Special Report
Education Funding

K-12 Funds Caught Up in Federal Budget Drama

By Alyson Klein & Christina A. Samuels — December 06, 2010 3 min read
Even as members of Congress scrambled last week to come up with a spending plan to keep the federal government running, the transition continued on Capitol Hill in the wake of November’s elections. In the Rayburn House Office Building, the offices of members defeated in the elections were emptied to make room for their successors.

Cash-strapped states and school districts wondering whether they will see an increase in federal funding this year will likely have to wait a week or more for Congress to complete action on a spending plan for fiscal 2011, which began Oct. 1.

Lawmakers had left Washington for the November midterm elections without completing a number of budget bills, including the one that finances the U.S. Department of Education. Instead, they approved a stop-gap measure, known as a continuing resolution, that financed all programs at fiscal 2010 levels until Dec. 3.

As of late last week, Congress had not yet reached agreement on a new spending bill. In the hope of keeping the government running, the House of Representatives last week passed another bill extending funding for most programs for another two weeks, until Dec. 18. The Senate approved a similar measure late last week.

In separate action in the lame-duck Congress, lawmakers passed a $4.5 billion child-nutrition bill Dec. 2 that would provide the first real increase since the 1970s in the amount that schools are reimbursed for providing lunches.

Currently, states are reimbursed $2.72 for each free school lunch they provide, and that figure is adjusted each year for inflation. The reimbursement rates are lower for lunches sold at full or reduced price. About $1.2 billion of the spending authorized under the legislation would go to addressing childhood hunger, while $3.2 billion would go to efforts to improve the quality of school meals.

The bill offset its costs by removing $2.2 billion from the funding for food stamps, known as the Supplemental Nutrition Assistance Program. Both the food-stamp and school meals programs are run by the U.S. Department of Agriculture.

The School Nutrition Association, which represents food-service directors, applauded the passage of the bill, but said that it opposed using money from food stamps to offset its costs. On the budget front, Democratic leaders—who suffered a major setback in the midterm elections, losing their party’s majority in the House—now have a few options.

They could pass a year-long continuing resolution, extending all federal funding at fiscal 2010 levels until the end of fiscal 2011 next Sept. 30. They could pass another stop-gap measure, extending funding until the new, more conservative Congress convenes in January.

Or—as many education advocates hope—they could use the extra time to reach agreement on a large budget bill that would finance most of the federal government for fiscal 2011.

If Congress extends funding at fiscal 2010 levels for all programs until next fall, school officials won’t see a bump in funding for special education or the Title I program, which helps educate disadvantaged students.

Administration Priorities

Major priorities of the Obama administration also hang in the balance, including extension of the Race to the Top program, which rewards states for embracing certain education redesign goals, and the Investing in Innovation, or i3, program, which is intended to scale up promising practices by districts and nonprofit organizations.

Both programs were created under the American Recovery and Reinvestment Act, which was approved in February 2009 and covered fiscal years 2009 and 2010. But the programs weren’t part of the regular fiscal 2010 budget, so they wouldn’t be financed under a stop-gap measure.

The best hope for continuing those programs beyond the money already committed to them would likely to be a huge budget bill, advocates say. The administration asked for $1.35 billion to continue the Race to the Top for an additional year and allow districts to compete for the money. Advocates for early-childhood education were also keeping their fingers crossed that Congress could find money in a broad spending bill for a new, $300 million program that would help states improve early-learning programs. The Senate Appropriations Committee included the program in the bill it approved this past summer.

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