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Tuesday, March 17, 2009

$3.25 Billion Boost ... Into the Budgetary Black Hole?

posted by Susan Peterson at 12:10 PM

Texas public schools could receive a $3.25 billion boost from the feds, members of the federal stimulus committee learned today … as long as the state doesn’t allow it to disappear into the black hole that is the biennial budget.

The federal stimulus package includes $40 billion intended to help states maintain their current level of support for schools. The funding will flow to states so they can “restore” the level of state funding provided to schools in 2008 or 2009.

The idea behind this piece of the stimpak is that many states will not be able to provide their share of funding to schools during the recession. Well, here’s an instance where Texas exceptionalism holds true: We can.

The Legislative Budget Board’s recommended 2010-2011 allocation for schools has not changed significantly from the last biennium, according to Dick Lavine, senior fiscal analyst for the Center for Public Policy Priorities. Under the stimulus act, once a state has “restored” its previous level of funding, the rest of the money should go directly to school districts. The amount of money each school district receives is based on the number of students receiving free or reduced-cost lunch. In other words, the needier the district, the more money it will receive.

Seems like good news: Texas can already meet its end of the school funding bargain, so most of Texas’ $3.25 billion slice of the pie can go right to poor districts to help them improve their services.

But Lavine is worried: “I’m very concerned that [the money] will be used to supplant state funds that were going to go to schools anyway,” he said. “There no federal regulation to determine the meaning of the word ‘restore.’”

Lavine added that no one on the receiving end (i.e. the schools) would notice if the federal funds were used to supplant state funds already designated for schools. The districts would receive the same money they were supposed to receive from the state – just no federal bonus, which they aren’t expecting, anyway. That would be a violation of the spirit of the stimulus act, since the education bucks are meant to, you know, stimulate schools’ activities.

Still, it’s written into the stimulus act how it’s supposed to go down: Restore last year’s state funding to schools, and the send what’s left over to schools. No way ‘round that, right?

It seems Lavine has seen his share of budgetary finagling. He says the amount of funding Texas provides to school districts is great enough that “three and a quarter billion just disappears in a formula like that.”

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