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Federal stimulus funds allowed schools to ‘tread water’ but not innovate, report finds

Over the last year and a half, the Obama Administration has dedicated more than $800 billion to the combination of tax cuts and federal spending popularly referred to as stimulus funding.

Over the last year and a half, the Obama Administration has dedicated more than $800 billion to the combination of tax cuts and federal spending popularly referred to as stimulus funding. A substantial chunk, more than $100 billion, has gone toward K-12 education.

In terms of keeping lights on in schools and teachers in classrooms, those dollars have been a godsend. But they haven’t yet stimulated the kind of reform and innovation Obama and Secretary of Education Arne Duncan envisioned, according to a report (PDF) released by Bellwether Education Partners, a national nonprofit organization dedicated to accelerating low-income student achievement.

As each installment of the funding has been announced, Minnesota educators predicted as much, noting that Gov. Tim Pawlenty’s response has been to shift an equivalent number of dollars away from education, in effect using the money to balance the state budget. So the $500 million in education stimulus funding Minnesota got in 2009 did not translate into an increase in aid to schools.

Pawlenty is not the only governor to use the money to balance the budget, the report found: “In many cases, the funds simply helped districts tread water, as several states reduced education budgets by roughly the same amounts they received,” the authors wrote.

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“Connecticut, for example, factored its $542 million … into existing state grants, enabling it to supplant state dollars with stimulus funds. Massachusetts cut $412 million from its state aid to K-12 schools and filled the hole with its [stimulus] allocation,” they reported. “This approach was taken in states nationwide; as a result, more than two thirds of districts around the country experienced a decline in funding from [non-stimulus] sources in 2009-10.”

The study found that most school districts used the funding to “backfill” state and local budget cuts and preserve existing programs and services. More than 60 percent of districts used some of the money to save or create teaching jobs.

Job creation, of course, is the ultimate aim of any stimulus package. To that end, Minnesota’s $168 million share of the so-called Edujobs funds approved by Congress last August came with strings: The money had to be given to districts, which had to spend them on personnel. Far from putting the money to work creating new jobs, most districts either used it to stave off layoffs or banked it in anticipation of next year’s “funding cliff.”

What, you ask, is a funding cliff? Something we’re about to stampede right off of: Between Pawlenty’s 2009 unallotment to schools, worth $1.4 billion, and this year’s decision by the Legislature to delay $1.9 billion in current school funding, Minnesota school districts are staring into an enormous fiscal chasm, administrators say.

The report underscored a basic flaw in the very premise behind the Edujobs money that Minnesota education policymakers spotted right off the bat: Because one-time money, by definition is not sustainable, administrators are reluctant to use it to fund ongoing positions or programs.

“Districts struggled to reconcile the competing emphases on saving jobs, advancing reform, and avoiding funding cliffs. But in many cases, the cliffs have not been avoided at all,” the report noted. “By using [the] funds to save jobs and offset budget cuts, many districts have merely postponed the pain of those cuts.”

Avoiding a spending cut doesn’t count as stimulus, the authors argued. And particularly not the kind of innovation and reform Obama and Duncan repeatedly say they want to stimulate. The administration should be clearer about what it desires as a result of any future spending, the report suggested.

“Many states and districts have reached the limits of easy fixes,” the authors noted. “They have cut the obvious fat from their budgets and cannot continue to make across-the-board or marginal cuts without doing real harm to students and schools.”