Published Online: April 17, 2012
Published in Print: April 17, 2012, as Slow Pace for Race to Top Spending

Sluggish Pace for Race to Top Spending

Almost two years into the federal Race to the Top program, states are spending their shares of the $4 billion prize at a snail's pace—a reflection of the challenges the 12 winners face as they try to get ambitious education improvement plans off the ground.

Through the end of March, the 11 states and the District of Columbia had spent just 14 percent of their Race to the Top money, with New York, Rhode Island, and Hawaii spending the least as the midpoint of the four-year grants approaches, an Education Week analysis of federal spending reports shows.

And so far, the reports show, the bulk of the early money that states have spent outside their own education departments—which are still reeling from severe budget cuts prompted by the recession—has gone to consultants.

The U.S. Department of Education was concerned enough about slow spending that it highlighted the problem in its first annual report on the Race to the Top, which was released in January. Florida, for example, was criticized for yearlong delays in hiring contractors to execute its Race to the Top work.

But Ann Whalen, the Education Department's director of policy and implementation, said Florida and other states are picking up momentum.

"Across all of the states, there are ongoing challenges with state procurement processes and with finding the right talent to fill positions," Ms. Whalen said. "In terms of actually meeting deliverables and being on track with ultimate outcomes, we're not worried."

Sluggish Start

In 2010, after a high-profile state competition that would become the signature education initiative of the Obama administration, the federal Education Department awarded $4 billion to 12 winners for their plans to improve K-12 education in their states.

The program's first-year spending pace was slow as states struggled to hire people and find vendors to help carry out their plans.

Grant Spending

Nearly two years into a four-year grant, Race to the Top states have spent their money very slowly—even in Delaware and Tennessee, which won their grants five months before the other 10. Altogether, the 12 winners have spent less than 15 percent of the $4 billion that they won in 2010.

New York state, for example, planned to spend $151 million in the first year to get its projects off the ground, but instead spent just under $1.5 million. Hawaii, which has encountered so many implementation problems with its $75 million grant that federal officials have placed restrictions on its grant, spent just 6 percent of its first-year budget.

But there are reasons besides implementation woes that help explain the slow rate of spending.

First, there is a lag between when spending decisions are made at the state level and when funds are actually drawn down from the federal department. For example, a state might enter into a contract for $5 million, but not have to pay the contractor the full amount right away.

Meanwhile, Delaware and Tennessee, the only winners in the first round of grant awards, got a five-month head start on other states in first-year projects.

Finally, states crafted their Race to the Top budgets based on estimates of costs for contracts, programs, and personnel. In many cases, the price tags are turning out to be lower than states had originally thought.

Deliberate planning and slow hiring kept New York's spending down at first; the state has spent about $76 million of its $700 million award so far. But within the next two months, its spending will jump to nearly $304 million, according to Tom Dunn, a spokesman for the state education department.

That major escalation in Race to the Top spending in New York comes as the state awards grants to districts to implement new teacher- and principal-effectiveness policies and a mentoring program for new teachers in low-performing schools.

The state is also issuing a slew of contracts, including for English/language arts and math curricular materials for elementary grades and professional-development for teachers in science, technology, engineering, and math.

"We are definitely at speed and continuing to accelerate," Mr. Dunn said.

Budget Shifts

States can't make significant changes to their Race to the Top budgets on their own. Any changes by a recipient in grant spending of more than $500,000 must be approved by the Education Department as part of its official amendment process.

The number of delays and budget shifts are lengthy and affect all the Race to the Top winners.

Rhode Island, for example, is shifting $1.5 million in spending to the final two years of its grant for a training program for principals in turnaround schools.

In North Carolina, contracting delays for a professional-development initiative meant shifting $3.1 million from its first-year budget to years two through four.

And the District of Columbia pushed back the spending of $1 million on contracts for a data system to support its student-growth accountability measure.

The winners have four years to use the money from the time their grants were awarded, but can ask for a one-year extension that the Education Department would consider on a case-by-case basis.

The difficulties Race to the Top states face in delivering on their improvement agendas reflect a problem across state education departments: Budget cuts have strained most of those agencies.

A February study by the Washington-based Center on Education Policy found that many of the states that responded to a survey—including several Race to the Top states—don't have the staff or fiscal resources to carry out changes around teacher evaluations, data systems, low-performing schools, and common standards begun in the time of recent federal economic-stimulus aid. Such aid includes the Race to the Top grants.

Cost of Experts

Those constraints are likely why so much early Race to the Top spending outside state departments of education is to buy expertise.

Through the end of 2011, Tennessee, which won $500 million, reported spending about $2 million on consultants from Vanderbilt University, in Nashville; Seattle-based Education First Consulting; and the U.S. Education Delivery Institute, in Washington, to help with implementation and evaluation of Race to the Top programs, according to more-detailed spending reports filed with the federal government.

Since the Race to the Top is funded through the 2009 economic-stimulus package, detailed reporting requirements exist that are separate from what the Education Department also requires.

Related Blog

In the same time period, Florida, which won $700 million, reported hiring Rockville, Md.-based Westat; the American Institutes for Research, in Washington; Tallahassee Community College; Florida Atlantic University; and the Florida Association of District School Superintendents for consulting services, worth nearly $4.2 million.

But spending is just one way to evaluate states' Race to the Top progress. The Center for American Progress, a Washington think tank that last month issued an evaluation of this program, counted spending as one of six indicators and weighted more heavily such factors as whether a state had retained the support of key stakeholders.

With those additional factors, New York state, for example, came out as doing well despite slow spending. Hawaii and Florida fared the worst.

"We thought spending was a good way to look at momentum. You have to spend money to start making things happen," said Ulrich Boser, a senior fellow at the center who wrote the report.

But Mr. Boser cautioned about looking at spending alone. "I don't necessarily see there being a problem," he said of the slow start for spending. "If you do a lot of planning on the front end, then you could reasonably argue that's a better way to do it."

Vol. 31, Issue 28, Pages 1,21

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