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Stimulus Aid Saved Education Jobs, Research Group Concludes

By Alyson Klein — July 18, 2012 2 min read
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The federal economic-stimulus program’s $100 billion in education aid largely met its goals of preserving or creating K-12 jobs and jump-starting education-redesign efforts at the state level, according to a new study from the Center on Education Policy, a research organization in Washington.

A series of surveys by the CEP looked at the impact of the American Recovery and Reinvestment Act, passed in 2009, which poured emergency aid into the states to help alleviate the effects of the Great Recession and wound up giving K-12 education its biggest windfall ever. The ARRA was followed by the $10 billion Education Jobs Fund, which was created in the summer of 2010.

The CEP surveys found that 52 percent of school districts with funding cuts were able to make up for them using money from the $48.5 billion State Fiscal Stabilization Fund, the part of the stimulus most closely focused on saving jobs and offsetting local reductions. And, in another 45 percent of those districts, the federal dollars helped patch at least some budget holes.

Most districts—69 percent—used State Fiscal Stabilization Fund money to save or create jobs. The stimulus also provided new, one-time money for the two main federal formula programs—Title I grants to help disadvantaged students, and special education state grants. Districts used some of that money for job-saving purposes, too, CEP found. The money was a one-time infusion that has been phased out overtime.

But that didn’t mean there were no layoffs. In fact, during the 2010-11 school year, about 85 percent of districts with budget decreases cut staff positions, including teacher jobs, the study found. And in the 2011-12 school year, 61 percent of districts with budget decreases cut jobs.

Districts were also cognizant of the one-time nature of the stimulus funds. Two-thirds said that was a big influence on how they spent the money. Secretary of Education Arne Duncan suggested districts invest the money into one-time programs that could yield big long term gains, such as professional development.

The education portion of the stimulus was billed as more than just a jobs program—it was supposed to help states and districts embrace new reforms. And, CEP found that the funding did help states come together on a shared education-redesign agenda, focused on the four main goals of the ARRA’S education funding (improving state systems, turning around low-performing schools, beefing up standards and assessments, and bolstering teacher quality).

Twenty states told CEP that the stimulus accelerated the pace of reform in their state, and 18 said it broadened the scope of their education redesign priorities.

But a lot of states have stumbled when it comes to implementing that agenda, according to the CEP analysis, in part because, despite the big federal cash bump, state education agencies didn’t see much of an increase in their own resources. Plus, now that the federal tide of cash has receded, some states and districts are putting off implementation of reforms.

Five out of the 17 states that told CEP they’d experienced funding decreases in fiscal year 2011 also said they were postponing reforms. And, last year, two-thirds of the districts that said they had made funding cuts said they were slowing down their education redesign efforts.

The CEP findings are based on surveys the organization conducted of states and districts between December 2009 and February 2012. Check out CEP’s other stimulus reports here.