Education Funding

Pennsylvania Governor Tom Corbett’s budget plan would give more money to schools, but most would go to pensions

Michigan’s 3% proposed funding hike for public universities tied to performance

Florida House approves $69 billion state budget

Missouri Governor Jay Nixon adds $40 million to proposed higher education budget

Pennsylvania Governor Tom Corbett’s budget plan would give more money to schools, but most would go to pensions
Pennsylvania Governor Tom Corbett this week released his fiscal year 2013 budget proposal. The plan would include $10 billion for public schools, 3.4 percent more than K-12 education received in fiscal year 2012. Most of that new funding, though, will be directed to teacher pensions. Funding for school districts and special education programs – $5.4 billion and $1 billion, respectively – is virtually the same as in 2012, and the state pre-K program will lose about $5 million from 2012 levels. In fiscal year 2012, the legislature avoided significant cuts to the K-12 budget by reducing spending increases in other areas, including welfare; legislators said that would not be the case in this year’s budget. In addition to the effective cuts to school districts for public K-12 education, Governor Corbett proposed a 25 percent cut to state colleges and universities. More here…

Michigan’s 3% proposed funding hike for public universities tied to performance
In his fiscal year 2013 budget proposal, Michigan Governor Rick Snyder will include a provision to increase funding for state universities by 3 percent. However, the funds will be divided according to a formula that accounts for growth in college completion rates, number of students graduating in particular fields, number of students receiving Pell Grants, and the degree to which schools are able to avoid tuition hikes. In fiscal year 2012, Governor Snyder’s budget also offered incentives to restrain tuition increases, only cutting state aid by 15 percent for schools that held hold tuition increases to below 7.1 percent as opposed to 22 percent. Michigan’s state aid to public universities has fallen in recent years – per-undergraduate student state support has fallen from $6,869 in fiscal year 2001 to $4,577 in 2012 – but this year’s budget reverses that pattern due to the small increase in spending. More here…

Florida House approves $69 billion state budget
Florida lawmakers advanced the state’s fiscal year 2013 budget process this week with a House vote on a $69.2 billion budget. The bill included a $1 billion increase for public K-12 education – not quite covering last year’s $1.3 billion cut to public schools – paid for with cuts to low-income healthcare programs. It would also raise college tuition by 8 percent and cut the Bright Futures state scholarship program by 9.3 percent. The bill does not include any new taxes to provide additional revenue. The state senate has not yet voted on a budget plan, but one moving through the chamber now would freeze tuition at the state’s public universities and increase it by 3 percent at public colleges. More here…

Missouri Governor Jay Nixon adds $40 million to proposed higher education budget
Missouri Governor Jay Nixon’s 2013 budget proposal, released last month, originally included a 12.5 percent, or $106 million, cut to higher education. But controversy over the spending reduction from Republican lawmakers and university officials led him to release an amended version of the proposal this week that adds back $40 million for state colleges and universities. College and university officials had warned that the budget cuts may force them to raise tuition, furlough employees, and limit course offerings. The additional funding will come from a state lawsuit with mortgage banks. A settlement in that case is expected to yield $140 million for the state; of that, $100 million will be used to aid homeowners, and the remaining $40 million will be spent on higher education. More here…

Science, technology, engineering, and math (STEM) have featured prominently in the Obama administration’s education policy priorities, most recently as the focus of the third round of Race to the Top funding. And it looks like it will play a big role moving forward: An announcement from President Obama at today’s White House Science Fair offers a peek into the administration’s fiscal year 2013 budget proposal, which will apparently include a spotlight on STEM learning. But the real story is buried behind the budget rhetoric – the president also proposes a new STEM focus to the existing Teacher Incentive Fund program, which will require no Congressional action.

The details on the budget request should not be ignored, of course. This year, says the White House, the president’s budget request will include a host of new and revitalized STEM programs. Among them is $80 million for a new competitive grant program to provide funding for STEM teacher preparation programs. The federal funds will be accompanied by private investments from a coalition of companies and organizations called 100Kin10; 14 members will collectively contribute $22 million to a fund dedicated to STEM teacher preparation and support, distributed by the group. These efforts are a follow-up to his 2011 State of the Union address, in which Obama issued a challenge to the education community to prepare 100,000 new STEM teachers.

