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Education Stimulus

Schools Continue to Struggle with Budget Cuts

April 8, 2010

Today the American Association of School Administrators (AASA) released its seventh report based on surveys of school administrators and the effect the economic downturn has had on school operations, employment, and other aspects. This report, titled “A Cliff Hanger: How America’s Public Schools Continue to Feel the Impact of the Economic Downturn,” focuses on the difficult choices schools will have to make in the 2010-11 school year given the on-going funding cuts occurring at the state and local level. Federal stimulus funds are slated to expire in 2011, presumably because legislators expected state and local revenues to bounce back enough by then to provide ample funding for education. But reports from school administrators suggest that 2010-11 is going to be the toughest financial year yet, forcing them to make some difficult sacrifices.

First and foremost, school administrators report that state and local budget cuts are expected to be larger in 2010-2011 than they were in 2009-10. Budget cuts of 10 percent or more from the prior year levels are likely in nearly half of responding districts. Additionally, only 9 percent of administrators reported that American Recovery and Reinvestment Act (ARRA) funds would be substantial enough to prevent cuts from 2009-10 to 2010-11.

These looming cuts and insufficient stimulus funds are forcing administrators to cut corners in a wide variety of ways. More than one-third of administrators may institute personnel furloughs and more than half are considering laying off personnel in 2010-11. In both cases, significantly more administrators reported resorting to these methods in 2010-11 than 2009-10. This finding suggests that ARRA education funds, once considered essential to maintaining education jobs, are losing their potency.

The types of jobs that are slated to be cut have also changed since 2009-10. Almost twice as many administrators reported that they will cut core subject classroom teachers in 2010-11 than 2009-10 (61 percent versus 37 percent). The number reporting layoffs for special education teachers and teacher aides or assistants also nearly doubled over the same time frame. While some education stakeholders believe that streamlining school employment roles and cutting out wasteful positions can make public schools more efficient and effective, there appears to be a point of diminishing returns to that strategy. Once budget cuts begin to affect highly qualified classroom instructors, who are responsible for students’ academic outcomes, this streamlining could undermine student achievement.

But the budget crunch isn’t just affecting teachers and other school employees; it is dramatically changing the services schools provide. Twenty-six percent of administrators reported that they will increase class sizes and 50 percent reported that they will reduce extra-curricular activity offerings in 2010-11. More than half of responding administrators also reported that they will cut elective courses in the coming school year and 13 percent are considering moving to a four-day school week. Drastic measures like four-day weeks and eliminating extra-curricular activities have wide ranging effects. They create challenges for working parents who will need to find child-care and force students to go elsewhere for after-school activities. While it’s impossible to estimate the repercussions of these changes now, they are sure to be significant for students and their families.

In all, the AASA report paints a dismal picture of school district finances across the country. While none of these budgeting decisions are set in stone, the fact that administrators are considering them at all suggests that more difficult decisions are likely to lie ahead for schools if the budget situation does not begin to improve. Until then, school administrators will likely look to the federal government for support, particularly as the ARRA funds run out completely.

A few months ago, the U.S. House of Representatives passed a $23 billion fund that would help support public education jobs that was ultimately rejected by the Senate. Will that Education Jobs Funds reappear as school finances continue to flounder? School administrators across the country certainly hope so.

Some Details on the Teacher Quality Partnership Grant Recipients

April 6, 2010


Last week the Department of Education announced the recipients of the $100 million in Teacher Quality Partnership grants made available through the American Recovery and Reinvestment Act (ARRA). This program aims to build partnerships between local school districts and teacher colleges to improve and reform teacher training programs. According to the press release, 12 grants were awarded. Seven of those grants will go towards teacher residency programs, three will focus on more traditional licensing programs, and two will do both. Additionally, five grants will also focus on training for school leaders like principals and superintendants.

President Obama has been voicing support for programs like these since the campaign trail. Though little rigorous evidence exists as to their efficacy, anecdotal evidence supports programs like teacher residencies and other alternative induction and training programs.

