Teachable Moment: How Phase-Out of Stimulus Education Funds Impacts States

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(This post originally appeared on the States for a Transparent and Accountable Recovery blog).

As budget battles continue in state capitals across the country, a recent Associated Press report provides a stark reminder that the budget crunch will likely grow worse for public education. With $100 billion in American Recovery and Reinvestment Act education funds set to run out by September, state lawmakers are, in the AP’s words, “staring over the edge of a massive fiscal cliff.”  The likely result: thousands of teacher layoffs and the elimination of critical school programs across the country.

The end of stimulus funds means that a state like Florida that has proposed cutting its state education budget by 5 percent would actually have to face a 10 percent reduction in education funds, while states that have proposed marginally increasing their education budgets would still see a sizeable reduction in overall education funding.

The looming crisis will play out worst in states that used the temporary boost of stimulus money as a justification for making deep cuts to the state education budget, rather than reduce spending in other areas.  When Recovery Act dollars dry up, the harsh impact of those cuts will suddenly become abundantly clear.

To help the states adjust to evaporating stimulus support, the federal government approved a $10 billion Education Jobs Fund last year.  That money will undoubtedly help, but in the end the states’ “fiscal cliff” is far too deep to be bridged by these additional funds coming from Washington.

With the writing on the wall, news reports across America have begun to identify the critical role the Recovery Act played in protecting education and the devastating impact the end of stimulus support will likely have on schools. Consider these recent stories:

  • In New Britain, Connecticut, “more than 100 teaching jobs could be in jeopardy” following the end of federal stimulus grants, and the school board has already had to “cut full-day kindergarten down to a half-day schedule.”
  • In Cobb County, Georgia, one woman “lost her job despite being her school’s teacher of the year,” and was only rehired thanks to stimulus funds.  The Recovery Act ensured that many of the 9,000 teachers in Georgia who were projected to be casualties of state budget cuts kept their jobs or were rehired, but now their futures are uncertain.
  • In Fort Worth, Texas, trustees voted this week to lay off 80 education employees, including more than 50 teachers, “because the two-year stimulus funding or other short-term money paying for those positions was ending.” Nearly 30 other school employees opted to resign rather than be laid off.
  • Indianapolis Public Schools used federal stimulus money “to keep 147 teachers employed until May,” something Superintendent Eugene White described as “a privilege” that “we don’t have … anymore.”  The cuts will mean larger class sizes, although IPS hopes to keep the increase “manageable.”
  • Kansas Governor Sam Brownback indicated in January that “he wouldn’t replace exhausted federal stimulus money next year,” and proposals from Brownback and the state legislature would reportedly cut state aid by between $226 and $250 per pupil.  Even if the most modest proposed cuts are adopted, state education funding would fall by at least 3.8 percent, on top of cuts necessitated by the phase-out of more than $500 million in education funds that the Recovery Act has provided for Kansas schools since 2009.
  • The Ohio Education Association “estimates more than 10,000 education jobs could be eliminated in fiscal year 2012 because of the governor’s two-year budget proposal and other funding changes,” primarily the loss of federal stimulus money.

As perhaps the most glaring example of how the phase-out of Recovery Act funds could negatively impact vital public services, we’ll continue to track this issue at Good Jobs First.

It’s also personal for us: one of our staffers has a child who will enter a kindergarten class in August that is 50 percent larger than her sister’s class was three years ago.  Maybe some of those who denied that the stimulus made a difference will finally get it when they drop their kids off at school this fall.

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