The president will also propose a $100 million investment in the National Science Foundation to support new and existing programs to improve the quality of postsecondary STEM education. He will resubmit a request for funding for the First in the World program, now with a new STEM priority. The program would reward applicants with innovative ideas for improving college completion rates and lowering the costs of postsecondary education. And the president will recommend a joint Department of Education-National Science Foundation project to support K-16 education reforms through evidence-based approaches to mathematics learning. The project will be jointly funded, with $30 million contributed each from the Department and NSF.

But it is unlikely that Congress will even pass a budget for fiscal year 2013 before the fiscal year begins – many members will be busy running for reelection or consumed by the presidential election – so most of these proposals probably won’t see the light of day on the Hill.

Instead, the real story lies in the proposals that require no Congressional approval.

The Department of Education, promised the announcement, will continue to focus on STEM education in its next Race to the Top (RTT) competition. This refers to the nearly $550 million Congress appropriated for Race to the Top in its fiscal year 2012 budget. The competition, which is open to both states and school districts, is likely to take place later this year.

More significantly, however, the president announced that a portion of funding already appropriated for the Department of Education’s fiscal year 2012 Teacher Incentive Fund – $300 million – will be newly dedicated to improving “compensation, evaluation, and professional development systems for STEM educators.” These types of interventions have the potential to strengthen the STEM teacher force by attracting and retaining STEM professionals in teaching. And because the change will require no legislative changes, the Department can begin to implement it immediately, starting with the next round of TIF grants.

To improve general teacher quality, the president announced that the TEACH Grant program, funded with nearly $24 million in fiscal year 2012 to distribute grants to undergraduate students who plan to teach in schools that serve low-income students, will now target postsecondary students at top schools. The Department will also factor quality into its TEACH Grant distribution.

President Obama’s proposal represents a marked policy shift toward focusing on STEM, adding some weight to his rhetoric on improving STEM readiness. But most of the administration’s proposals are likely to be tossed aside if and when Congress starts its own 2013 appropriations process (as are most White House budget requests), particularly if Congress is weary of increased domestic spending. Given that reality, the president may have to rely on the Department of Education to head up this new STEM charge through programmatic changes to the Teacher Incentive Fund alone.

University of Missouri campuses seek tuition increases

Scene set for an Iowa school financing fight

Washington House GOP’s budget spends $580M more on education

Mississippi universities say financial aid running short

University of Missouri campuses seek tuition increases
A meeting of the University of Missouri Board of Curators held this week yielded difficult news. Facing a proposed 12.5 percent cut to state funding in the 2013 fiscal year, the campuses are proposing tuition hikes that will help make up the shortfall. The smallest increase requested is for three percent at the system’s Kansas City campus; the largest is 8.2 percent at the University of Missouri—St. Louis. The Kansas City Chancellor Leo Morton said that, rather than dramatically increase tuition, the school would try to recruit more students. Under Governor Jay Nixon’s proposed 2013 budget, the state university system will have lost about 25 percent of their state funding over the past three years. The Board did not vote on the proposed tuition hikes, but will meet again to reevaluate the hikes as the state legislature continues its budget process. More here…

Scene set for an Iowa school financing fight
This year, Iowa Governor Terry Branstad asked state lawmakers not to comply with a law requiring them to pass a state cap on public school spending within thirty days of his budget proposal to the legislature. The “allowable growth” limit, as it is known, is intended to provide school districts with a sense of state K-12 education funding for the following year so that they can plan district-wide finances. This year, Governor Branstad has proposed a package of likely high-cost education reforms, and asked lawmakers to focus on those reforms rather than set growth rates. He that the growth rates law should be repealed. At the same time, the Senate Education Committee approved a bill setting the allowable growth rate at 4 percent (one percent of growth costs the state approximately $31 million). The bill, however, must also be approved by the full Senate to take effect. More here…

