Published Online: June 30, 2009
Published in Print: July 15, 2009, as Stimulus Tensions Simmer
Updated: April 4, 2012
Includes correction(s): April 4, 2012

Stimulus Tensions Simmer

States and School Districts in Delicate Dance on Funds

The American Recovery and Reinvestment Act is clear: States are on the hook for advancing education improvement goals spelled out in the law as a condition for receiving up to $100 billion in economic-stimulus aid to education.

But school districts are the ones that must decide how to spend most of that aid—including hefty, one-time increases for Title I and special education funding—and tensions already are starting to emerge.

Take the Phillipsburg, N.J., school district, for example.

The 3,500-student system had hoped to use roughly $150,000 in special education stimulus funds for technology to better track students’ records, including individualized education programs, and to keep better tabs on students’ nutritional choices in the school lunch program, among other uses.

But the state, which had final approval over the use of that money, rejected the district’s proposal because it didn’t seem clear that all of the proposal would benefit special education students, said Beth Auerswald, a spokeswoman for the New Jersey Department of Education.

Phillipsburg is permitted to reapply for the special education funding later in the year. But William A. Bauer, the district’s business manager, said he could have used clearer guidance from the state about what it was looking for.

“They gave us vague, open-ended kinds of definitions of what they would accept,” Mr. Bauer said. “We thought we were within the parameters, but apparently we weren’t.”

Conflicting Visions

A beefed-up role for states in advancing student outcomes was part of the design of the ARRA, said Jack Jennings, the president of the Center on Education Policy, a research and advocacy organization based in Washington.

But some friction is to be expected as the money makes its way to states and trickles down to districts, said Mr. Jennings, who served as an aide to Democrats on the House Education and Labor Committee for nearly three decades.

“I expect to see tension all along the line,” he said. “The U.S. Education Department is calling for major improvements, and states are saying, ‘We want reform, but we want to save jobs, and local school districts are saying they want to save jobs.’ ”

The stimulus aid to education—allocated mainly for fiscal stabilization, special education, and to help disadvantaged students—is being doled out to districts through a number of existing formulas that give states varying levels of control over how it is spent.

The largest pot, the $48.6 billion for education in the State Fiscal Stabilization Fund, is being allocated primarily through each state’s school funding formula.

Special education and Title I aid for the disadvantaged follow existing federal formulas for such assistance. But states must approve districts’ plans for the roughly $10 billion in Title I money and $11.3 billion in special education state grants available under the stimulus.

And, in hopes of enhancing their shot at some of the $4.35 billion in competitive Race to the Top Fund grants under the stimulus program, some states are helping districts figure out how best to target the Title I and special education funds to advance student achievement goals.

Striking a Balance

States can—and have—turned down applications, said Sandra Abrevaya, a spokeswoman for U.S. Secretary of Education Arne Duncan. The Phillipsburg, N.J., application is one example.

“[The department] encourages states to engage with districts [on their plans] and evaluate them closely,” Ms. Abrevaya said.

Jim Rex, the state superintendent of education in South Carolina, said he thinks the ARRA does a good job balancing state and district authority. The state is responsible for“making sure there’s creativity, transparency, and some accountability, but shouldn’t be making decisions about how every dollar is spent, he said.

Even so, Mr. Rex, who communicates with each of his superintendents on a monthly basis, has a wish list of what he’d like to see done with the aid. For example, he’is encouraging districts to spend stimulus funding on laptops for low-income students and on expanded public school choice, including opening new Montessori schools and offering more single-gender classes.

In Colorado, the state education agency is urging districts to consider using some of their education dollars in tandem with other pots of funding available under the stimulus, such as the Temporary Assistance for Needy Families program. And the agency is providing materials and offering advice, including holding webinars, on some uses officials hope districts will adopt, such as expanded early- childhood education.

“The state cannot, and historically has not been able to, dictate every aspect of how local districts use dollars,” said Nina Lopez, a special assistant to Dwight D. Jones, the commissioner of education.

But she added that, while some things may be accomplished faster and more easily “if we could just dictate it, changes are more likely to stick if they are enacted cooperatively. When you tell someone what to do, they don’t feel like they have an investment in it.”

Officials in some states say they wish the legislation and its accompanying guidance had given states much greater leverage—and resources—to provide assistance to districts and to move the needle on school improvement goals.

“I pushed from the start in meetings with federal officials for an interpretation [of the stimulus] that makes it clear that states could exercise a pretty strong hand within the parameters of the law for the use of the funds, to make sure the funds weren’t swallowed up by existing programs,” said Mitchell Chester, the commissioner of education in Massachusetts.

At least one recession-battered school district in the Bay State is wondering how it will balance Mr. Chester’s expectations against tight fiscal constraints.

Paul Dakin, the superintendent of the 6,100-student Revere school district, a high-poverty district just north of Boston, said he would like to take Mr. Chester’s suggestions to use about half of his stimulus funding to invest in programs that could have a long-term impact on student achievement. But, right now, he isn’t sure where the money is going to come from.

Mr. Dakin had originally planned on using a portion of the Title I funding to train teachers on a reading program that he has piloted in one of his elementary schools, with good results. But that was before budget pressures forced him to cut staff members, including 31 paraprofessionals. He also let two teaching spots and other positions go unfilled.

The Revere superintendent appreciates the spirit of Mr. Chester’s “sound advice,” on splitting the money roughly evenly between salvaging existing staff and programs and new investments. But “there are unique problems” in his district, he said, and he may have to seek some leeway.

“I will try to have a conversation with the commissioner so he can give me ... advice on what they would like us to cut” in order to preserve the plan for long-term investments, Mr. Dakin said. “I’m to the point where I can’t find anything anymore.”

Technical Assistance

State officials are sympathetic. They worry that the complicated nature of the stimulus package—and a lack of dedicated resources at the state level—may put a strain on personnel.

Capacity has been a chronic concern for states already tasked with school improvement and administrative requirements underthe No Child Left Behind Act. The recession has only added to that pressure, with many state education departments suffering budget cuts, further squeezing their ability to assist school districts. ("Hard Times Hit Schools," Aug. 27, 2008.)

“There’s no money for any staff at our level,” said Betsy Carpentier, the deputy superintendent for innovation and support in South Carolina. “People who are already overworked are going to be even more overworked.”

Similarly, Judy Jeffrey, the director of the Iowa Department of Education, said she could use more resources to coordinate improvement efforts and to help districts.

“I absolutely understand that people wanted the money to go to the local districts, but at the same time, it does take resources to continually support and improve teaching in the state,” she said.

The U.S. Department of Education may be contemplating a regulatory change that would allow states to use more stimulus resources to help with those tasks. The department indicated that it may issue new regulations on just how much Title I and special education money states can hold back for administrative purposes.

But some advocates for districts hope there won’t be a major shift.

States can already use a portion of their discretionary stimulus dollars under the State Fiscal Stabilization Fund to help provide support and oversight of districts’ plans, said Mary Kusler, the assistant director of government relations for the American Association of School Administrators, in Arlington, Va.

Allowing states to use a greater share of Title I and special education money for administrative purposes, she said, “sets a bad precedent for how much money can be diverted from direct services for kids.”

Vol. 28, Issue 36, Pages 1,20-21

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Correction: 
A previous version of this article misstated the amount of money that states could receive in economic-stimulus aid to education. Up to $100 billion in aid could be received.

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