Special Report

Dual Aims in Stimulus Stir Tension

By Alyson Klein — June 09, 2009 8 min read
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The education aid of up to $100 billion in the American Recovery and Reinvestment Act has always had two purposes: to help cash-strapped states weather the current economic storm, and to prod states to pursue broad-based improvements to education.

Now that the federal economic-stimulus money is beginning to flow to states, it’s clear that the still-bleak economy is heightening the tension between those goals.

In a number of states, including several with ambitious school reform plans on the shelf, massive deficits threaten to swallow a hefty portion of the stimulus aid, leaving less money for sweeping improvement efforts.

Even in states where the fiscal outlook is brighter, districts are reluctant to create new programs or hire new staff members because most of the stimulus funding is for one time only.

Now, at least one key author of the legislation is asking U.S. Secretary of Education Arne Duncan—a strong advocate of using the stimulus aid as a policy lever in such areas as academic standards and teacher distribution—to dial back his expectations for how much fundamental change can be bought with the money.

Schools “face a devastating storm just in terms of economic conditions,” U.S. Rep. David R. Obey, D-Wis., the chairman of the House Appropriations Committee and its subcommittee on education funding, told Mr. Duncan last week. “It’s legitimate to question whether it’s realistic to ask them to also implement dramatic new reforms. I don’t want to set them up for failure in the public eye because they can’t do two things at once.” (“Key Democrats Poke at Education Budget Plan,” this issue.)

K-12 Spending: No Guarantees

Even when stimulus aid is included, 21 states expect K-12 spending to drop in fiscal 2010 compared with this year. Others predict stimulus money will help swell school spending in the coming year.


SOURCE: Center on Reinventing Public Education

Still, some states and districts see the potential to use the stimulus aid for smaller-scale changes, or to save proven programs that otherwise would have been cut.

State officials also say they’ve been prodded into action by the possibility of qualifying for a piece of Mr. Duncan’s $4.35 billion Race to the Top discretionary fund, which is intended to reward districts poised to develop comprehensive reform plans. ("$5 Billion Pot of Money Draws Plenty of Interest, Raises Some Eyebrows,” Feb. 25, 2009.)

For his part, Secretary Duncan doesn’t seem to be backing away from the goals he initially outlined. He urged all education leaders to use the economic crisis and stimulus resources to help spur bold action.

“How much a state is hurting is going to vary by degrees,” Mr. Duncan said at a news conference on May 29. “That’s not the issue. The issue is how much courage they have, how much ability to innovate, and how much [they see] this as a chance to do something very, very different.”

Program Preservation

It may be unrealistic to expect that many states and districts will be able to make substantial changes with the money from the $48.6 billion State Fiscal Stabilization Fund, which makes up nearly half the education funding in the $787 billion stimulus package and is intended primarily to restore cuts, said Charles Barone, the director of federal policy for Democrats for Education Reform.

Advice Offered on Spending School Stimulus Aid

Education leaders and school finance experts from the district, state, and national levels discuss how money from the federal economic-stimulus package can be used to advance school improvement during a recent Education Week Leadership Forum on “Powering Through the Recession.”

“The stabilization fund is pretty much a wash,” given the dire condition of most states’ budgets, said Mr. Barone, whose group, a political action committee, is based in New York City.

The stabilization money is being allocated on the basis of a state’s population, not by how much it has cut education.

But states and districts may be able to do quite a lot with the $10 billion in additional money for Title I grants for districts and $11.3 billion in special education funding in fiscal 2009 and 2010, along with other pots of stimulus money, Mr. Barone said.

“I don’t think it’s credible that there’s nothing that they can do for two years,” he said.

Some district officials in states hit hard by the recession disagree. They say there’s going to be little money left over for new investments, although they’re grateful for the chance to save jobs and programs.

For instance, Dennis Coe, the superintendent of the 2,800-student Henry County school district in southeastern Alabama, had originally anticipated 35 staff reductions out of 350 employees districtwide.

But, because of the stimulus funding, including the Title I and state stabilization dollars, he was able to reduce that number to 10. The money also allowed the district to sustain an after-school credit-recovery program for high school students that otherwise would have been scrapped.

“We may be limited in the things we can do” for education reform, Mr. Coe said. “But [the money] helped us to keep from completely cutting programs.”

Racing to the Top

Mr. Barone’s assessment of the possibilities even amid states’ urgent budget needs seems to be a good description, however, of the situation in Colorado.

Vallas Previews Plans for ‘Race to Top’ Funding

Louisiana Recovery School District Superintendent Paul G. Vallas talks about his plans for a competitive grant he is hoping to receive under the federal economic-stimulus package during a recent Education Week Leadership Forum on “Powering Through the Recession.”