Beyond this limited information available in the press release, however, the Department of Education provides almost no details on any of the funded program. To remedy this, Ed Money Watch has done some digging to collect more details on each of the grants. The information we collected, as well as links to further details, can be found below. We will be sure to update this as we get more information.

California State University – Northridge (California)
Project Name: Teaching Residency Program in Special Education

According to Congressman Brad Sherman’s website, this $8,454,548 grant will address “the critical shortage of qualified special education teachers who are prepared to serve in high-need schools. The project is a partnership between the Los Angeles Unified School District (LAUSD) and the Colleges of Education and Humanities at California State University, Northridge. The program will recruit a total of 150 special education teachers from culturally and linguistically diverse backgrounds, prepare them to serve children with disabilities in high-need schools, and evaluate the impact of the project on new teachers and their students. The program will offer an 18-month credential or master’s degree residency program in Special Education, and a 2-year induction program.”

Denver School District No. 1 (Colorado)
Project Name: Denver Teacher Residency

This residency program was awarded a grant of $8,204,269. No specific information on the Teacher Quality Partnership grant proposal is available. However, information on the Denver Teacher Residency program can be found here.

Iowa Department of Education (Iowa)
Project Name: Iowa Teacher Quality Partnership Project

According to the Iowa Department of Education, this $9,035,380 grant will be used to “partner with the UNI, Stanford University School Redesign Network, and UCLA's National Center for Research on Evaluation, Standards, and Student Testing (CRESST)…[to] work together to define emerging attributes of effective teaching and integrating those attributes into both teacher preparation programs and continued professional development for beginning and experienced teachers.” Additionally, the grant work will include the “use of innovation and technology in Iowa's classroom and UNI's educator preparation program. UNI teacher preparation students will be able to gain even more hands-on learning experiences by joining various classrooms of rural high-needs schools in Iowa through online technology such as video conferencing. The intention is to broaden this effort and make it available to all accredited teacher preparation programs in the state.”

Governors State University (Illinois)
Project Name: Chicago Southland Region Teacher Quality Partnership Project

According to a Park Forrest, IL news source, the $7,172,773 grant will provide “GSU alternative certification students…with mentor-teachers in south suburban classrooms for a one-year residency period. They will be paid $30,000 during the residency period, with that salary coming via the federal grant. Teacher candidates will work in high-need, low-income school districts and, after certification, will agree to teach for three years in the partner district. The grant provides funding for about 170 residency placements over the next five years. Partnering school districts are Calumet Park 132, Posen-Robbins 143.5, Dolton-Riverdale 148, Harvey 152, West Harvey-Dixmoor 147, Lincoln 156 in Calumet City, Ford Heights 169, Thornton High School 205, and Bloom High School 206. The nine districts represent 21,000 students in 37 schools. All have heavy concentrations of minority and low-income students.”

University of Chicago (Illinois)
Project Name: University of Chicago Urban Education Institute's Urban Teacher Education Program

According to a University of Chicago release, the $11,584,312 grant will expand the existing teacher residency program and “result in improved curriculum to align with the needs of Chicago Public Schools, the addition of a robust secondary mathematics and science certification program, enhanced recruitment strategies to further improve the selectivity and diversity of candidates, extended new teacher induction activities, and solidified school partnerships. Chicago UTEP will work with the Consortium on Chicago School Research to evaluate and measure the impact of their model. When the work supported by the grant is fully operational after five years, the Chicago UTEP program will be serving approximately 300 aspiring and novice teachers in various stages of development.”

Boston Plan for Excellence (Massachusetts)
Project Name: Boston Teacher Residency Partnership

According to information shared with Ed Money Watch by Boston Teacher Residency staff, this $15,024,128 grant will be used to "increase the number of effective teachers the Boston Teacher Residency Partnership (BTRP) prepares to teach in Boston Public Schools (BPS).  This will be accomplished by recruiting and intensively preparing teacher candidates in high-need areas identified by BPS including special education, English as a second language, science, mathematics and early childhood with a focus on attracting teachers from underrepresented populations. Specifically, the BTRP plan is to prepare a total of 548 teachers, representing more than one-third of the district's total hiring needs and including 105 new special education teachers; 102 new teachers of English language learners; 175 math and science teachers; and 48 early childhood teachers.  This project scales up the already well-established Boston Teacher Residency (BTR) program and adds an emphasis to the preparation of K-2 teachers by including Wheelock College in the existing partnership of BTR, University of Massachusetts Boston and BPS."

