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CENTER. 'ON EDUCATi.ON

I 0Qi I Conlill~tti:CJjJt Ave .• NW. Suite 512 Was:hingron. DC 200\3,6

, POL'lCY CEP'

phone ~:L811.SOGS

email (;ep-d~@~e;p-dc-O<F:!l fax 202_821.6008

web www:oe>p-iI!lc.org

May 19,2009

The HomOl'illIlble; Am.e Duncan Secretary of Education

U.S" Department of EdJl!u::atioli1 400 Maryland Avenue. SW W~shingtDn~ DC 202()Q

On. Apri13f~th,the Center-on Education Po~icy ,(CEP). a natioMrn.l1on~p:r-ofit orgenizatioa that serves as an independentadvocate forpublic education and for mere e«ect~v'e pub~icschools, held, a forum to discuss the impact of the economic stimulus funds on the 'federal role m .elementary and secoudsry education ..

The forum heatrd prese:l],W!ltrioil]!S f:rom. a di verse p';rne:~, of leading education policy expeIts from the American Asscciationef School Administrators (MBA). the Council o,fCbi!ef State School Officers (CCSSO). the Council ofGre-art City Schools. (OOCS), the NatwoIlIal Governors. Association (NGA)m1d file National School Boards Association (1\!SBA)" Both a vvritwlt1l. tr~crip( andanaudio file of the 'Corum are available on our W,eb site: l~.ttp:f /~ .. oef!~dt .orgfin.de'X.cfm ?1.1JSf~aJ.ctjon=PaJge. view pa_ge&pOjlg~ld=S:3 o.

Based, on the forum, mWl:Uil)! to shasewith you theeonceras that were expressed aoom implementation (If the education programs inthe American RelCQ<vel!'Y and Reinvestment Act (ARRAJ" sswell as some suggestions for imprcving the implemenlmlt10n of this very hnpertaat Act.

A] l of the organ~za,t]'Q.ns represented on the pane], expressed appreciation {OJ! tbe unprecedented influx of edueatien funds for the public schools. As, )"on know, public schools will receive the b!iirge majority ef'funds fro~IB.~he $53-6 billion State fiscal Strubi]izat!on Fund, as wen as over $27 billion from ARRA.. foods provided for T~.Ue I, Tide I School Imrn:nr.ov,em.eNl[ Grares, the Individuals with Disabilities lBd,uc:aJtioiJ1!i Ac~. (J_D:EA)~ Enhancing: Education Threogh Technology SWlt:e Grants.tbe Teacher Tnoen:t~ve Fund" ImlP'sct Aid Construction, and staee data. systems .. C[e.aIdYl' without thosefunds, the

nation's schools and students would have been forced to layoff hundreds of thousands of teachers and other empk,yees, as well as cut back or eliminate a br-oad range of programs ,and services ilialt benefit chi ldren, In addition, based. on comments at our ferum, ARM .a,pe.:rurs to, be fostering increased. coHaboraticm between governocs and chief' state school ·offioe.rs on education policy and programs.

Y'OllJ and your staff areto be commended. for the ineredi ble job you have done ]n moving. Qjl!:dckly> efficiently OOldtta:lilJsparenUy on ~mpienlenmtion of ARRA, In lesstban three months you have distributed or made available for dis~ri bution approximately j].llI&f of the AR.RA. funds, Jssued detailed guidanee for most, of the; prog['am.s,~ provided theapplication for the State Fiscal Stabilization Fund and approved several states"appHc1.ttians:,. provided fact sheets and slide shows anda guide to local uses oi funds. and held .111r!D1e.fO'US meeting.') and briefings for the edueatinncememmity,

However, what we learned alt tbe forum, aJB wellas from oiher conversatinns wi~h edluca:tors aJIDld news reports, there i s :s~m much confusion and anxiety over use of the ARRA. funds.

eowple:xiily and. Confusion

Much of tms, confasioa a!rises froenthe fact that AIDUtt\provi des funds, for annmber of e-x:isHn~g programs while ,aJt rhe same time creating ,a new program (the State Fiscal StabilizetionFund) th~t ~s now :~h.e largest federal source of fuads for K- Th. 2 education,

