States Want to Delay Spending ‘Edujobs’ Billions Until 2011-12

Congress last week rushed to pass an emergency-spending bill advertised as the only way for cash-strapped states to avert laying off hundreds of thousands of teachers as the new school year gets underway. But now several state governors and public school officials are saying, “Maybe next year.”

The House of Representatives interrupted its recess on August 10 to pass legislation providing $26 billion in new stimulus aid to states, of which $10 billion is earmarked for education spending.

Although most states lobbied Congress to pass an emergency bailout, officials in California, New York, New Jersey, Arizona, Nevada and Mississippi now predict budget deficits will be worse next year, requiring even more federal assistance.

U.S. Education Secretary Arne Duncan said states needed the money right away.

The new infusion of federal education dollars, Duncan told reporters  following the vote, “means school officials won’t need to make those tough calls” this year.

“This money is intended to support jobs in the 2010-11 school year... so we have a huge sense of urgency to get this money out the door right away,” he said. “We’re hopeful we’ll be in a much better spot next year.”

‘Things Aren’t Going to Be Better’

Frederick Hess, director of education policy studies at the American Enterprise Institute, took exception to Duncan’s claims at his Education Week weblog.

“There are two problems with Duncan’s analysis,” Hess wrote. “One, things aren’t going to be better next year. In suggesting they will be, Duncan was either disingenuous or uninformed. Property tax valuations, which account for about a third of school spending, tend to lag property values by three years—which means we’re still on the front end of a slide that’s got several years to run.”

“Second,” Hess explained, “bailouts are making matters worse by making it more difficult for states and districts to rein in spending.”

Hess noted of the 34 states that passed budgets by mid-June, 23 had factored in federal “rescue” dollars. California’s budget, which is more than 50 days overdue, also assumes major federal assistance. The Golden State expects about $1.2 billion from Edujobs.

“Instead of squeezing benefits, trimming formulas, or otherwise taking this opportunity to get their affairs in order, states were leaning on their members of Congress to funnel more borrowed bucks their way,” Hess wrote.

2012 ‘Will Be the Toughest Year’

State and local school officials confirm this year isn’t the problem.

“You’ve got this herculean task to deal with [the 2011-2012] deficit,” said Lydia Ramos, spokeswoman for the Los Angeles Unified School District. “If there’s a way that you can lessen the blow for next year we feel like it would be responsible to try,” Ramos told the New York Times.

Mississippi announced plans this week to apply for $98 million in aid from the Edujobs bill. But in a statement released Thursday, Gov. Haley Barbour (R) urged local school districts to save the money for a tough fiscal challenge next year.

“FY (fiscal year) ‘12 will be the toughest budget year we will face,” Barbour said. “Given that you have already finalized your school year budgets, contracts are in place, and you have identified funding sources to fund the executed budgets, please save these unexpected funds for the extremely difficult budget year in FY 12.”

Barbour said he would have voted against the $10 billion bailout. “However,” he explained, “our taxpayers, and their children and grandchildren, are on the hook for the debt resulting from this federal spending, and it does not require us to raise taxes or make other negative policy changes, so I believe Mississippians should receive the extra funds for education purposes.”

Ben Boychuk (bboychuk@heartland.org) is managing editor of School Reform News.