University of North Carolina – Greensboro (North Carolina)
Project Name: Project ENRICH

According to a University of North Carolina – Greensboro release, the $6,948,132 grant will be used to expand Project ENRICH into the Winston/Forsyth Schools. With the grant “UNCG will recruit and train teachers, including about 20 resident teachers per year who will earn master’s degrees and get hands-on training working with experienced teachers in the school system. Residents will be selected to mirror the diversity of the student population, and must have an undergraduate degree in a content area and no teaching credential.” The program aims to “prepare approximately 475 teachers during the five year period (100 residents in math, science, special education and English Language Learners and 375 undergraduates in a variety of fields that include elementary, middle and secondary teachers from multiple areas: math, science, English, social studies, foreign languages as well as music, art, physical education and literacy).”

Questa Independent Schools (New Mexico)
Project Name: Land of Enchantment Teacher Quality Partnership

According to a press release from Senator Jeff Bingaman’s website, the $8,680,166 grant “will fund 50 special education teachers and 50 principals over the next five years in the Chama Valley, Dulce, Cuba, Jemez Mountain, Mesa Vista, Questa, Peñasco and Central Consolidated (Kirtland) school districts… The Land of Enchantment Teacher Quality Partnership will use this funding to support a special education teacher residency program, which will recruit recent college graduates who will be paired with a special education mentor in the classroom.  The grant will also allow the schools to develop and implement a school leadership program to prepare candidates for careers as principals and superintendents.  The funding will allow teachers in the districts to take a one year leave from teaching and explore an administrative internship.” 

Lehman College (New York)
Project Name: Mathematics Achievement with Teachers of High-need Urban Populations

According to a City University of New York release, the $7,662,612 grant will “prepare elementary teachers who are highly qualified to teach English language learners and students with special needs and to improve the mathematical understanding and performance of all students… MATH-UP (Mathematics Achievement with Teachers of High-need Urban Populations) aims to prepare 125 teachers in grades 1-6 who will bring their new skills and approaches into the classrooms of 18,750 South Bronx students. The grant will provide a diverse group of teachers with a rigorous graduate program that is content-enriched, school-focused, needs-based and integrated with professional development.”

National Math and Science Initiative, Inc. (Texas)
Project Name: The Teacher Preparation Reform Consortium

According to a National Math and Science Initiative press release, the $2,252,355 grant will be used to “implement the highly-regarded UTeach program at Cleveland State University in Cleveland, Ohio… Created originally by The University of Texas at Austin, UTeach enables college students to graduate in four years with deep content knowledge in a math or science major as well as teaching certification.  Ninety-two percent of UTeach graduates from the UT-Austin program become teachers, and 82 percent are still in the classroom after five years.”

Virginia Commonwealth University (Virginia)
Project Name: Richmond Teacher Residency Program

This residency program was awarded a grant of $5,796,491. No specific information on the Teacher Quality Partnership grant proposal or the Richmond Teacher Residency Program is available.

Heritage University (Washington)
Project Name: Heritage 105: Heritage University and ESD 105 Collaborative

According to the Yakima Herald, the $9,017,011 grant will provide teachers in training with “hands-on classroom training upon entry into the teaching program, instead of near the end. Sixteen teaching-learning teams will be developed and placed at three area school districts, which have yet to be named. The teams, consisting of three students and a seasoned teacher, will be divided into eight separate groups of graduate and undergraduate students. Team members will work together to instruct a class and prepare lesson plans — enabling them to better teach the material and connect with their students, said McGuigan, project director for Heritage 105. Once a week, the student teachers will also receive training from Heritage faculty and staff at ESD 105, who specialize in such areas as reading and math instruction. The student teachers will follow their classes from year to year and will train their replacements when they graduate from Heritage.”

