Ed Money Watch
Education Funding Rhetoric: The Budget Reserve Fund
When Congress took up the 2009 budget resolution earlier this month, Members of Congress gave stirring speeches about how the budget would "strengthen the federally subsidized student loan program" or carry out other education policies. Some pointed to something called a "deficit-neutral reserve fund" in the budget resolution as proof. The press also highlighted these reserve funds, writing of a "pool of funds" set aside for various education initiatives. Advocacy groups issued press releases touting policy success.
Anyone trying to make sense of the congressional budget process and what it means for education funding likely was led astray by these reports. Reserve funds can’t accomplish any of the things promised by lawmakers and celebrated by advocacy groups, although they can serve an arcane procedural purpose. But this procedural purpose is rarely why reserve funds are included in a budget resolution. The budget resolution doesn’t specify funding levels for any particular program, so reserve funds allow Members of Congress to point at a particular page of the budget resolution (the reserve fund) and talk about any sort of pet education project.
Arcane Procedure With Little Influence
Here is why the reserve fund can’t influence education policy in the manner that lawmakers would have us believe. (The reserve fund text appears on page 60 of the Senate budget resolution and page 34 (right) of the House version.)
The budget resolution sets a spending plan for the upcoming five fiscal years that loosely governs all legislation considered later in the year. When Congress adopts a budget resolution, each congressional committee (the appropriations committee and each authorizing committee) is allocated a slice of the overall federal spending plan. Procedural hurdles called "points-of-order" help ensure that legislation consider throughout the year stays within these allocations.
New Faces, New Education Funding Questions in New York
After being sworn in as the Governor of New York on last Monday, David Paterson went right to work on the state budget and its near $5 billion deficit. Education advocates are anxiously waiting to see how the new Governor approaches state education funding. Previous Governor Eliot Spitzer had promised to spend a lot more on education in order to comply with the ruling in a school finance lawsuit, and, equally important, to combine that spending with increased accountability for local school districts. Richard C. Iannuzzi, president of New York State United Teachers, said that Spitzer's resignation was "an overwhelming blow to a process that was under way with respect to equity in education."
Will Paterson continue the commitment to education funding?
Conversations in California on District Budget Transparency
In California, Governor Arnold Schwarzenegger's Committee on Education Excellence released its long-overdue final report last week with recommendations for reforming the state's K-12 education system in four areas: governance, finance, teacher recruitment and retention, and administrator preparation and retention. The finance section, titled "Ensure Fair Funding that Rewards Results," offers a number of good, detailed ideas for making state funding more flexible and student-centered, and better tied to incentives to improve learning.
One specific proposal in the report caught Ed Money Watch's eye: Recommendation 2.1.8—make school budgets more understandable. We believe that changing school district budgeting practices is a key first step in school finance reform. Education advocacy groups in California have been talking about this for a long time, and it's encouraging to see a state committee acknowledge the need for change. We hope that other states will take note.
Specifically, school districts need to report how funding is allocated—using the actual cost of resources—across all of their schools. Currently, districts do not report school-level funding figures, instead using district averages to calculate budgets. As the California report recommends, districts should "clearly delineat[e] the total resources (i.e., the financial value of the personnel, supplies, and services) that reach each school."
Outcome-Based, Collaborative, Non-Sexy Philanthropy
What would you do if you had $2 billion to invest in education? The New York Times Magazine asked a group of experts involved in education philanthropy. Their responses indicate how education philanthropy is changing—for the better. But the panel brushed over some important questions that any philanthropist should consider when making education investments. We drew three key take-aways from the panel's discussion.
Outcome-Based Accountability
All five participants agreed on the importance of making philanthropic investments more outcome-focused. In the past, philanthropists spent money less strategically, without requiring recipients to demonstrate that they used money effectively. Now, it's all about results. Most funders require concrete progress from their investments.
Advance Appropriations Limit Forecasts Education Funding Increases
As we discussed yesterday, both Houses of Congress took up the 2009 congressional budget resolution this week. The budget resolution serves primarily as a blueprint that shapes tax and spending legislation considered later in the year by Congress. One obscure component of the budget resolution can have a big influence on education funding for the upcoming fiscal year: the advance appropriations limit.
Both the House and Senate versions of the budget resolution would increase the limit on the amount of funding that the Appropriations Committees can appropriate through advances. The House sets the advance limit at $27.6 billion, and the Senate allows $29.4 billion—$2.4 and $4.2 billion more than in fiscal year 2008. What does this mean for education? It likely means Congress is planning on boosting education funding this year—but at the expense of budget transparency by using this confusing procedure.
