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After reviewing these materials, I came away with a clearer understanding of the education funding goals and limitations.  Here are a couple of key points of emphasis.

“Spend the money quickly to save and create jobs”, states one of the principles listed in the document The American Recovery and Reinvestment Act of 2009: Saving and Creating Jobs and Reforming Education. States will be receiving the majority of the stabilization, Title I and IDEA funds by the end of March with little paperwork required to trigger the federal allocations.  Rarely does this happen, and it is a clear indication of the federal government’s goal to get the dollars to school districts in time to impact 2009-2010 budgets.  The balance of the funding should be available to states by July 2009, after full applications are submitted.

No doubt jobs can be saved by this quick action.  For example, the town of East Hartford has included a $2 million contingency line in its education budget proposal pending the outcome of the ARRA funding.  Fast movement of the funding to states, and a hopefully quick pass-through process from the state to local education associations, will prevent the local board from having to make job cuts or other reductions by getting this contingency funding into the actual school budget.

Possible uses of the funds by school districts are more restricted for Title I and IDEA, and less so for the stabilization funding.  And while rules governing maintenance of effort, (supplement not supplant), remain in effect for the Titled program components; there is some potential for flexibility depending on special circumstances.  While saving and creating jobs is a desired result, guidance stresses that the funds must be spent in such a way that a “cliff” is not created.  In other words, creating a bunch of new positions that are guaranteed to be eliminated in two short years when the stimulus funding ends makes no sense.  So there is some conflict here between the stated goal and the short term nature of the funding.

In some ways, it makes more sense to spend these dollars on programs and services that can have a positive and long term impact even after the money is gone.  Professional development, technology upgrades, and program improvements that can be accomplished within the next 12 to 30 months, with an impact that extends beyond that time frame, is essential.

With the bulk of the federal money to be in state hands within a few weeks, and virtually all of it by the start of the new fiscal year, the governor, legislature and the State Department of Education are going to be tested to duplicate the speed of the feds – getting logistics and questions ironed out quickly to make sure there are no undue delays in putting these funds to work.

More on this to come…

School district level estimates have now been added to the website for the Title 1 component of the package which provides over $70 million in additional aid over two years.  It looks like about ½ of all districts will receive funding-consistent with distribution of regular Title I aid-and about ½ will receive little or no aid.

For those districts slated to receive significant additional funding under this provision, a key question will be limitations on the use of the funding which appears to be governed by three specific ESEA sections: 1125: Targeted Grants to Local Education Agencies; 1125A: Education Finance Incentive Grant; and, 1003g: School Improvement.   School districts receiving large supplements will need to work these funds into there overall school budgets in ways compatible with ESEA provisions.

Will LEA supplanting – normally prohibited – be permitted for these supplemental funds?  If anyone reading knows the answer to this, please post a response and a reference.

If the answer to this question is out there somewhere, I’m not aware of it, at least not at a level of reliability I would be comfortable with if I were putting together a local spending plan. Speed kills, and nowhere is that more true than in mathematic computations. So we need to be a little patient as the state sorts through the various provisions and calculates entitlements town by town.

A couple of things are clear enough however. By raising the education earmark percentage of the Fiscal Stabilization allotment to 81.8% from the original 61%, Congress kept the dollars for education in line with the original proposal despite reducing the overall size of the Fiscal Stabilization Fund. That’s good news because it avoids a gap that would have been created in the Governor’s budget for Education Cost Sharing—where it was clear those funds were being counted on to avoid ECS cuts. So on that basis, it would seem reasonable that the proposal not to cut ECS in 2009-10 and 2010-11 is alive and well.

How much ECS will my town get? Most likely the same amount it received in 2008-09. Don’t expect more, but continue to lobby for it, because—as we all know—level funding in the face of increased costs is a reduction in spending power.

All towns should receive a share of the IDEA allocation, a long overdue infusion of federal support for special education. Most towns should receive a share of the Title 1 allocation. Connecticut receives $200 million combined ($100 million each year) for these two programs, most of which gets passed through directly to school districts. How much? Like I said, I haven’t seen the answer to this yet, but I’m working on it. Stay tuned.As more detailed information on these and other education components become available, I will be only too happy to pass them on.