Race to the Top, March Madness Style

April 2, 2010

In honor of the men’s college basketball Final Four games this weekend, Ed Money Watch has put together a bracket based on the Race to the Top competition. We divided the top 32 states that applied for the grant money (based on their RttT scores) into four regions and then seeded them based on their perceived “reformy-ness” and the frequency with which they were mentioned as likely RttT winners. Then we used their final RttT scores to determine which state won in each pairing. There were few upsets with the exception of Tennessee besting the favored Florida in the South. Of course, take this bracket, and the subjective assignment of seeds, with a grain of salt. Happy March Madness!

Click here to download the pdf.

Breaking Down the Race to the Top Scores

April 1, 2010

Much has been said about the Department of Education’s recent announcement of the winning states in the first round of Race to the Top grants. Only two of the 16 finalists states – Delaware and Tennessee – were selected to win the competitive grant aimed at encouraging innovation at the state level. These states received the most points from the panel of reviewers out of the 500 possible – 455 for Delaware and 444 for Tennessee. The resulting discussion has centered on the two states’ abilities to garner widespread stakeholder support – particularly from teachers unions – for their Race to the Top plans. But a closer look suggests that the final scores for each state were tipped by more than just stakeholder support.

Indeed, both Delaware and Tennessee got high marks under the “broad stakeholder support” subcategory – 9.8 of the possible 10 points. But so did Kentucky (awarded 9.6 points) and Ohio (awarded the complete 10 points). Delaware and Tennessee also did well in securing commitment from local education agencies (LEAs), as did Pennsylvania, Kentucky, and North Carolina (all earned 9.8 point or more).[1]

If that’s the case, then how did Delaware and Tennessee stand out from the pack?

Initially, it looks like the answer lies in the standards and assessments section. Delaware got nearly every point possible in each subcategory in this section that focuses on the development of common academic standards and rigorous assessments. Tennessee did nearly as well with a one exception – support for the transition to the new standards and assessments. But, most states did well in this section. Seven additional states were awarded the vast majority of points available in three or more subcategories under the standards and assessments section.

Delaware and Tennessee also scored well in the section of a application relating to state data systems used for improving instruction, receiving 93 percent or more of the possible points. Most states didn’t do nearly as well in this section, giving Delaware and Tennessee somewhat of an advantage.

In reality, it looks like the “great teachers and leaders” section really made the difference. This section awarded states points based on their plans to improve the training, distribution, and quality of teachers and the supports provided for them. But this is not because Delaware and Tennessee did exceptionally in the category; it’s because most other states did much worse. Six states were awarded 75 percent or fewer of the possible points in four or more subcategories in this section. An additional three states received such low scores in three or more subcategories. In fact, only five of the 16 finalist states performed somewhat solidly in this category. Of those, only Delaware and Louisiana got 86 percent or more of the total 138 possible points.

Several states also did poorly on the 30 point section concerning whether a state has demonstrated improvements in student outcomes, including Tennessee. Ten of the 16 finalist states received 18 points or fewer of the possible 25 in this section, floundering in one of the largest single subcategories.

In summary, it looks like stakeholder support was only one variable among many that clinched the victory for Delaware and Tennessee. Other states’ relatively low scores under the data systems and “great teachers and leaders” sections allowed the winning states to stand out. This suggests that if some of the other states had strengthened their either of these sections, even holding union support constant or decreasing it slightly, they might have been able to bolster their scores enough to change the outcome.

So, the Race to the Top game may not be just about stakeholder support, but about the whole package. This time around, Tennessee and Delaware had the best whole package, thanks to some of the other states’ lack luster showings. Who will stand out next round? Will the losing states strengthen their teacher and leaders plans or sacrifice rigor for greater stakeholder support? Given the relative size of potential points in each section (10 points for support versus 138 for teacher plans), Ed Money Watch would suggest the former strategy.

A spreadsheet containing breakdowns for each state’s score can be downloaded here.


[1] We are defining “high marks” and “vast majority of points” as receiving 95 percent or more of the possible points. Admittedly, some states did score very poorly on this section. Georgia, Florida and the District of Columbia received 7 points or fewer of the possible 10 for stakeholder support.


