Billions in Stimulus Funds No Guarantee of Success

Published October 1, 2009

As part of the $787 billion American Recovery and Reinvestment Act President Barack Obama signed into law earlier this year, $100 billion was appropriated for education in three primary areas: the State Fiscal Stabilization Fund; Title I, Part A; and the Individuals with Disabilities in Education Act (IDEA), Part B.

More than half the education funding in the bill—$53.6 billion—is dedicated to the State Fiscal Stabilization Fund (SFSF). That will award $48.6 billion to states through formula grants to help support state education budgets, with nearly $5 billion remaining for “Race to the Top” funds. In July the U.S. Department of Education announced guidelines for states to apply for Race to the Top funds, which will provide $4.35 billion in competitive grants to states.

According to the Department of Education, states must be moving toward four core reforms: common state standards, improving data systems to track student growth and learning, rewarding effective teachers, and replacing ineffective school staff. Priority will be given to states that lift caps on charter schools and allow for alternative routes to teacher certification.

Approximately $350 million of the Race to the Top fund has been set aside to encourage states to adopt common standards.

Funding also will be provided through the act for education technology grants ($650 million); the Teacher Incentive Fund, which provides at-risk schools with funding to encourage performance pay for effective teachers ($200 million); teacher quality enhancement ($100 million); data systems ($300 million); Impact Aid Construction ($100 million); Independent Living Services ($140 million); and Education for Homeless Youth ($70 million).

Bullying Tactics

Some question whether the unprecedented levels of funding actually will improve education.

“Simply throwing money at our schools has never improved the quality of education in the past, so it’s no surprise that the flood of stimulus spending is not triggering thoughtful, long-term reform today,” said Rep. John Kline (R-MN), the newly appointed ranking Republican member of the House Education and Labor Committee.

“Schools cannot enact long-term reform based on money that will disappear in a year or two,” Kline noted. “Instead they may be inclined to spend for the sake of spending or use the extra money to fill in gaps created by their own budget deficits.”

Kline also is concerned about the growing federal role in education.

“At the same time, we have a secretary of education who has been given unprecedented control over taxpayer dollars—approximately $5 billion worth—to pressure states and school systems to adopt certain reforms,” Kline said.

“Some of the ideas being pursued with stimulus funding are admirable—for example, performance pay for teachers and an expansion in the number of charter schools,” Kline said. “Nonetheless, I have serious doubts about a federal official pressuring states and local communities with the promise of funds or the threat of withholding those funds.

“At the end of the day, that’s a key problem with the temporary flood of stimulus funding. It’s all about bureaucracy and federal control rather than empowering parents and expanding opportunities for students,” Kline concluded.

Money for Nothing

Mike Petrilli, vice president for national programs and policy at the Thomas B. Fordham Institute in Virginia, says the plan is really a bailout for spendthrift states.

“The federal education stimulus should really be called a bailout. It wasn’t designed to ‘stimulate’ much of anything, either the economy or our educational progress. It was mostly designed to fill budget holes created by an unprecedented decline in state and local revenues,” Petrilli said.

“The initial impact is to stabilize aggregate education spending for 2009 at about the same level as 2008. In other words, we spent about $550 billion on our public K-12 education system last year—from federal, state, and local sources—and we’ll spend about the same this year. That also means most schools will continue to do what they’ve been doing, so we should expect results that are about the same as we’ve been getting—mediocre or worse,” Petrilli concluded.

Lindsey M. Burke ([email protected]) is a researcher in domestic policy studies at The Heritage Foundation in Washington, DC.