Special Report

First Education Stimulus Aid Flows to States

By Stephen Sawchuk & Erik W. Robelen — April 01, 2009 9 min read
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The first of $44 billion in economic-stimulus aid for education began flowing out to states last week—along with new teacher-quality reporting requirements for states and districts, and significantly more spending flexibility on school construction than many administrators had expected.

New guidance from the U.S. Department of Education spells out in more detail how states, districts, and institutions of higher education will receive money under the $39.8 billion State Fiscal Stabilization Fund and the $8.8 billion Government Services Fund, as well as how they may use it.

Secretary of Education Arne Duncan, who unveiled the first payments at a school in Capitol Heights, Md., emphasized that the funding could be a once-in-a-lifetime phenomenon. “We have this magical opportunity to invest significantly in these best practices and scale up what works,” he said of aid under the American Recovery and Reinvestment Act.

U.S. Secretary of Education Arne Duncan visits a school in Capitol Heights, Md., to announce the first round of economic-stimulus aid for education, $44 billion accompanied by detailed guidelines on its use.

But the requirements outlined by the department mark a foray by the federal government into several areas that have mainly been the province of states and districts—notably teacher evaluation and the shape of data systems.

As part of the teacher-quality assurance states must fulfill to receive fiscal-stabilization money, for instance, the department plans to demand that states report for each district the number and percentage of teachers and principals scoring at each performance level on local teacher- and principal-evaluation instruments.

Once districts have received their stabilization funds and used them to backfill cuts, the guidance allows districts to spend their remaining funds on a host of activities, including new school construction. Republican lawmakers had opposed funding for school construction during the drafting of the $787 billion stimulus package, which President Barack Obama signed into law in February.

Lever for Reform?

The combination of new requirements and funding-flexibility language adds to ongoing debates in policy circles about whether some $100 billion in new education money—the largest single federal investment in education in history—will lead to fundamental reform in the nation’s education system or have the opposite effect of ossifying current features that may hinder improvement. (The law also provides an additional $15 billion to help students and families pay for higher education.)

“[School construction] has the potential to eat up a lot of these funds, particularly for states that don’t have severe funding shortages,” said Vic Klatt, a lobbyist with the Washington firm Van Scoyoc Associates, who previously served as the staff director for Republicans on the House education committee. “People who are hoping a lot of this money will go for education reform activities may be a little disappointed.”

U.S. Secretary of Education Arne Duncan, left, and Maryland Gov. Martin O’Malley read New Tricks I Can Do! to a 1st grade class at Doswell E. Brooks Elementary in Capitol Heights, Md., on April 1, after the secretary announced the release of $44 billion in education stimulus funding.

In a letter and detailed guidance sent to the states April 1, Mr. Duncan laid out the Education Department’s marker for the four education reform “assurances” states must address as a condition of receiving stimulus funding.

The assurances focus on improving teacher quality, strengthening standards and assessments, turning around low-performing schools, and enhancing data systems.

To receive their second cut of stabilization funds later this year, states must document, among other things, that they will be capable of reporting:

• Whether they use student- achievement information in their local teacher- and principal-evaluation systems, and a breakdown of performance on those instruments;

• Whether the state has a cap restricting the number of charter schools currently operating, and the number closed within the past three years for academic reasons;

• The number and percentage of high school graduates, by school, who complete one year’s worth of college credit within two years;

• The number of schools in the “restructuring” phase of academic improvement under the No Child Left Behind Act that have demonstrated improvement, closed, or been consolidated; and

• Progress on instituting the core elements of a data system capable of tracking students from preschool through college.

Thomas Toch, a co-director of the Washington-based think tank Education Sector, who wrote a paper last year on teacher evaluation, praised the new teacher-evaluation reporting proposal.

“I think it’s a really important step,” he said. “I think we’re seeing an increase in attention to teacher evaluation in reform discussions at the district, state, and now the federal level, and that’s a good thing.”

Mr. Toch said that most evaluation systems around the country are superficial and not finely tuned to make distinctions about teachers’ performance.

“What will happen is an overwhelming majority of teachers will be reported to be adequate or have satisfactory ratings. That in and of itself may shine a spotlight,” he said. “In an urban district, if 30 percent of your schools are not [meeting testing benchmarks] and ... all your teachers are doing well on your evaluations, that’s going to be embarrassing.”

The president of the 1.4 million-member American Federation of Teachers, Randi Weingarten, said she hoped the reporting would encourage stakeholders to craft more-nuanced evaluation systems in collaboration with teachers, through collective bargaining agreements. She added, though, that she had concerns about whether districts and states might take the data out of context.