Sta~es~ scheel dis.t1l',k;;ts~ seheels, amd educators h,a,ve; to eontend whh:

.. mItl~]p]e p]lOgUmlS, eafihwith its own set of allowable uses and. fiscal roles Buell as ";supplement not supp.lant" rul.dimaioneflance: (If effQd;

• multiple time frames £0.1: distribution of funds from the federal govemment to stales and from states to school diJ stricts;

" multiple decisions-makers {the U .S. Department of Education. gove.mors. state legislaiures, chief s~Slite school officers, local !lchoo~ boards and edministraters, and, in some cases, local governments);

• multiple· years duril.1g whi!ch the money can be spent;

• the first tane use of existing state funding formulae to distribute federal education funds;

'.' wide variations in state budgets, both their f seal 81 tuationand how states fund elements '. and seeondarv ... ducatio .. ·

e_ m. n -lrY ml S C.."J]. -~J "" d_A>,.

• continued deterioration of most state budgetsrand

• new, and .aJS o:fyet, uadetermined fiscal and other reporting requiremeots ..

As a result of all this, acoordhrug to J eft' Simering of CGCS, , •... " school disndetsere not absolutely sure how much money they're, necessarily going to get and what is the range; of use thatili.ey)[e going to be allowed to do with those dollars, There's an amazing amount of mixed messages being sent .". about nhe stimulus dollars and. about the

~' . ] ..

SdmTIJ us programs ..

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At M'JIollier reeent fomm em the ARI'tA edneation funds heM. by the Brookings Insti union, ODeS CEO Mike Cassedy stated, ~~ .... the vast number of school districts at the local level have not actually seen a dimeof tru:s .money. .... But ~ t ~ s also veryclear tharJt~ in a number ofstates, local school districts won'tactuaillly seea lot of the state: c~nabmza!]on money ~ and. ifrtmkiy,.a lot. of thebig ci~y school districts have given UiP on the

poss]bmty that they"re Hk_£:~y to see large portions of the stabilization money." http://www.b]j\ooldngs.edl~/-/media!Fil,es/events/2009/05] 1 duncan/20090511 ed:lJlca.~ion.

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C.ooftietJiog Purposes ,of ARRAFunds

Another major challenge in implementation is tension, and. possible conflict, among the fourprr.inc:~p~es you set forth that guide the use of A.RRJ\.fuJ:uJls~ and the bro~o1!uses of the funds, Severalpanelists raised conceznsabeut ]],()\V AR.RA funds can simultaneously be: spent qu~ck]yto ereate and. save jobs, thOllgbrtfu11y~o avoid the funding cliff, and, at the same time". to advance key edneation refarms.

The eoneern abaut using funds to aehieve the reforms outlined in the ARRA po~icy assurances is heightened by the fact thaut etates continue to face enormous budget deficits, Ac-eoming to oocent reports. by the Nalt~o'lltlil Cenference of Stale Legwsb!!!~lI!:res {NCSL)

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Q.1!u:p:Jf'iN'\¥W .~'lc:s] .'Org/pw'l:l:wmns/pl;"essf2009tpril'42..309SBU09 Jltm) and! the Council of

State Govemments (CSO)

(http,:/lv,I"\'\"'W.slcatlant:a.OJrg!Pub]i.cationslr A;OO{Fi scali M iaJni fL.mif)~ :SUlt:®S are expected to see cumulative budget deficits in fiscal year 20lO between $[21 and $14\5 biHion, while fl~cal year 20m 1 PJT{)jeCJ~ed deficits mayapproech $180 bi~lion.Acoo:r-ding to Dane Linn from NGA who spokeattbe fonnn, 49 s~auwes. nnwhave budget deficits, CSG IDS!,) found that 26 :s~a,~es have Clift spending this year on elementary and secondary education, while 32 have done SiD :for higher education,

As Gene Wnhoi~~ executive director (If CCSSO,. sttated. at o'U![ fcrum, '~S.O whatwe're gorng~o get out of this first stimal us money I believe •. is am. e.mphaJs~s on thefirst part of this, the recovery part of the ]IIDitis,t]v,e. Not so much em. the reformin those states. they simply are ]'US!t trying~o survive."

