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Some Minnesota districts plan to bank ‘EduJobs’ stimulus money to deal with future ‘funding cliff’

Minnesota will soon receive $167 million to stimulate teacher hiring.

Sometime in the next couple of weeks, the Obama administration will quite literally deposit $167 million in Minnesota’s bank account in the hope that school districts throughout the state will get busy preserving and creating jobs for teachers.

And a staggering number of Twin Cities teachers need jobs. As the result of more than $150 million in budget reductions and the Legislature’s ratification of Gov. Tim Pawlenty’s 2009 unallotment to schools, worth $1.4 billion, last spring metro area schools cut some 1,500 educators, according to estimates by the Association of Metropolitan School Districts

A number of district administrators, however, don’t plan to recall laid-off staff now, when pupils have already been assigned to overstuffed classrooms for the current school year. Instead, some plan to save the money for next year, when they face what one has termed a “funding cliff” of unprecedented proportions.

For the two-year budget cycle beginning July 1, 2011, Minnesota faces a $5.8 billion budget deficit. Combined with this year’s decision by the Legislature to delay $1.9 billion in current school funding, the fiscal chasm looms enormous, administrators say.

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Funding reductions foreseen
“We just feel that the size of the state’s deficit problem is such that schools are going to probably see some type of reduction in funding,” said Tony Taschner, director of communications for the Rosemount-Apple Valley-Eagan district, which is in line to receive $5 million in so-called EduJobs funding.

“We’ve made significant reductions this school year and will go forward with those,” he said. “We’re having a levy [PDF] this year and asking residents whether they want to go to the maximum in terms of what’s allowed.”

With 27,000 students, Rosemount-Apple Valley-Eagan is the fourth-largest district in the state, right behind Minneapolis. To close a $25 million gap in its last two budgets, the district cut 144 jobs, raised fees for student activities, eliminated transportation for all after-school activities and cut programming. In 2011, the district will likely have to find another $23 million to cut.

Bernadeia Johnson
MinnPost photo by Craig Lassig
Bernadeia Johnson

In an interview last week, Minneapolis Public Schools Superintendent Bernadeia Johnson said there are plenty of gaps that can be filled by the EduJobs money this year. Particularly given its focus on closing the achievement gap, MPS is in desperate need of literacy coaches and other classroom support professionals.

St. Paul Public Schools hasn’t decided what to do with its share of the funding. SPPS needed to cut $27.2 million from the current year’s budget and faces some $23 million in cuts next year.

Initial recommendation: Bank the money
In Anoka-Hennepin, the state’s largest district, the math is similarly grim. The school board and cabinet have yet to make any decision, but Finance Executive Michelle Vargas’ initial recommendation is to bank the $7.2 million in cash.

Over the next three years Anoka-Hennepin must find $100 million, or 25 percent of its budget, to cut. Its $8 million share of the “edujobs” money? “It’s a drop in the bucket,” Superintendent Dennis Carlson told MinnPost last month when Congress passed the funding.

Stimulus notwithstanding, Carlson said he will likely have to lay off 500 to 700 teachers. “We’re the largest employer in Anoka County,” he said. “The economic ripple over the next three years is huge.”

Isn’t that ripple precisely what the federal stimulus is intended to reverse?

Job creation is the main purpose of stimulus funding: Instead of drawing unemployment, job holders spend their wages, sending stimulant ripples out into the community. The sooner the spending commences, the thinking goes, the sooner it can spark the creation of other jobs.

Slow spending pace has drawn criticism
Indeed, the slow pace with which states are spending past infusions of stimulus dollars has draw criticism on both sides of the political aisle. State officials counter that they are trying to forestall charges of reckless spending by being cautious in approving public works projects and other eligible uses for the money.

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In addition, two years after the collapse of the economy, the number of “shovel-ready” projects is limited. Locally, this seeming Catch-22 recently resulted in a decision by Hennepin County to spend some of its stimulus on a long-debated $130 million luxury hotel at the Mall of America. It was the only project that qualified, County Commissioner Randy Johnson told the Star Tribune.

Ethan Pollack
Ethan Pollack

Minnesota isn’t the only state where school districts are choosing to hang onto the one-time federal grant, noted Ethan Pollack, a policy analyst at the Economic Policy Institute in Washington, D.C.

Ideally, he explained, stimulus money should be spent as quickly as possible. But the reality is that lots of school systems are share Rosemount-Apple Valley-Eagan’s reasoning.

‘Budgets may continue to get worse’
“The much larger point here is that states are still facing huge funding gaps,” he said. “State and local budgets are on two- to three-year time lags, so even after the economy starts to recover budgets may continue to get worse over the next couple of years.”

When the money gets spent – something that has to happen by September 2012 – it will of course help, he added, but a bigger boost would be some kind of coordinated effort in Washington to address the states’ crises.

“Throwing a little bit of money at them helps, but it’s like swatting at a mosquito while your house is burning down,” he said. “A lot of this money, as it goes out, will do nothing to stop the bleeding. It will just stop things from being worse.”