The Status of State Fiscal Stabilization Fund Phase 2 Applications

March 30, 2010

Back in November of 2009, the Department of Education released the Phase 2 application for the State Fiscal Stabilization Fund (SFSF), a $48.6 billion fund created by the American Recovery and Reinvestment Act (ARRA) to help states fill budget gaps. This extensive application required states to declare the public availability of specific education data or devise plans for making that data available by September 2011. Since then, we haven’t heard much about the outcomes of those applications besides a few press releases from the Department of Education (ED). But it turns out, even ED is a little confused on the status of the applications.

Based on ED’s press releases, 15 states’ SFSF Phase 2 applications have been approved so far. New Jersey had the first approved application back in mid-February and the most recent approvals were announced on March 25th (Tennessee and Delaware). It appears to be somewhat slow going for these application approvals.

But the ED online listing of submitted and approved applications tells a different story. According to that list, all 50 states, Puerto Rico and the District of Columbia have submitted applications but only three states – Illinois, Massachusetts, and New Jersey have been approved.

This discrepancy is somewhat disconcerting. This second phase of the SFSF will distribute as much as 33 percent of the $39.8 billion Education Stabilization fund (81.8 percent of the total SFSF) or about $13.1 billion. This is not an insignificant amount of money and all the talk about transparency and close reporting of ARRA spending would suggest that oversights like this shouldn’t happen.

To get to the bottom of this Phase 2 mystery, we compared the most recent Education Stabilization fund data on current obligations (as of March 19th) to data on total Education Stabilization allocations under the ARRA from the Department of Education. These data revealed that the Department of Education had obligated the full Education Stabilization fund amount to nine states as of March 19th and all of these states received approval for their Phase 2 applications before that date. As a result, the 6 remaining states whose applications were approved after March 19th would do not yet show complete fund obligations for Education Stabilization. So, it appears that 15 states have indeed had their Phase 2 applications approved (a subsequent conversation with a staffer at the Department of Education confirms this number).

This means that the online listing of approved applications is woefully out of date. Illinois and Massachusetts received approval for their applications on February 18th, more than a month ago. No new approved applications have been posted online since then. If ED is dedicated to full transparency and quick-turnarounds on all aspects of the ARRA, then why are they being so slow to post these approved applications? These applications provide important details on education data availability. Hopefully we’ll get to see all of the approved applications soon.

Are Federal Stimulus Funds Saving Education Jobs?

March 23, 2010

The Center on Reinventing Public Education at the University of Washington recently released a report, K-12 Job Trends Amidst Stimulus Funds: Early Findings by Marguerite Roza, Chris Lozier, and Christina Sepe. The report attempts to determine whether federal stimulus funds distributed through the American Recovery and Reinvestment Act (ARRA) have met the bill’s stated goal of saving and creating K-12 education jobs. They found that the federal stimulus funds have saved states from making massive cuts to the education workforce, but have not led states to create new jobs.

The authors began by determining the overall trends in education jobs from school year 2009 to school year 2010. To do this, they compared published 2009 jobs data to mid-year jobs data for the current school year from 21 states. The authors determined that K-12 employment declined in 13 of the 21 states from 2009-2010, and grew in 8 states. On average, they found that K-12 job availability declined by 1.4 percent. By applying this proportion to the national K-12 workforce, the authors estimate that 87,019 education jobs have been lost nationally.

Next, the authors performed analyses to determine the proportion of K-12 education jobs that are supported by ARRA funds. They used 2008 employment and expenditure figures to determine total expenditures per employee, adjusted the figures to 2010 levels, and compared them to reported ARRA expenditures for the 2010 school year. Using this model, they determined that 342,758 jobs are funded by ARRA in the 2010 school year – about 5.5 percent of all K-12 jobs.

It is clear from this analysis that ARRA funds have saved states from making much more dramatic cuts to the K-12 education workforce. At the same time, however, it suggests that ARRA funds have not led states to create new education jobs. While job creation was an explicit goal of the ARRA, new on-going expenses would have created funding cliffs when ARRA funds expired and state and local funds were not available to support them.