The other shoe I speak of dangles some 400 miles south in Washington, DC – in the halls of Congress to be more precise. It is tied up in the federal stimulus package, which, despite passage in the House and this weekend’s compromise agreement on a somewhat different version in the Senate, still has a ways to go. The differences in the two versions are significant, particularly in the education provision, and until a reconciliation of the two versions has been worked out, the amount of education stimulus aid CT can expect, and the exact conditions of its use remain uncertain. That outcome could hugely impact the Governor’s proposals for education funding.

The Governor’s budget recommendation for maintaining education aid to towns at 2008-09 levels appears to rest on replacing state education dollars with a huge chunk of revenue from the State Fiscal Stabilization Fund provision of the stimulus package. “Huge chunk” is not a very definitive term, but unfortunately a necessary one, because at this point the two houses of Congress remain very far apart – perhaps as much as $40 billion apart on how much State Fiscal Stabilization Funding will be in the final package. Since the majority of the Stabilization money has been earmarked for education aid, (elementary, secondary and higher education), this creates a huge question. The $79 billion in the House version could be cut by half or more if the Senate version is adopted, and that could mean close to $200 million less Stabilization Aid for CT in 2009-10 alone. Given the percentage (61%) earmarked for education in the original bill, that loss would put at least a $120 million gap in the Governor’s education plans. Will the promise of level education funding in CT’s budget be fulfilled if, in fact, the stimulus funds become much lower than the Governor’s Budget anticipates?

But a second and equally tough question is: Even if the full amount anticipated does come through, and is used to prop up the ECS grant for the next couple of years, what will happen when the stimulus funds stop in 2011? If the state has to add hundreds of millions in general fund dollars back into ECS at that point just to hold it flat – let alone increase it – at a time when economic recovery may just be beginning, education funding in CT will almost certainly face several more difficult years. And yet, who would argue that level funding for the next two years is not a far better fate than drastic cuts? I certainly wouldn’t. But the circumstances under which that may be accomplished, and the ramifications down the road, may be cause enough to turn that sigh of relief into just a plain old sigh.

We have all heard many times, and most of us believe, that an investment in education is an investment in the future well being of the state and its citizens. But we tend to see this benefit as being paid out years down the road when our children grow into productive adults making their own contributions to the economies and social fabric of their communities. Of course some move on to make those contributions elsewhere, but in general, we recognize a long term payback.

But, what about the near term? Can a case be made that education spending in the present also yields an immediate economic benefit that should be considered before cutting aid to our schools? The answer is yes, according to Richard Sims, Ph.D., Chief Economist at the National Education Association. Using an econometric model of Connecticut, Dr. Sims has concluded that an education dollar creates more jobs in communities than any other industry. In part, his conclusion is based on the fact that education spending is 80-85% labor driven, as opposed to the 50% or less typical of corporate, manufacturing and other sectors.

In a time of rising unemployment, it follows that including education aid in a comprehensive economic stimulus package would help sustain and improve employment to a greater extents than other types of investments. The model goes on to show the employment impact of education spending comes in three relatively equal parts—one third teachers and other certified staff, one third support staff and other school related employment, and one third non education related employment in the community. The first two components are clear enough. An education stimulus package will save education jobs that otherwise seem certain to be lost if school spending is cut or even level funded.

But the remaining third, the impact on non-education employment in a community, requires a little explanation. Dr. Sims’ analysis indicates that education is heavily concentrated within the community being served. Pretty much all education employees live in or near the towns in which they work. The income they earn therefore is largely expended in the area, supporting all other facets of the local economy—housing, services, retail, entertainment. Consequently, these non-education community industries also benefit if education employment stays intact—and conversely, stand to lose if significant numbers of education workers become unemployed.

Comparatively, stimulus spending in the private sector does not produce the same degree of local economic benefit, because much of the income generated goes to distant corporate venues—even labor outsourced overseas in many cases.