SustaliRability of S,en':liee.sllud Rdor:ms

Another concern espressed is how school districtswill beeble to sustain programg!~ serviees, and reforms they implement w~th ARRA "Funds" since the officials at the. U.s. Depanment of Education and the 'White House have repeatedly stressed the one-time Illia:ture of these :funds .. Tlri:s may ben p,mi1:icu]a:r problem with IDEA. According [,0 Mary Kusler of AASA., '-' ... , school districts cannot use the ~nEA money to expend services, to create a .higher level of servicesthat they financially are not going to be able to keep goiag after the ~~m1l1!~.us money disappeass, Because then. Mley would! have created a: higher level of services and be subject te liability when they' d. have to cut back those services,"

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Supplanting

As yOilm are wellaware, there ~;s deep eoncem about botb states and. local governments reducmg ~heir spending for educationbelow the required maintenance of effort levels, AOQord~ng~Q AASA,. ~~ .... we have an ircreasing c:a1t!eg.ory of ststes tba.t are absolutely positively .• I win not tale any explanations otherwise, supplantingtheir drafts in edUciillt]Ofi wIt'l1 this money . •• CGCS eunfirmed thisceneem, '~ ... we· are seeing moat least it's being threatened to happen over and over find over again."

There have also been reportsthat when: counties or (Idler local gcvemmeras control schooldistricts' budgets. such as in Virginia, that local supplanting is also ~~king place.

IIDEA 50Per-ceut li'leXn)il~ty

Aller enactment of ARRA.. many school districts were hopingto take advantage of me provi sion in m'EA (Section 613) thart allows local school districts to reduce their shareof spending on special education from local or state and local SOIJ!F',ces by ]!1.p to 50% of any ~:I'l.c:r~$e infederal IOEA fulndmg .. Especially since tbe Stal~~ Fiscal Sta:bi~izaJil:ion. Food will only restore state support ~or education, local districts foc~ltilg. reduced revenuesfrcm local sources, werehoping to, be sble to use tlle'·:frood·~ll!iP·· tocalfands for other educstional purposes.

H()wev,er~.at; both AASA and coes pointed. out at the forum, dneto another provision in UJEA (Section 616(t): State Enforcement ~- If a State educational agency determines

that a Iocca] educatienal agen.cy is no~ meetingthe reqlill:iremeJl~s oftll1is part, including the targets in. the Stare's performance plan, the State educational agency sbaH prohibit tlle local educ-aitiona.1ageDcy fromredacing thelocal educetional agency's maintenance of effort under section 613(a)O)~C) £orany fiscal year), large numbers of school districts are flilldrnngth.ey wm be pruhibited from utilizing this :5 0 percent flexi bU]ty. Aocording UI CGCSj .~ ••• we've gail mterpretations by the Department, we have state accounesbilityand performance system that are so elaborate that they may prevent us front doingthatkind of tllling."'

RECOMMENDATIONS

,. The U.S. Department of Education sh()1,Jl]da.ckJ]o\~dedge thst states and. school distrlcts are; contimringso illa.ce serious budget cuts and that ARRA funds can and. should be used to prevent layoffs and :pr"~gram8 cuts. As Vice President Biden sf.wtOO in. his firstrepente President Obama on ARRi\ implementatian, "The primary purpose of the Recovery Act is to create and. retain j obs by promoting sound eoonmmcrec()very."

httpHwww .reoo ver~y. gov/s Resldef-a!.ultfflilesfF1'N ALQ]. ARM Report. pdf

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• Ibe De[partmemt sbould. continne to' meke de« dmt ~t win not tolerase states and local governments to circ~mveJ]!~ the insent of .A..R:RJ\by reducing spenclin;g below the maintenance of effbrt levels.