The authors conclude that, despite the job savings from ARRA funds, public education is experiencing its biggest employment decline in years. Because younger, less experienced teachers are usually pink slipped first, this is likely to mean an aging workforce, a spike in average remaining teacher salaries, and gaps in pension funds as fewer younger, lower paid teachers enter the system.

ARRA funds are set to expire in 2011. Ed Money Watch will be watching closely to see whether struggling states will be able to maintain the current K-12 employment levels without federal stimulus funds. We are also curious to see what the declining education workforce will mean for students. Will hiring freezes keep new, talented teachers out of classrooms? Will an aging workforce be able to keep up with the demands of public education today?

The Status of ARRA Education Funds

March 11, 2010

It’s been a while since we last looked at the status of the education funds allocated through the American Recovery and Reinvestment Act (ARRA). As we have discussed before, the ARRA allocated nearly $100 billion for education programs such as Title I, Individuals with Disabilities Education Act (IDEA) State Grants, and a new program called the State Fiscal Stabilization Fund. Last we looked at U.S. Department of Education data on the obligation and disbursement of these funds in September, things were moving a bit slow. Six months later, it appears that while some funds have gone out quickly, others continue to lag.

As of March 5, 2010, the Department of Education had made nearly 73 percent of the $98.2 billion in ARRA education funds available for states to spend (aka obligated). Of that obligated money, the Department had disbursed 50.8 percent, or $36.3 billion, to states. This means that less than 40 percent of total allocated education ARRA funds have actually left federal coffers for expenditure.

Almost all of the currently available Pell Grant funds (about half of the total obligation) have been disbursed to the states for use. This is not surprising because Pell Grants are automatically distributed via a formula to students that qualify for the grants. States do not need to apply for the funds and the disbursement process is relatively streamlined and familiar. Pell Grants are also disbursed at the beginning of each semester, meaning that all grants for the current school year should have been made by early 2010. The remaining half of the allocated funds is likely to go out to states just as smoothly as soon as the 2010-2011 school year begins.

In contrast, the Department of Education has been disbursing both Title I and IDEA funds relatively slowly. Back in September, only 12.2 percent of Title I and 9.4 percent of IDEA funds had been disbursed. Six months later, those disbursement rates have increased to 22.8 percent and 24.0 percent, respectively (while the amount of obligated funds has doubled). As we’ve mentioned before, this slow rate of disbursement could be attributed to onerous application processes at the state and local level for funds and the monthly process by which schools and school districts pay for employees and other services. This is troubling because summer break is fast approaching, meaning that stimulus spending for the 2009-2010 school year will soon begin to wind down. Similarly, the ARRA funds are set to expire on September 30th, 2011, giving schools and school districts a year and a half to spend more than three-quarters of the total Title I or IDEA ARRA funds.

State Fiscal Stabilization Funds (SFSF), on the other hand, appear to have been disbursed at a sensible speed. As of March 5th, 59.9 percent of Education Stabilization Funds and 47.5 percent of Government Services funds had been disbursed to states. The relatively high rate of disbursement can primarily be attributed to the high need for these additional funds at the state and local level to fill budget gaps and the fact that the funds were disbursed through existing state funding formulas. Is it expected that states will spend the vast majority of their SFSF monies by the end of fiscal year 2010 with only a few states allocating remaining funds directly to school districts through Title I formulas in fiscal year 2011.

Of course, the Department of Education has yet to disburse any ARRA funds for some programs. These include Teacher Quality Enhancement grants, State Longitudinal Data Systems grants, and Investing In Innovation grants. Additionally, the only funds that have been disbursed for Race to the Top grants are likely for honoraria for reviewers and other administrative costs. These programs are all competitively awarded based on state and local grant proposals. However, they make up a relatively small portion of the total ARRA education funds.