For more on education funding, visit the NEA website at: http://www.nea.org/home/1019.htm

I think his model makes an interesting, and not often heard, case for sustaining education spending in tough economic times. Setting aside the usual arguments emphasizing the many values and virtues of education, it offers a practical basis. Education spending can do more for local economies than other types of incentive spending alternatives.

I also like the new President’s idea of rebuilding the nation’s infrastructure as an economic engine in the years ahead. And that kind of program can certainly help state and local governments. But in the short term, there is something Washington can do for state and local governments nationwide—something simple, something powerful, and something long overdue. Increase federal funding for IDEA—special education, and do it now.

As state and local governments grapple with epic budget crises, the situation for education funding will be more precarious that at any time in recent memory. Right here in Connecticut, 10% reductions in state education spending are in the mix of possibilities. That’s $285 million, most of it in the form of aid to towns that cannot compensate for such a hit with local tax revenues. Local education budgets will be impacted significantly in many jurisdictions.

Now consider this. In Connecticut, spending for special education will top $1.5 billion this school year—more than 20% of all current education expenditures. The split of local (60%), state (31%) and federal (9%) aid for special education translates into $900 million local support, $465 million state support, and $135 million federal support. In 1975, when IDEA became law, 40% federal support was promised. Imagine if CT were to receive federal aid more in line with that initial promise, and local/state support could be reduced accordingly.

At 40% the federal share would be $600 million, not $135 million, allowing local and state special education spending to drop by a combined $465 million—without cutting services to a single child. And it would free up those state and local dollars to help address the current budget crisis here. Increasing the federal share to 40% over three or four years would still provide more than $100 million to CT each year until the target was reached. Think what that could do given the current state and local budget situation.

Current national figures are estimates, but information on the NEA website suggests that less than $25 billion in new federal aid would be needed to bring the federal share to 40% nationally. Read the complete NEA proposal for IDEA funding.  

I know $25 billion is a lot of money, but given what has been done and is being considered for other sectors of the economy, it isn’t an unreasonable amount for states (and towns) to receive. I won’t even call it a bailout, since it is only what was promised long ago. And best of all, it can be done quickly because the programs and payment processes are already in place. No new planning or lengthy ramp up period is required.

Mr. Obama, Congress, you can get that money where it can do some real good, real fast.

A little simple math tells the story. I estimate spending in Connecticut’s local public schools for core programs—regular education, special education and transportation—to be around $7.2 billion. This estimate is based on 2006-07 actual figures, the latest published on the SDE website, with increases for 2007-08 and 2008-09 factored in based on the growth rate for these programs over the prior three years. The figure is probably low, but it’s close enough for our purposes. Keep in mind that these core services do not include things like capital construction, debt service and adult education.

Spending for these programs has been increasing between $220 and $250 million per year statewide. Let’s use $250 million as the likely increase necessary for 2009-10 to maintain existing services. My guess is that the average annual cost increase from local sources since 2004-05 has been between $125 million and $150 million. It would have been higher but for the significant increase in ECS ($260 million) over the past two years.

Now look what happens if the state cuts ECS aid in accordance with the worst case 10% budget reduction option. Towns would actually receive $191 million less in ECS than they are being paid this year. That means they would have to come up with that amount locally just to keep spending at the exact 2008-09 level. If local budgets in 2009-10 were to be increased to meet the costs necessary to maintain current service levels, an additional $250 million would be needed—all from local sources. Put those two numbers together and towns may be faced with a $441 million dollar increased price tag for education—3 times the figure they have had to meet on average over the past 4 years.

Anybody see a way for that to happen? I’m thinking no. If these cuts happen, there does not seem to be a way for most towns to make the cuts work. They may end up seeking relief from the Minimum Budget Requirement statutes—and if that law gets changed…well, that’s a good topic for my next post.  

Interestingly, almost the entire SDE budget is comprised of pass through funding for local school districts, so any significant reductions pretty much would have to be accomplished by cutting education aid to towns.

Here’s why. The SDE budget for 2008-09—prior to the Governor’s rescissions—was about $2.67 billion. A 10% reduction would be nearly $270 million. To see where the $270 million could be taken, we need to look a little closer at how the $2.67 billion is allotted.

