Special Report

Study: Schools Face Shortfalls After Stimulus Ends

By The Associated Press — December 22, 2009 3 min read

Using federal stimulus money to avoid layoffs at schools is going to create a shortfall even more difficult for states and schools to contend with when that money runs out, according to a first-of-its-kind study released Monday.

New York alone will see a $2 billion shortfall after stimulus money ends in 2011-12, and that could drive up some of the nation’s highest local property taxes another 8 percent, according to the analysis by state Comptroller Thomas DiNapoli.

“This isn’t just a New York problem,” DiNapoli said in an early and detailed analysis of school aid after federal stimulus funds run out in 2011-12. “Other states across the country will face a similar dilemma if they used stimulus money to plug budget holes instead of paying for one-time expenses.

“Stimulus funding is not a recurring revenue; it shouldn’t be used for recurring expenses.”

A Government Accountability Office report released a week ago found 63 percent of states in a representative sample planned to use 50 percent of their school stimulus money to retain jobs. Other uses were nonrecurring items including equipment.

In July, the GAO cautioned that many states facing deep deficits were using stimulus dollars to fill budget holes and avoid layoffs, rather than reforms that could mean longer-term savings or programs such as building new schools.

The U.S. Education Department encouraged schools to diversify the use of stimulus money to ward off huge budget gaps when it runs out, said spokeswoman Sandra Abrevaya.

“When one saves a job, it doesn’t mean one saves it indefinitely,” she said.

In California, the stimulus was credited with saving or creating 62,000 jobs in public schools and state universities. Utah reported saving about 2,600 teaching jobs. In both states, education jobs represented about two-thirds of the total number of jobs said to be created or saved by the stimulus. Missouri reported more than 8,500 school jobs, Minnesota more than 5,900. In Michigan, where officials said 19,500 jobs have been saved or created, three out of four were in education.

The Congressional Budget Office has noted the difficulty of measuring the number of jobs saved by the stimulus. “It is impossible to determine how many of the reported jobs would have existed in the absence of the stimulus package,” a CBO report said last month.

The early public warning mirrors internal worries among state budget officers nationwide.

“They have to manage through the decline and end of the Recovery Act funds, but they know it’s unlikely that improved revenues — if they improve — can cover the recovery fund amounts,” said Scott Pattison, executive director of the National Association of Business Officers.

The post-stimulus era is often called “the cliff.”

In Pennsylvania, Department of Education spokesman Michael Race says the cliff was considered in budget negotiations as a consequence of using the federal money. He says it’s difficult right now to give a specific answer about a funding drop-off since many variables have yet to play out, such as how much the governor will propose to increase school funding, and whether state revenues recover.

Though Washington is talking about another federal stimulus package, states and schools aren’t expected to get another infusion of cash. But school advocates in New York have already starting to prepare a case that schools will need more federal money.

School districts faced with raising taxes to make up for stimulus money “are going to have to put together some contingency plans,” said B. Jason Brooks, director of research and communications for the Foundation for Education Reform & Accountability, a think tank.

“There may be massive teacher layoffs,” he added.

And the future may be even darker. Depressed housing values — which lag about three years behind a recession — will hurt the ability of schools and local governments to raise tax revenue, said Michael Petrilli of the Thomas B. Fordham Institute, an education think tank in Washington.

“The question is, is this the new normal?” he asked. “Schools need to get used to the idea that lean times are here and they are here to stay.”

Associated Press Writers Matt Apuzzo in Washington and Marc Levy in Harrisburg, Pa., contributed to this report.

Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Reading & Literacy Webinar
Addressing Learning Loss: What Schools Need to Accelerate Reading Instruction in K-3
When K-3 students return to classrooms this fall, there will be huge gaps in foundational reading skills. Does your school or district need a plan to address learning loss and accelerate student growth? In this
Content provided by PDX Reading
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Equity & Diversity Webinar
Culturally Relevant Pedagogy to Advance Educational Equity
Schools are welcoming students back into buildings for full-time in-person instruction in a few short weeks and now is the perfect time to take a hard look at both our practices and systems to build
Content provided by PowerMyLearning
Classroom Technology Webinar Making Big Technology Decisions: Advice for District Leaders, Principals, and Teachers
Educators at all levels make decisions that can have a huge impact on students. That’s especially true when it comes to the use of technology, which was activated like never before to help students learn

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Federal Biden Team: Schools Can Go Beyond Trump Rules in Response to Alleged Sexual Misconduct
The Education Department's guidance, released July 20, states that Title IX rules from 2020 lay out "minimum steps" for educators.
3 min read
Symbols of gender.
Federal Fact Check: After Furor Over 1619 Project, Feds Adjust History and Civics Grant Plans
A previously obscure history and civics program has weathered a political storm, but what exactly has changed?
4 min read
Education secretary nominee Miguel Cardona speaks during a Senate Health, Education, Labor and Pensions Committee hearing on his nomination on Feb. 3, 2021, in Washington.
Education secretary nominee Miguel Cardona speaks during a Senate Health, Education, Labor and Pensions Committee hearing on his nomination on Feb. 3, 2021, in Washington.
Anna Moneymaker/The New York Times via AP
Federal 'Stop CRT' Bill, Votes in Congress Add to Political Drama Over Critical Race Theory
Sen. Tom Cotton's legislation and votes about critical race theory in the House underscore the issue's potency in Washington.
5 min read
Sen. Tom Cotton, R-Ark., speaks during a hearing to examine United States Special Operations Command and United States Cyber Command in review of the Defense Authorization Request for fiscal year 2022 and the Future Years Defense Program, on Capitol Hill, Thursday, March 25, 2021, in Washington.
Sen. Tom Cotton, R-Ark., speaks during a hearing on Capitol Hill March 25 in Washington.
Andrew Harnik/AP
Federal Senators Grill Civil Rights Nominee on Transgender Students, Sexual Assault Investigations
If confirmed as assistant secretary for civil rights, Catherine Lhamon will handle some of the Education Department's most sensitive issues.
6 min read
Flags decorate a space outside the office of the Education Secretary at the Education Department in Washington on Aug. 9, 2017.
Flags decorate a space outside the office of the education secretary at the U.S. Department of Education.
Jacquelyn Martin/AP