Clearly, the life-span of the ARRA is far from over. More than half of the total funds allocated for education programs still need to be disbursed to states and spent at the local level. At the same time, school systems around the country appear to be in desperate fiscal straits as state education budgets continue to take drastic hits. Will the current ARRA funds be enough to fill these gaps? Or will the Congress need to pass another stimulus bill to keep schools afloat? Ed Money Watch will be following this process every step of the way.

A Closer Look at Race to the Top Front-Runners

March 2, 2010

The U.S. Department of Education is expected to release the names of the first round of Race to the Top finalists sometime this week. Race to the Top is a new $4.35 billion competitive grant program that provides states with funding to support innovative reform practices. Since the program was signed into law as part of the American Recovery and Reinvestment Act, there has been much anticipation of this announcement, and no shortage of speculation on which states are most likely to come out on top.

Ed Week’s Michele McNeil and Lesli Maxwell think that Florida, Louisiana, Massachusetts, Illinois, and Tennessee are most likely to be awarded grants (in that order).

Thomas Carroll from the Foundation for Education Reform and Accountability is favoring Florida, Louisiana, and Tennessee and has high hopes for Colorado, Delaware, Georgia, and Michigan, as well.

Andy Smarick at Flypaper (from the Fordham Foundation), while not naming specific states, is betting that no states with significant rural populations will receive grants. He similarly thinks that states that received assistance from the Gates Foundation and right-to-work states are more likely to get funding in the first round.

These predictions, for the most part, jibe with our assumptions. Florida is often considered on the cutting edge in education, particularly with respect to data usage and availability and teacher assessments. Louisiana also has a strong reform resume with respect to school turnarounds, and Tennessee has been working with value-added models for teachers for years. The predictions do, however, overlook states like California that made major legislative changes to become more competitive in the hopes of winning a Race to the Top grant.

We put together some data on these states and compared them to the other states that aren’t typically mentioned as likely winners. Here are our observations:

  • All but Delaware are considered states with relatively large populations – in the top 25 in terms of student enrollment as of 2008.
  • With the exception of Louisiana, each of these states typically receives small amounts of federal funds per pupil (less than $1,000 in 2008).
  • These states are relatively evenly distributed across the spectrum of per pupil expenditures in the country. Massachusetts spent the most per pupil in 2008 at $12,857 and Tennessee spent the least at $7,129. Seven states and the District of Columbia spent more than Massachusetts and only two states – Utah and Idaho – spent less than Tennessee.
  • The states are mostly concentrated in the middle of the pack in terms of school-age children living in poverty. Only Louisiana is in the top ten most impoverished states at 23 percent and Massachusetts is in the bottom ten at 11 percent. Unsurprisingly, this pattern is reflected in the states’ free and reduced price lunch participation rates.

What states are you betting on? Any more interesting patterns you see among the likely winners? See the full dataset here for information on all 50 states and DC.

What the Senate Jobs Bill Means for Education

February 23, 2010

Yesterday the U.S. Senate passed its version of what has come to be known as the “Jobs Bill,” called the Hiring Incentives to Restore Employment Act. The House of Representatives passed its version of the bill (H.R. 2847), called the Jobs for Main Street Act, in December with significant provisions for education. What does the Senate’s bill mean for education? Initial analysis suggests not much.

The largest provision of the Hiring Incentives to Restore Employment Act is a tax incentive program for businesses that hire previously unemployed workers. The provision would allow businesses to forgo paying Social Security payroll taxes on salaries of previously unemployed workers in 2010. Additionally, if these businesses keep the new employee on for a year, they will receive a $1,000 tax credit.

Unfortunately, the bill prohibits any “instrumentality” of the federal or state government from benefiting from the tax credit provisions. This means that K-12 public schools cannot participate. However, the bill does specifically state that public institutions of higher education can participate in the tax credit programs. But at this point, it’s impossible to tell if these incentives will be enough to encourage an increase in hiring at these currently cash-strapped institutions.

Additionally, the Senate bill does attempt to make existing tax credit bond programs, including those aimed at school construction, more attractive to investors. The provisions affect the two programs created or expanded under the American Recovery and Reinvestment Act (ARRA): the Qualified School Construction Bonds (QSCBs) and Qualified Zone Academy Bonds (QZABs). It does so by providing an “issuer allowed refundable credit” for the bonds, a benefit previously only allowed for Build America Bonds.

