Special Report

Jobs Money Flowing, but Not Smoothly

By Alyson Klein — September 10, 2010 3 min read
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Federal money from the $10 billion Education Jobs Fund is headed to state coffers—but not without what appear to be some initial implementation wrinkles and controversies.

Charter school advocates, for example, have voiced dismay that some charters may have a tough time tapping into the fund meant to help prevent the layoff of teachers and other education workers.

Texas, meanwhile, had its application for $830 million in school jobs money rejected by the U.S. Department of Education—potentially slowing down disbursement of the money—after state officials balked at a provision in the federal law that requires Texas to make additional assurances about how its schools will be funded for the next three years. The state was asked to resubmit its application, though the rejection drew the ire of Republican Gov. Rick Perry, who urged the department “to find legally appropriate ways to deliver these funds to Texas schools this year.”

New Guidance

Governors had until Sept. 9 to apply for a share of the $10 billion in education jobs money approved by Congress last month, with the money set to roll out within weeks of application. As of last week, more than 20 states had received approval. Should a governor fail to submit an approvable application, the money would be distributed through an alternative method, though Education Department guidance said receipt by school districts would be “substantially delayed.”

The charter school issue stems from the fact that some charter school teachers are employees of a charter-management organization or an educational management organization, not of a school district.

Under updated guidance released by the Education Department on Sept. 1, charters that contract with management organizations wouldn’t be able to use the education jobs funds to pay teachers who are technically employees of those organizations, but work as teachers in charter schools.

“There’s a lot of head scratching,” said Brooks Garber, the vice president for federal advocacy at the Washington-based National Alliance for Public Charter Schools. He said that more than 1,000 charters contract with management organizations, so a “large number of kids” could potentially be affected. In Michigan, for example, 80 percent of charter schools contract with such organizations, particularly for human-resources purposes, such as hiring teachers and other employees to work directly with students.

The Education Department guidance doesn’t apply to all charter schools. Charters that are considered to be their own school district are eligible for the jobs funding, and can use it in the same way that school districts can—to pay employees, provide benefits, or hire new teachers. Charters that are part of another district also can receive the funds and use the money the same way other schools in the district can.

Charters that don’t have any of their own employees—including those that contract with a charter-management organization—could use the money to hire new employees. That means a charter that gets most of its employees through a management organization could technically “hire” a teacher it already has on staff.

That worries advocates who keep a watchful eye on charter autonomy, including Gary G. Naeyaert, a spokesman for the Michigan Association of Public School Academies.

“If that’s the bitter pill we have to swallow to use the money, some schools will and some schools won’t,” he said. For instance, hiring teachers that usually are contracted through a management organization would force charter schools in Michigan to put those employees in the state’s “bloated” pension system, Mr. Naeyaert said, which some charters would prefer not to do.

The Texas impasse stems from an amendment to the federal education jobs measure by U.S. Rep. Lloyd Doggett, D-Texas, that required Texas to maintain at least level education spending for at least three years to receive a portion of the federal money. The congressman said in a statement that he was trying to ensure the state spends “new education dollars on education purposes.”

Texas Impasse

In response to the Education Department’s rejection of Texas’ request for federal funding, state officials did not say specifically if they would reapply for the $830 million. Gov. Perry has argued that the state’s law and constitution forbid him from applying for funds that would force the state to commit to specific amounts of education funding in future years.

And in a Sept. 9 letter to the department, Texas Education Agency Commissioner Robert Scott suggested that the earliest that the state would reapply for the funds would be next July. Mr. Scott asked the federal Education Department to ensure that the $830 million “would be reserved for Texas” until next year, if the state resubmitted its application then.

Assistant Editor Sean Cavanagh contributed to this story. The Associated Press also contributed to this story.
A version of this article appeared in the September 15, 2010 edition of Education Week as Jobs Money Flows, Amid Some Initial Kinks


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