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Floodgates open to education stimulus funding and debate
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By Cristina Kumka Staff Writer - Published: April 7, 2009
Gay marriage isn't the only debate heating up at the Statehouse.
Vermont legislators and Gov. James Douglas are offering different plans for how to allocate the first wave of stimulus funding for education — about $39 million — and another $9 million for public safety or other government services.
Vermont's education system is expecting a substantial boost from the federal government — a total of $94 million over two years — but it's up to elected officials to decide where the money goes, not the state Department of Education, according to state officials responsible for overseeing the federal stimulus plan, officially the American Recovery and Reinvestment Act, in Vermont.
"The Department of Education won't receive any of those funds directly or the amount will be negligible," said Rae Ann Knopf, the Vermont Department of Education's ARRA coordinator.
The U.S. Department of Education says the ARRA funds "must be used to improve student achievement" but it's unlikely the first round of money from the government's largest-ever investment in educating America's children will make it into the classroom, according to Martha Heath, chairwoman of the Vermont House Appropriations Committee.
"Is the money directly going from this pot into the classroom?" Heath said. "I would say no."
The money
Nationwide, states are expected to receive roughly $100 billion for pre-K through college schooling from the administration of President Barack Obama through the ARRA — what the president tagged as the "largest investment in education in the nation's history."
In an April 1 conference call with reporters, U.S. Secretary of Education Arne Duncan said the first payment of $44 billion will be made to states immediately after they show a "commitment" to work on four key educational reforms — improving teacher quality, progressing toward college and career-ready standards, improving low-achieving schools and enhancing data systems to track academic progress.
"It's critical this money go out quickly but it's even more important that it be spent wisely," Duncan said.
It's up to states to regulate how the money is dispersed and spent but if "states aren't doing the right thing, they will simply eliminate themselves from competition," for future billion-dollar waves of funding that the government will award, Duncan said.
Out of about 285 line items in the federal stimulus package, Vermont's first influx of money tagged for education can be found in the State Fiscal Stabilization Fund, or SFSF.
According to information provided by the Legislative Joint Fiscal Office, the state is expected to apply for a total of $47.1 million from the fund in the coming weeks, to be used for two different purposes.
A potential first year amount of $38.5 million, out of a two-year total of $77 million to meet education shortfalls, will be granted to the governor's office after the state expresses its future educational commitments.
Another $8.5 million, out of a total $17.1 million, will be doled out for education, public safety or other government services.
But because Vermont supports every school district financially through the $1.3 billion state Education Fund, the way the stimulus funding is allocated has reignited an ongoing debate among education finance advocates and those seeking reform.
States aren't allowed to change the way they finance education in their state in reaction to ARRA influxes, according to Knopf.
But legislators and the Douglas administration are on opposite sides of the aisle when it comes to how much money is put where.
"The point of contention is what actually gets funded with the two pools of money," said the state's Chief Recovery Officer Tom Evslin, who is responsible for coordinating the administration's stimulus policy.
The arguments
Federal guidelines are clear that the majority of funds that states will receive must go to support public schools and institutions of higher education, according to Knopf.
But that support is being interpreted differently by legislators and the governor and neither puts the first wave of funding into schools directly.
Douglas is proposing to use the state's two-year stimulus funding of $17.1 million in government service funds for economic development — spurring job creation in a project he calls SmartVermont.
"The governor's view is that the one-time money needs to be invested for long-term gains," Evslin said.
The House Appropriations Committee's plan for the money, on the other hand, is for funding public safety, according to a proposal provided by the Joint Fiscal Office.
But the larger disagreement is the $77 million solely for education.
The governor is proposing moving the $40 million teacher's retirement fund obligation out of the state's General Fund and into the Education Fund, according to Evslin. Under Douglas' plan, the $38.5 million from the federal government will be put into the Education Fund to offset that switch, according to Stephen Klein, fiscal officer with the Legislative Joint Fiscal Office.
The House committee is not considering that transfer.
Under the House's proposal, the $38.5 million is split three ways — $23 million into the Education Fund to make up for a shortfall in revenue from other state sources, about $9 million to backfill the 2009 and 2010 budget reductions at the University of Vermont and Vermont State Colleges, and $6.75 million to fund growth in the teacher's retirement fund.
Under the House's plan, about $6 million would be freed up for job creation, one of the only similar points in the two different proposals.
"The real difference is not about where the ARRA comes, but how the teacher retirement and other reductions are handled," Klein said.
According to Heath, the Legislature has just started the process of deciding what to do with the stimulus funding in preparation for the state receiving a check and they "have a long way to go."
"We want to help make sure school budgets can be funded without increasing property taxes more," Heath said. "We didn't choose to fund teacher retirement with the money."
According to Heath, the only local school control over the first wave of funding may come in the form of an approximate $50 million in additional Title 1 or IDEA stimulus money for impoverished or disabled students.
"School districts will have the ability to make their own decisions on how to spend those funds," she said.
Under the ARRA law passed by Congress, the top priority for stimulus funding is "to do right by our schools and kids," according to the U.S. Department of Education.
According to a statement made by Duncan — "This money must be spent in the best interests of children."
cristina.kumka@rutlandherald.com
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