It’s likely that the bulk of the stabilization funding there will go to backfill cuts, so the state is looking to other pots of stimulus money to advance its reform objectives, said Nina Lopez, a special assistant to Dwight D. Jones, the commissioner of education.

For instance, Gov. Bill Ritter, a Democrat, may use his portion of the $8.7 billion in discretionary funding under the state stabilization fund—which can also go to public safety and other purposes—to help pay for new education initiatives.

Potential uses could include developing better data systems, creating a state-level teacher-incentive program, and advancing dropout-prevention efforts, Ms. Lopez said.

Colorado is hoping to snag a portion of the money in the Race to the Top program, and just planning for that possibility has helped spark discussion, she said.

“Secretary Duncan, or whoever’s brainchild it was, did a really smart thing by sticking some dollars out there,” she said. “The promise or the potential [of those dollars] forces folks to have some conversations we might not otherwise have.”

Similarly, education advocates in Delaware, which faces an $800 million deficit in a statewide budget of $3.2 billion, expect that the budget situation means districts will likely use their share of the state stabilization money to backfill cuts.

“By no means am I saying everything is going to come up with roses with this money, but goodness knows where we’d be if we did not have it,” said Lillian Lowery, the state secretary of education.

Over the past several years, Delaware’s business community, union leaders, and education officials have been working on a school improvement plan that includes many of the policies championed by the U.S. Department of Education, including rigorous standards and expanded prekindergarten.

Paul A. Herdman, the president of the Rodel Foundation of Delaware, a Wilmington-based nonprofit organization that has helped lead the effort, is hoping the state will receive some Race to the Top money to advance those goals.

In the meantime, a portion of the Title I and special education money could be used for improvement efforts, Ms. Lowery said. She is encouraging districts to consider offering professional development and expanding after-school programs, two uses of the funding endorsed by the federal Education Department.

Still, Ms Lowery is dissuading districts from spending heavily on new programs or significant hiring with the federal dollars because of the likelihood that the money will dry up after two years.

“What we cannot do is hire a lot of new people or [develop] many new programs at all, knowing in two years that falls off a cliff,” Ms. Lowery said.

Reluctant to Hire

Even officials in states able to direct a substantial share of their of state stabilization aid to new initiatives, rather than to make up for cuts, are moving carefully.

Like Ms. Lowery of Delaware, T. Kenneth James, the commissioner of education in Arkansas, dissuaded his local superintendents from taking on new employees whose jobs couldn’t be sustained after the money dries up in two years.

“We’re encouraging districts not to use the money for extensive staffing purposes,” said Mr. James, who is stepping down the end of this month. And one of the other uses of stimulus funding most frequently suggested by the federal Education Department—extending the school day—would be too costly, even with the infusion of cash, he said.

Instead, he’s instructing districts to consider developing or expanding after-school and summer school programs, or to purchase technology.

Gary Compton, the superintendent of the 12,555 Bentonville, Ark., school district, is heeding Mr. James’ advice. His district will receive money from the fiscal-stabilization fund, plus Title I and special education money, for a total of about $5.4 million in extra federal funding on top of its $110 million annual budget.

The Bentonville district is going to use a large portion of the stimulus aid for a major professional-development initiative for teachers. It also will furnish all of its classrooms with new technology, including an overhead projector, a computer interactive whiteboard, and a student-responder system. The responder devices will help teachers get instant feedback from their pupils during lessons, Mr. Compton said.

While Mr. Compton is grateful for the largess, it’s been a challenge to work under the program’s timeline, he said.

“Under normal circumstances, I would spend a year in curricular study and research-implementation strategies” in deciding how to invest $5.4 million, he said. “We’re doing all this in a month. It’s just very different from the way we normally do business.”

And he’s worried that if the extra money doesn’t produce a significant shift in student outcomes nationwide, proponents of increased federal education funding will lose credibility.

“I can hear Chester Finn now,” Mr. Compton said, referring to the president of the Thomas B. Fordham Institute in Washington, who is skeptical that more money for schools will lead to better student outcomes. “ ‘We gave public education $100 billion and have ACT scores gone up? Have we closed the divide between rich and poor kids?’ … That’s always your biggest fear, that this will be just fuel for that fire.”

Coverage of the American Recovery and Reinvestment Act is supported in part by a grant from the William and Flora Hewlett Foundation.
A version of this article appeared in the June 10, 2009 edition of Education Week as Dual Aims In Stimulus Stir Tension


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