In approximate figures, payments to local governments makes up $2.4 billion of the SDE budget—89%. ECS accounts for just under $1.9 billion of that figure; categorical and targeted grant programs total $500 million. Another $80 million or so is passed through to non-governmental education agencies such as Regional Education Service Centers (RESCs), Charter Schools, the American School for the Deaf and others—leaving under $200 million that stays with the SDE.

Those funds are used primarily to operate the CT Technical High School (CTHS) system—20 schools and satellites, and more than 10,000 students. The exact breakdown of CTHS share of the SDE budget is not spelled out in the state budget summary, but I believe about $140 million of dollars that remain with SDE go to operate the Technical High Schools.

To keep it simple, about $2.4 billion goes to towns for education, and about $270 million goes to the CTHS, other education agencies, and the Department’s leadership, administration, and similar activities.

Since $270 million happens to be 10% of the SDE budget and the amount not paid directly to towns for education, the only way to cut the SDE budget by 10% without cutting town aid would be to shut down the Tech HS system, eliminate all grants and aid to education agencies other than towns, and close the department. Of course that makes no sense, but even if it were possible, those 10,000 technical high school students currently paid for by the state would be back in their home districts—increasing local costs accordingly.

On the other hand, if the reduction were distributed in such a way that SDE operations, and grants to non-governmental education agencies took a 10% hit—as difficult as that would be—less than $30 million would be saved. Which means, of course, that the remaining $240 million needed to reach the targeted reduction level could only come from grants to towns. In ECS aid, 10% would be $190 million alone. Of course, other grants to towns would see cuts as well, unless ECS were to take a cut larger than 10%.

Not a pretty picture any way you look at it. But people need to understand that reductions of this magnitude can really only come from one place in the SDE budget. You can’t fault the State Board of Education for allocating such a large share of the cut a 10% budget reduction would bring to the ECS grant. There really would be no alternative. Hopefully, it won’t come to that.

For related news stories see the Journal Inquirer and the Hartford Courant.

With its heavy emphasis on mathematics, science and world language, coupled with a strategy to maximize the success of every single high school student starting with preparation in middle school, the plan holds promise for a generation of graduates far more ready for the challenges of the 21^st century global environment.

Not surprisingly, the plan carries a pretty hefty price tag—a hurdle in good financial times and a formidable hurdle given the state’s current economy. New spending of any kind, education or otherwise, will be a tough sell to the General Assembly in the upcoming biennial budget deliberations. Ignoring that eight-hundred pound gorilla for a moment, here are a couple of other considerations for the proposal.

While the plan targets areas that are universally regarded as critical in today’s world, some might argue that there may need to be more content for those students not going on to higher education, but entering the economic market right after graduation. With or without any adjustments to the plan’s content, there are a few resource and costs that may require further inquiry before action on the plan is taken.

• The individual student success plans are an integral component of the proposal, and it has been estimated that a single added teacher in each middle and high school will be sufficient to staff this function. With building enrollments ranging from 200 to 2000 across the state, and without a clear picture of exactly how much time per student, and therefore how many students, one person will be able to serve, one FTE position per building may not suffice. If so, resources and costs for this critical activity would need to be increased.
• Staffing needs for the additional math, science, and world language sections, and increased guidance services may also be underestimated. Because of the specialized nature of the added classes, the potential cited in the plan for current staff with certification in those subjects—areas they may never have actually taught—to pick up a significant share of the workload may not be achievable. Costs for this component could vary considerably depending on how much of this capacity turns out to exist in each districts current staffing.
• The overall changes the plan calls for, and the pronounced emphasis on the increased use of technology, warrant a considerable commitment to professional development. Past initiatives have sometimes fallen short of goals because the professional development component lacked a full measure of commitment, or the funding was reduced or eliminated. Hopefully, this will not happen to this initiative.

These points are not offered as criticisms of the proposal, but rather recognize that The Connecticut Plan is too important and necessary a course of action to be undertaken with less than a full commitment. That means not only the right amount of resources to start the job, but a sustained commitment to get it right and keep it that way. To do otherwise would be a disservice to the effort, and to the students whose lives the plan is meant to improve.