Currently, the QSCB and QZAB programs allow schools and school districts to finance school renovation and modernization by providing income tax credits to bond investors in lieu of interest payments. This means that while schools and districts would still have to pay the bond principle, the federal government would cover the interest through income tax credits.

The Senate bill would instead provide a payment directly to the school or school district that issued the bond worth up to 65 percent of the interest the schools owes on the bond. This credit can then be passed on to the holder of the bond – typically a bank or other financial institution – as an interest payment.

Unlike the existing income tax credits provided in the ARRA, the credits are refundable. In other words, bond holders that do not owe taxes, or whose income tax credits exceed the amount of taxes they owe, can use issuer allowed credits as subsidies, rather than tax credits. In theory, the move to make the tax credits refundable will make QSCBs and QZABs more attractive to investors. Under the current bond programs, investors must owe federal taxes for credits to have any value. The proposed changes mean that investors could still receive the interest payments even if they do not have federal taxes to offset.

Other than that, the only mentions of education in the Senate bill include a one-year extension of expiring tax benefits including: the tax deduction for classroom expenses that K-12 teachers may claim; the above-the-line income tax deduction for college tuition and other expenses; and the enhanced charitable deductions for educational donations.

Compared to the House’s Jobs for Main Street Act, which includes $23 billion in state aid for education jobs similar to the State Fiscal Stabilization Fund, the Senate bill is weak on education. In fact, it provides no direct funding for education services at all. Given the current state of education budgets across the country, this probably comes as a shock to many Governors and state education officials. Many of them are banking on additional federal funds to help them patch on-going budget holes and keep schools running.

Now the House and Senate need to reconcile the two different bills in conference committee before they can be sent to the president for his signature. Will conference committee negotiations produce a final bill that includes direct funding for education jobs? We will know soon.

Happy First ARRA-versary!

February 17, 2010

One year ago today, President Obama signed the American Recovery and Reinvestment Act (ARRA) into law. This economic stimulus bill included nearly $100 billion for education programs including Title I grants to local education agencies, Pell Grants, the Individuals with Disabilities Education Act, and a new program called the State Fiscal Stabilization Fund.

Since then, $69.7 billion has been obligated to states and school districts and $33.2 billion of those funds have been disbursed for expenditure (47.6 percent).

Additionally, according to data reported by recipients of ARRA funds, education funds have saved or created nearly 410,000 jobs including nearly 240,000 from State Fiscal Stabilization Funds alone. Based on these numbers, education funds have saved or created more jobs than any of the other non-education programs funded by the ARRA.

However, the ARRA has dealt a mixed hand to some states and school districts according to recent reports. Dramatic one-time increases in funds that will disappear at the end of fiscal year 2010 or 2011 are likely to create significant funding-cliffs for many schools. This means that teachers and other school staff whose salaries have been primarily supported by ARRA funds could be out of their jobs in a year or two. This will also likely be the case for public institutions of higher education that have come to depend on ARRA funds to provide basic services.

Additionally, provisions in the programs funded by the ARRA have allowed for some unintended consequences. For example, a provision in the Individuals with Disabilities Education Act (IDEA), which received $11.7 billion in ARRA funds, allows school districts that receive dramatic increases in funds to redirect state and local funds of up to half the size of those increases to general education purposes if they qualify under state guidelines. As a result, school districts around the country have lowered state and local expenditures on special education, a trend that will likely weaken special education spending in the future.

Beyond these formula-based programs, the ARRA also created two competitive grant programs intended to increase and encourage innovation at the state and local level: $4.35 billion for Race to the Top and $650 million for Investing in Innovation. While funds for both of these programs have yet to be distributed, they have both made significant ripples in the existing education landscape.

At this point, it’s still too early to tell whether the ARRA has positively affected education in the United States. But it is unlikely that American public schools and institutions of higher education will see another investment of federal dollars of the same size and magnitude. Let’s hope it will result in more progress than waste.

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