• Weelldy conference catls ,or webinars should be ini tiated!. betweenthe u. S.

De]p'8irtment of Education and. the brolSid. range of stakeholders invol ved in. ARRA implementation~'I1 crdertopmvideupdates, hear eeneernsfrom the field and Eespond to questions.

• The U.S. Dep.lttme:11Ji1t of Edueation should bring together represensetivee of both the educatien oommunltyood sta~epoHcYffiiak!ers (suehas NGA~ NCSL~ CSGj. N ASlIBO) fur discussions on ARR..A. imple_mentat~on.

• States should be encenraged to bring together on. 81 regu~ar basis representatives of thevarious stakeholders Mth~he state. This Is already eceurring in some states, as waspointed out by NOA at ~he forum,

• The U.S. Department nfBducatien'sten regional offices soould hold regiona~ {omms. and briefings 011 ARRA .

., The U,S" nep<3rtmen~o:f Educatien should wod:::. w~th the education community to review ~he rules on the I.~miralions on local school districts urilizingthe IDEA 501% fie-xibmty to tty in erder to ~ddJl\ess the concerns expressedat the forum cwithuut diimmlisillng services for srudeIl!.fs w~tllil disabilities.

'. 'l'.!I),e De~a~eut should. provide ARRA guides targeted to practi tioaers at the loeal level, iHcludin,g elassrocm teachers Mld school principals,

.. Officiah: il1JJ~b~ Obama Adm inisnation should make clear that (he President is. committed ~o f'urt.1:H'l!' mcreases ,a!1i)o,ve the pre- AR'RA FY • 09 levels f'arlD EA and Title L Doing so wiU help alleviate some o:f ~he: a_nxiety over the :fuml~ng cliff You :rllay 'ii'/ant to highlig:l1t this :smremeWlt nom the FY 20i ()'D'eparlmenlof .Etittcatio'n Justifications of Approprtatio.n .Esthmltes to the Congrefis. "The President's 201 I[) budlg~~, announced in February ~<'l!ssumes .significant increases in overall (UscretIo.n_l' rUF.ld:~ng fur Department of E:d'u~lt~on progm-Blms in fiscal years 20m 1-2014. Tide I Grants to. LEAs will likely share inthose increases, paJl1icul~r~y Qll;ce the pro gram ]s resuthorssed to reflect the Admi]lisn:aJ~Mo:n.· s priorhies. ~)hup.:fl\V\.V\¥."ed .. gov!abo1!lth)vervIewlbl!ldget/bl!ldge11 Dli us!]'ncati owae,d.fhrdis.~df

.. 1'0' the maximum extent possible, the U.S. DepartmeotoiEducation should exped~te the issuance O[ the remaining guidsace documents, themetrics to be used tnthephase 2: stabilizationfund allecations.and the decumentatinnther statesaad districts will need topeovide to receive the seeend half of their UJEA and Title I funds.

,.rffile U. S. Department of EdlllcaJtionsfioiUld work with other federal agencies that have funds for educath)n~relaled pr-o'gw-,;r..m.s (such as Head Sttart aad EarlyHead SiWJt. in the De:pIflm.efWIt '0:[ Health and. Human Services and the two school ecnstrnction tax eredit bond. programs in Treasury Departmera) h) .en:SI1!,1]1e ,eoordinationOOlong t)_jJesepoogr.tlI1ms. Perhaps j Glint guidanee o·[!" suggestions on how ~coools, CfjJD. ~Il!regr,ate funds from these prog!iaJmsa~t~he local level should !he iss.ued.

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CEil' hopes ~ ooIlbltmueto monitorthe implementation of ARM. and looks fOl1'wam tOI working with youaLnd o,theJ!.' officwrus at tiile u.s. Department of Education .. i\gajn oon~a'rulatIO[lsfur aU the wort:. that hes been done withthe ARRA, 3J])d we are offering th~s summary o,f our forum and suggestions foraction as awa.y ofbeh1g of ags~s~ancero, yO]] as you continue your work.

Sincerely,

1l~:J J.cl<~go J

: resident and CEO