was reached, Mr. Moody said his organization would be supporting passage of the leaner bill, but would work with leaders in both chambers to restore education funding in conference.

But Frederick M. Hess, the director of education policy studies at the American Enterprise Institute in Washington, said in an interview before the agreement was announced that the likely remaining increases would leave school districts little room to complain.

“When districts are talking about enormous pain and damage, it’s either level funding or they’re being dialed back to [2005 and 2006] funding levels,” he said. “That was hardly the dark ages.”

State Responsibilities

There are also some important differences in the way the two bills handle state spending.

Under the House bill, the Title I money would be subject to the maintenance-of-effort provisions already in law, which require states to keep up past funding levels so as not to use federal aid simply to replace some of their own spending. And, in order to make use of the money available under the stabilization fund, states would have to maintain their education funding at fiscal 2006 levels.

But the Senate language would allow the U.S. secretary of education to waive maintenance-of-effort provisions for the Title I money, special education funding, and other education programs during fiscal years 2009 and 2010 only.

That would let states and districts in dire financial straits use the stimulus funding to pay for programs and salaries that typically have been financed using local and state dollars.

The move was necessary to ensure that financially strapped school districts would be eligible for the funds, Democratic congressional staff aides said.

Anne Bryant, the executive director of the National School Boards Association, said she would like the federal Education Department to have wide latitude to grant waivers for the maintenance-of-efforts requirements.

“This money is about keeping teachers, keeping bus drivers, keeping nurses,” Ms. Bryant said.

But other advocates are worried that the potential waiver could mean a cut in state education funding down the line, and they prefer the more restrictive House language.

“How do you get the state to replace the dollar that they’ve converted to a federal dollar? That leaves a big problem at the end of this,” said Amy Wilkins, a vice president of the Education Trust.

Assistant Editor Michele McNeil contributed to this story.