Washington House GOP’s budget spends $580M more on education
A $13.7 billion budget produced by Washington state House Republicans this week included $580 million more for K-12 education than Governor Chris Gregoire’s budget proposal – at least, according to the lawmakers who introduced it. Democratic lawmakers in the state question that pronouncement, pointing out that Republican leaders didn’t specify whether the cost would be offset by cuts to social services, higher education, or other programs.  The bill runs counter to some of Governor Gregoire’s proposed cuts; it would maintain the 180-day school year, provide full funding at 2012 levels for tax-poor districts, and submit $340 million in state payments on schedule. The proposed budget is controversial, and the Democratic Chairwoman of the House Education Appropriations and Oversight Committee, Kathy Haigh, planned to kill the bill in committee. House Democrats and a bipartisan coalition in the Senate are currently preparing their own budget proposals, expected to be released later this month. More here…

Mississippi universities say financial aid running short
According to Mississippi Higher Education Commissioner Hank Bounds, state scholarship funds proposed by Governor Phil Bryant in his fiscal year 2013 budget are insufficient to cover the state’s financial aid needs. Affected students will include more than 20,000 recipients of the Mississippi Tuition Assistance Grant program. In fiscal year 2012, the state provided $31 million in student financial aid, including $26.9 million in state appropriations, which was supplemented by funds collected from student loan repayments. Governor Bryant’s proposed fiscal year 2013 budget would hold state appropriations steady at nearly $27 million. But according to the state College Board, between the ongoing needs of the program and increased state aid eligibility following changes to the federal Pell Grant program, the state’s financial aid fund will be short by almost 14 percent in fiscal year 2013. More here…

At Ed Money Watch we talk a lot about funding formulas for various federal grant programs. We’ve written about proposed changes to the ESEA Title II funding formula in the House Students Success Act, the need for improvements to the Title I formula, and even idiosyncrasies in the Individuals with Disabilities Education Act formula. Congress has designed each of these formulas to account for factors such as population size and poverty rates or numbers when distributing federal funds to states and school districts. But another factor – something known as “small state minimums” – always seems to run roughshod over the intended target populations.

Small state minimums are intended to ensure that small states receive a basic level of funding under each federal grant. Often, the formula sets the minimum at a certain percentage of the total appropriation that Congress provides that year – like the 0.5 percent minimum in the Title II formula. The idea behind small state minimums has merit: just because some students live in small states doesn’t mean they are less deserving of equitable shares of federal funding. But do small state minimums always work as lawmakers intended? Or do they overcompensate and provide small states with disproportionate amounts of funding per student?

To answer this question, we compiled data on total student enrollment and total state Title I, IDEA, and Improving Teacher Quality State Grant allocations in 2010. We then computed the allocation per pupil for each state and ranked them. This analysis suggests that existing federal funding formulas for those programs do disproportionately benefit small states, though some formulas do so more than others.

The ten smallest states in the nation are the District of Columbia, Wyoming, Vermont, North Dakota, South Dakota, Delaware, Alaska, Montana, Rhode Island, and Hawaii, in that order. Their total enrollments range from a little over 69,000 to just over 180,000 in 2010. As expected, many of these states receive more in federal funding on a per pupil basis than their larger peers.

This is most consistently the case with Title II Improving Teacher Quality State Grants where the first nine smallest states receive nine largest allocations per pupil, in exact order of enrollment. This is because the formula ensures each state 0.5 percent of the total allocation, or just over $14 million in 2010. If the formula did not include small state minimums, each of these states would have received closer to $3 or $4 million under the program.  In fact, each of the small states receive dramatically more than the average allocation per pupil of $60. The District of Columbia received $202 per pupil, almost four times the national average.

Small states also fare well under the Title I formula, which should theoretically be driven by student poverty. DC, Wyoming, Vermont, North Dakota, South Dakota, and Rhode Island all rank in the top 10 in terms of Title I allocation per pupil. Of these states, only DC has a particularly high particularly high census poverty rate at 30.8 percent. The rest all fall in the bottom half of states in terms of poverty rates. These states received over $348 per pupil in Title I, and as much as $686, compared to the national average of $294.

