Education Budget

At Ed Money Watch, we discuss and analyze major issues affecting education funding. In our Friday News Roundup, we try to highlight interesting stories that might otherwise get overlooked. These stories emphasize how federal and state policy changes can affect local schools and districts.

As Enrollment Grows in Utah, Budget Shrinks

Arizona Budget Shortfall Forces Cuts

Pennsylvania Universities Anxiously Await Decision on Gambling Taxes

Nebraska Legislators Propose Cuts to School Aid

Kentucky Higher Education Council to Vote on Budget Plan

When Congress passed the American Recovery and Reinvestment Act (ARRA), they included extensive data reporting requirements so that the public could closely track expenditures. Now that the recipient reported data on expenditures is publically available, tracking education funds should be easy. But as we discussed earlier this week, data reported by school districts and institutions of higher education is lacking in comprehensive information and is difficult to decipher. Unfortunately, state-level recipient reported data does not match previously available Department of Education (ED) reported data for many states, further undermining the value of the data. If the point of the data collection process was to provide accessible data on the progress of the stimulus, this data falls short of that goal.

ARRA recipients reported the total amount of federal stimulus funds they had received as of September 30^th, 2009 for all stimulus programs (except Pell Grants). This data can be compared to data ED reported on the amount of funds disbursed for the same programs. To do this comparison, we aggregated the recipient reported data on total ARRA funds received by state and compared it to ED's reports on funds it disbursed after subtracting any disbursements related to Pell Grants. We found a fair number of discrepancies between the recipient and agency reported data.

Last Friday, the first round of recipient reported Recovery Act grant and loan data was made available on the Recovery.gov website. Much like the previously released federal contract data, this wave of data lacks the comprehensive information needed to truly determine how the funds are being spent and from what source. The data are both difficult to decipher and include several instances of human error.

While working with the data we discovered several issues that make the data difficult to understand.  For example, less than half of all education-related data are tagged with the funding agency name "Department of Education." Other possible funding agencies include "Federal Student Aid," "Impact Aid Programs," "Office of Elementary and Secondary Education," "Office of Higher Education Programs," "Office of Special Education and Rehabilitative Services," "Office of Postsecondary Education," and "Office of Vocational and Adult Education."

Earlier this month the National Center for Education Statistics (NCES) released a preliminary report on graduation rates in the 50 states and the District of Columbia for the high school class of 2006-07. The report shows that graduation rates vary widely by state - from as high as 88.6 percent to as low as 52.0 percent - and by student race or ethnicity. Interestingly, the NCES figures differ from the graduation rates most states report under the No Child Left Behind (NCLB) Act. In fact, 14 states claim to have graduation rates at least 10 percentage points higher than what the national standard shows. (Data for both nationally and state defined graduation rates can be accessed on the Federal Education Budget Project website at www.edbudgetproject.org.)

State education agencies across the country just completed the first round of reporting for the American Recovery and Reinvestment Act (ARRA) programs, an onerous and massive undertaking. Unfortunately, the quarterly reporting process is not likely to get any easier for states from here - on December 1^st, 2009 the Department of Education (ED) will require districts to report local and state expenditures at school-level for the 2008-09 school year, the first time such data has ever been required for any program. Rather than tracking federal funds like the majority of ARRA reporting, the school-level data will show baseline state and local funding at schools in districts that receive federal Title I Part A funds. As a result, this data could help determine whether districts and schools are using federal funds to supplement, rather than supplant, state and local funding.

Draft Department of Education guidance for the new school-level reporting indicates that any districts receiving Title I Part A funds will have to report school by school expenditures for the 2008-09 school year on:

Late last week the federal government released the first round of data on economic stimulus spending through the new website Recovery.gov. This preliminary data, which is reported by stimulus funds recipients, included data only for federal contracts as opposed to grant and loan programs. Very few education contracts have been awarded thus far because the majority of education stimulus funds go directly through local education agencies and institutions of higher education. However, the data does include information on 16 contracts made through Department of Education programs. Unfortunately, this data is not detailed enough to provide comprehensive information on how the funds are being spent and from what source, suggesting that future waves of stimulus recipient reported data may not be as useful as we had hoped.

These 16 contracts amount to more than $27.7 million in stimulus funding distributed by 11 states including Alaska, Kansas, Massachusetts, Minnesota, Nebraska, Oregon, Pennsylvania, Tennessee, Virginia, Washington, and Wisconsin. Thus far, the contracting organizations have received $1.9 million (6.9 percent) of the total funds. According to the data reported, these funds have either saved or created 162 jobs. (A table containing this information is available here.)

This morning, Pre-K Now released its annual Votes Count report, which summarizes state legislative action on pre-k during the 2009 legislative session, including pre-k funding in states' fiscal year 2010 budgets. This year's report focuses on which states have maintained and even increased pre-k investments despite budget shortfalls caused by the past year's economic pinch, and which states are falling behind.

Overall, Pre-K Now says that "the news for young children is surprisingly good." 27 of the 38 states that had state-funded pre-k programs in fiscal year 2009 (as well as the District of Columbia) managed to either increase pre-k funding or maintain current funding levels. That adds up to $187 million dollars of new money for pre-k in fiscal year 2010. Further, of the 10 states with the biggest budget shortfalls this year, seven managed to either increase or maintain their pre-k spending for the 2010 year.

The report groups states into 5 main categories:

The White House Domestic Policy Council (DPC) with the U.S. Department of Education (ED) this week released the report "Educational Impact of the American Recovery and Reinvestment Act." The report paints a rosy picture of the effect of American Recovery and Reinvestment Act (ARRA) funds on state education spending and reform.

ARRA funds have no doubt helped states make ends meet during the economic downturn. But our work (here and here) suggests that, despite a positive impact on education spending, the full effects of ARRA remain to be seen due to the slow rate at which states have disbursed funds to school districts.

States this year have been faced with tough budget choices, and Pennsylvania certainly did not hurry in making its decisions. At long last, however, stakeholders in early education can relax: the 2009-2010 Pennsylvania budget is in, and early ed was not a victim of this year's budget crunch.

Gov. Ed Rendell signed the budget into law last Friday, thus ending the longest budget delay in any U.S. state this year. It was passed 42-7 in the state Senate, after a 101-day stand-off in the legislature.

The $2.62 billion budget slashed $500 million from 2008-2009 state spending levels and includes a $300 million spending increase in general education funding. This boost in education funding, along with the lack of broad tax increases in the 2009-2010 budget, may prove the most popular piece of the new budget.

THIS POST HAS BEEN UPDATED.

The Federal Education Budget Project (FEBP), Ed Money Watch's parent initiative, provides a wealth of state and school district level data on federal funding, demographics, and achievement through its website www.edbudgetproject.org. These data can tell important stories about how federal education funding interacts with student demographics and achievement. Moreover, the data often reveal rarely-discussed idiosyncrasies in federal funding and education. From time to time, Ed Money Watch will take a close look at one aspect of the data available through FEBP to highlight the value of this information.

This week, we'll take a look at federal Title I grants to local school districts and student poverty data available through the FEBP database. Title I Part A is the largest federal K-12 education program, providing more than $14 billion annually to local education agencies (LEAs) for supplemental education services for students from low income families. Title I funding data reveal formula flaws that significantly skew the relationship between poverty and funds received. In fact, the Title I formulas are considered a relatively opaque and inaccessible process that few education stakeholders understand.