What the Budget Resolution Really Means for Education Funding
The House and Senate are expected to vote tomorrow on the congressional budget resolution for fiscal year 2009, and debate over the resolution is becoming increasingly contentious. Do education advocates and the media really know what is at stake for education?
Both the House and Senate budget resolutions would boost discretionary spending above an inflationary baseline increase from the current fiscal year 2008 levels and above President Bush's fiscal year 2009 budget request. The Republican minority is not pleased, labeling the spending increase "huge" and "astonishing"
Loophole Makes School Finance Inequity Within Districts Possible
When the federal government started distributing compensatory education (i.e. Title I) funding in 1965, it wanted to ensure that federal money was supplementing, not supplanting, support to schools educating disadvantaged children. Thus, the government added fiscal requirements to Title I of the Elementary and Secondary Education Act that require communities to establish an even state and local school finance playing field within district — before supplemental Title I money is given to the highest-poverty schools.
For a school district to be eligible for federal funds under Title I, Part A of the Elementary and Secondary Education Act, it has to fulfill three fiscal requirements:
A False Alarm
Over the last several months, the student loan industry and its allies on Capitol Hill have led a campaign to persuade the news media and policymakers that Congress went too far last year when it cut taxpayer subsidies to lenders that participate in the Federal Family Education Loan (FFEL) program. The lenders and their friends argue that the subsidy cuts and tightening credit markets now are leaving students in jeopardy of losing access to federally guaranteed student loans. Don't believe it.
During debate last week on legislation to renew the Higher Education Act, for example, Congressman Howard (Buck) McKeon (R-CA), a friend of Sallie Mae and the student loan industry, sounded an alarm. “The impact of these cuts have yet to be fully realized, but already borrower benefits have been curtailed, lenders have left the program, and workers have lost their jobs,” he said. “The consequences of program cuts are being exacerbated by a crunch in our financial markets that has produced a loss of liquidity, an increase in financing costs, and uncertainty about the future viability of the federal loan program.”
McKeon didn't mention that JP Morgan Chase bank, for example, is making so much on federal and private student loans even after Congressional action to redirect excess taxpayer subsidies from banks to increased financial aid for students that Chase is voluntarily cutting interest rates and fees on federally-backed student loans and private student loans. He also didn't mention that any curtailed benefits charitably supplied by banks in the past have been redirected by Congress into massively larger Pell Grants and reduced undergraduate Stafford loan interest rates. And he didn't mention, that there is zero risk of federal student loans not being available to any student at any accreditated institution of higher education.
10 Questions on the Bush Education Budget
Ed Money Watch has some questions for the Bush administration on its fiscal year 2009 budget request for education.
K-12 EDUCATION
1) The administration proposes increasing No Child Left Behind (NCLB) Title I grants to school districts by 2.9 percent, essentially an increase matching inflation. It also proposes redirecting a greater proportion of Title I funds to high schools. Does this mean that school districts will have to cut Title I funding for K-8 schools, since districts will effectively receive the same level of funding as in the previous year? How will this affect student achievement in grades 3 through 8?
[slideshow] 2) The administration’s budget proposes shifting $100 million from the NCLB’s Title II "Improving Teacher Quality State Grants" program to a "Teacher Incentive Fund" program that supports state and local performance-based compensation initiatives and incentives for teachers to serve in challenging schools. These activities already are allowed under the large and flexible Improving Teacher Quality State Grants program. Why, when the administration is generally trying to consolidate programs and get rid of duplicative ones, does the budget slice off funding for this smaller duplicative program?
More Money, Lower Achievement in Durham, North Carolina
Durham, North Carolina. It's a medium-sized, old tobacco and textile city best known for housing Duke University. Most national media coverage of Durham focuses on the ivory tower that is Duke, its highly-ranked undergraduate and graduate programs, and of course Duke's basketball team. Rarely does anyone outside North Carolina get an accurate (or any) picture of the city itself and its own educational issues.
In the shadow of an elite institution of higher education, Durham’s K-12 public education system is struggling and often failing to educate its students. Only six schools out of 45 made Adequate Yearly Progress (met No Child Left Behind achievement goals) last year. Some 19 of Durham’s 26 Title I elementary schools are in school improvement status, meaning they have failed to make Adequate Yearly Progress for at least two consecutive years. Only 56 percent of Durham students graduate from high school.
There are obviously a lot of factors contributing to Durham’s poor achievement levels and high drop-out rate. But let’s take a closer look at the money going into Durham’s schools and see how its funding compares to similar districts in North Carolina.
Durham is spending $8,269 per pupil, which ranks 29th out of 115 school districts in North Carolina. About $519 of that spending comes from the federal government in the form of a NCLB Title I grant and IDEA special education grant.
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