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Education Funding

Is Stimulus Money Being Spent Equitably?

By Michele McNeil — February 09, 2010 2 min read

I’m at a two-day symposium in New York City put on by the Campaign for Educational Equity (and sponsored by Teachers College, Columbia University) that’s examining whether the stimulus funds have been spent and used equitably to help improve achievement, especially among at-risk students.

Sam Dillon did a piece previewing the papers being presented, in which he focused on the funding cliff that the stimulus is creating. Since we’ve already written a lot about the funding cliff, I thought the more interesting part of these papers, and the symposium itself, was the warning flags being raised about some of the long-term consequences of the stimulus package.

Although I’ll have a more complete story soon, here’s what I’m talking about:

  • Since the stimulus law required roughly $48 billion in State Fiscal Stabilization Funds to be distributed through a state’s primary funding formula, the “maintenance of effort” provision that required a state to maintain its own funding only applied to this formula. But this ignores the fact that in many states, there are smaller categorical funds that make up total state aid, but aren’t given out to school districts by a formula. This paper, by David Sciarra and Danielle Farrie of the Education Law Center and Bruce Baker of Rutgers University, points out that in Pennsylvania, for example, only 57 percent of funds are driven through the “primary” formula. What does this mean? States tended to avoid cuts in their primary formulas to meet federal requirements, but may have slashed the heck out of other programs--programs that could be targeting low-income, minority, and other at-risk children.
  • Because of a quirk in the federal Individuals with Disabilities Education Act, and we’ve written about this issue some, too, states are able to lower their own funding levels for special education by certain amounts because of the increase in new federal aid. What does this mean going forward? States will have a lower funding base they’ll be required to meet, which will likely mean less state aid for special education once the stimulus funding runs out. You can read more about this, and other issues, in this paper by Jessica Wolff and Daniel Yaverbaum of the Campaign for Educational Equity.
  • And, as several papers point out, states used an influx of Title I funds to expand services to more at-risk students--essentially lowering the poverty threshold so more students became eligible. That seems great, but there’s a downside, too. Once the stimulus funding runs out, either they’ll have to take services away from those new Title I kids, or spread existing resources more thinly across more kids. That’s a dilemma.
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