IDEA Part B allocations are least influenced by the small state minimum provisions, but some effect is not all-together absent either. Wyoming, Vermont, North Dakota, Alaska, and Rhode Island each rank in the top 10 in allocations per pupil. Rhode Island has the highest rate of students participating in special education at 18.1 percent, so the high allocation it receives may be justifiable. But the rest of the states don’t fall among the top ten states with special education participants, even though they receive nearly $300 per pupil or more in IDEA funds compared to the national average of $233. Interestingly, DC, which is a small state and has a high percentage of special education students (16.3 percent) ranks only 21st in terms of IDEA Part B allocation.   

Clearly, small state minimums have a significant influence over how federal education funds are allocated to each state to the point where these small states are disproportionately benefiting from federal funds. This is not to say that Congress should eliminate the minimums entirely. But this analysis suggests that Congress should consider the implications of the minimums and perhaps readjust the formulas produce a more equitable distribution of funds. Just as students in small states deserve their fair share, so do students in large states.

Click here to view these data for all 50 states and the District of Columbia.

Alabama Governor Robert Bentley warns of ‘tough’ state budget
Alabama Governor Robert Bentley plans to release two fiscal year 2013 budget proposals – one for education funding and another to lay out the state’s general operating budget – early next month.  However, Governor Bentley says, the plan will not reallocate any money from the Education Trust Fund to the general fund as he had originally proposed last month; a statutory change to combine the budgets would allow funds currently earmarked for education to be used for other budget items. New caps on spending from the Education Trust Fund will result in slight cuts in education spending for public K-12 schools and colleges. Education spending totaled about $5.6 billion in fiscal year 2012, and in 2013 that total is expected to drop by about $130 million. Governor Bentley has also pledged to veto any tax increases the state legislature may pass, including a proposed increase to the state cigarette tax. More here…

UMaine System freezes tuition; board urged to fix aging campus buildings
This week the University of Maine System’s board of trustees decided to freeze student tuition for the 2013 academic year at 2012 levels. Although the board has approved the tuition freeze, the decision is conditional on the school’s ability to design a budget for each campus that will not require excessive cuts. As a result, further approval is required before the proposal takes effect. According to the board, tuition has not held constant from year to year in 25 years. The decision to hold tuition at 2012 levels came in spite of a report that many of the campuses will require substantial infrastructure investments over the coming years. According to an examination of the campuses, 69 percent of the system’s square footage includes buildings that are at least 25 years old and are therefore more likely to need major renovations within the next five years. More here…

Massachusetts Governor Deval Patrick’s budget would boost aid to local schools, cut positions – and raise some taxes
Massachusetts Governor Deval Patrick this week released his fiscal year 2013 budget proposal. The plan includes $32.3 billion in spending, with over $4 billion of that directed to public K-12 schools – an all-time high for public education in the state. The education plan also funnels an additional $10 million to efforts to close the state’s achievement gap, and adds $10 million over fiscal year 2012 levels to the state’s community college system. To support 3 percent spending increases in the overall budget, Governor Patrick calls for raising additional tax revenue through taxes on candy, soda, cigarettes, and other items. Additionally, revenue is expected to exceed last year’s totals by about $940 million as a result of broader economic growth. The two houses of the legislature will produce their own versions of the budget and are expected to pass a bill to be signed by the governor before the new fiscal year begins on July 1. More here…

Idaho schools chief has plan to offset teacher pay cuts
As part of his education reforms project, “Students Come First,” Idaho Public Schools Chief Tom Luna originally planned to divert money in fiscal year 2013 from teacher salaries to classroom technology projects and performance-based bonuses for teachers. But this week Luna proposed that the state instead offset the $19 billion in diverted teacher pay and benefits with a portion of the $29 million in state revenue that Governor Butch Otter was planning to stash in a rainy day account for education. The state already cut $14.7 million in teacher pay in fiscal year 2012 to fund the reform initiatives, so Luna is trying to preserve teacher salaries for next year. In his budget recommendation, he says that salaries should take priority over the pay-for-performance provisions in his education reform plan. In total, Luna’s budget proposal includes $1.27 billion for public K-12 education for fiscal year 2013, a $57 million increase over fiscal year 2012 levels. More here…

Editor's note: This entry was originally posted on Ed Money Watch a blog from the New America Foundation's Federal Education Budget Project.