“Ultimately, if data is used to make sound judgments, that’s a good thing,” she said. “If data is used in a way that is rudimentary or unfair or gets you to conclusions that are not warranted, if it becomes another ‘gotcha’ tool, that will be bad, ... but I think it’s too soon to tell.”

The guidance also expands upon Mr. Duncan’s call for data systems that can identify students who are at risk of failing and areas that need improvement Such systems must, for example, be able to connect student-achievement data to individual teachers, and track students from high school through college.

Both of those priorities could pose challenges: Teachers’ unions have successfully lobbied legislatures to outlaw teacher-student data linkages in states such as California, while other states prohibit the sharing of data across systems for privacy reasons.

The metrics proposed in Mr. Duncan’s letter will be subject to the public rulemaking process, but the Education Department will have the final say over their shape.

An ‘Epic’ Loophole?

The guidance also offers states and districts more flexibility than anticipated to use fiscal-stabilization money that remains after they have backfilled instructional cuts on school construction.

During the drafting of the stimulus package, Republicans in Congress successfully stripped a proposal on new-school construction from the bill. The completed bill permitted districts to undertake modernization and repairs.

But the stimulus guidance says districts may spend recovery funds on any activities authorized under nclb—including the federal impact-aid program, which authorizes funds for building new schools.

The low-profile program is normally used only to subsidize districts whose local tax bases are affected by the presence of military installations or other federal property.

In an April 1 conference call with reporters, Secretary Duncan said the interpretation offers districts the flexibility to work on construction projects that fit local needs.

“There’s a need there—there’s a need to do renovation and rehabilitation,” he said. “You have areas that are significantly overcrowded, and children jammed into buildings. That doesn’t work.”

Republican officials, not surprisingly, protested the interpretation.

“This is a loophole of epic proportions,” said Alexa Marrero, a spokeswoman for Rep. Howard P. “Buck” McKeon of California, the ranking Republican on the House Education and Labor Committee. “By funneling funding through the impact-aid program, it appears that states will be able to completely circumvent congressional intent and spend tens of billions in taxpayers’ money on virtually anything—including new school construction, something Congress deliberately did not allow for in the legislation.”

But Mary Kusler, the assistant director of government relations for the American Association of School Administrators, based in Arlington, Va., predicted that few districts would use the money for construction of new schools, given other pressing needs.

“I just don’t think there’s enough money,” she said.

Even so, activities under impact aid are so broadly defined that the Obama administration’s decision to permit funds to follow that program could curb other school improvement priorities.

The guidance, for example, acknowledges that districts can use the impact-aid authority to pay down past debt, although it encourages them to spend it to advance reforms, such as providing extended learning time for low-income schools and expanding the number of seats in publicly funded early-childhood education.

State Discretion Clarified

The guidance resolves one issue that potentially could have pit state institutions against one another: It clarifies that a state may not restore its funding support for only K-12 or higher education, and that a governor may not retain any portion of the money for state purposes.

And it makes clear that a state may not limit how a local district uses its share of the stimulus money.

In a statement, Rep. George Miller, D-Calif., the chairman of the House education committee, praised those clarifications.

“While states allocate the funds, it should be up to local school districts and colleges and universities to decide how to use this emergency aid, not states,” the statement released by his office says.

Last month, Rep. Miller and other House Democrats from California wrote a letter to Gov. Arnold Schwarzenegger, a Republican, and state education officials urging them to release the fiscal-stabilization funds to school districts as soon as the state receives them.

But Charles Barone, the director of federal policy for Democrats for Education Reform, a New York City-based political action committee, argues that by giving states no authority over how districts spend money in the stabilization fund, the federal Education Department severely constrains its own objectives.

“There’s not much there to hang reform on,” he said. “How can you be a governor and try to pursue a statewide policy when none of the districts have to go along with you?”

States do have discretion in deciding how to spend money in the $8.8 billion Government Services Fund, which can be used for “public safety and other government services,” including assistance for K-12 or higher education, as well as to support administrative costs associated with implementing reporting requirements.

As a final request to states to use their funding wisely, Mr. Duncan repeatedly said in his conference call with reporters that any states playing “shell games” with stimulus spending would disqualify themselves for future funding. He singled out the $4.35 billion in discretionary money he has dubbed the “Race to the Top” fund.

Mr. Duncan said the first competition for that money, which is meant to scale up innovative programs in states and districts, will be held in June. Applicants will have to show demonstrable progress in all four of the assurance areas to receive the incentive funding.

“This is not a menu; this is not, ‘I’ll take two out of three,’?” the secretary said. “These are states that are pushing the envelope in all four areas.”

Staff Writer Dakarai I. Aarons contributed to this report.
A version of this article appeared in the April 08, 2009 edition of Education Week


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