When the federal government distributes education funding via formulas, it typically takes several things into account. Chief among the data typically used are state- and school district-level poverty rates as determined through the Small Area Income and Poverty Estimates the Census Bureau conducts annually. These poverty rate estimates show the percentage of children age 5-17 living in families with total income below the poverty rate. Recently, the Census Bureau made those estimates available for 2010, providing a unique look into how poverty rates have shifted as a result of the economic recession. Those data are now available on the Federal Education Budget Project’s website (Ed Money Watch’s parent initiative). Users can compare poverty rates over time and view them in tandem with data on federal funding, student achievement, and other demographics.

When the federal government distributes education funding via formulas, it typically takes several things into account. Chief among the data typically used are state- and school district-level poverty rates as determined through the Small Area Income and Poverty Estimates the Census Bureau conducts annually. These poverty rate estimates show the percentage of children age 5-17 living in families with total income below the poverty rate. Recently, the Census Bureau made those estimates available for 2010, providing a unique look into how poverty rates have shifted as a result of the economic recession. Those data are now available on the Federal Education Budget Project’s website (Ed Money Watch’s parent initiative), http://febp.newamerica.net. Users can compare poverty rates over time and view them in tandem with data on federal funding, student achievement, and other demographics.

At the state level, the data show that poverty rates increased from 2009 to 2010 in all but two states – New Hampshire and Missouri. In both of those states, poverty rates decreased slightly. Nevada endured the largest poverty rate increase – 3.4 percentage points – to 19.2 percent in 2010. An additional 15 states saw increases of more than 2.0 percentage points from 2009 to 2010, including several large states such as California, Florida, and Pennsylvania. Nationally, the poverty rate increased from 18.2 percent to 19.8 percent.

At the district level, the data show much greater variability in poverty rates year to year. Of the nearly 14,000 school districts with data, over 9,100 saw increased poverty rates from 2009 to 2010, with an average increase of 3.9 percentage points. But nearly 700 districts saw increases of more than 10 percent from year to year, likely creating a significant increase in the number of students in need of additional services and support. Just over 4,300 districts experienced decreases in their poverty rates and nine districts saw no change at all.

What do these increased poverty rates mean for federal funding? Because most federal funding formulas – including those for Title I, Part A Education for the Disadvantaged Grants, Individuals with Disabilities Education Act grants to states, and Title II Improving Teacher Quality State Grants – take poverty into account, these substantial increases in poverty rates should mean increased allocations for many districts. These numbers are likely to be used to distribute grants for fiscal year 2012 because they provide the most recent data available. Though Congress did appropriate more funding for all three programs for 2012 compared to 2011, it probably won’t be enough to compensate for the demographic changes.  The relatively moderate funding increases may mean that many states and districts will not get sufficient additional federal funds to support the needs of their newly-eligible students, resulting in a tough budget year for the districts that saw large increases in students living in poverty from 2009 to 2010.

Check out the Federal Education Budget Project website to view the new student poverty data as well as new or updated data on state allocations for Title I, Individuals with Disabilities Education Act, and Impact Aid Basic Support Payments for fiscal years 2011 and 2012.

Today, the Asset Building Program and the Center for Social Development at the Washington University in St. Louis released the final report in the “Creating a Financial Stake in College” series. The fourth report “Ideas for Refining Children’s Savings Account Proposals” makes a case for establishing formal mechanisms for low- and middle-income children to save. Author William Elliott argues that a systematic, national approach to children’s savings accounts is a critical part of improving access to postsecondary education, particularly for low- and middle-income students.

“Creating a Financial Stake in College” is a four-part series of reports that focuses on the relationship between children’s savings and improving college success. This series examines: (1) why policymakers should care about savings, (2) the relationship between inequality and bank account ownership, (3) the connections between savings and college attendance, and (4) recommendations to refine children’s savings account proposals.

The recently-released House ESEA draft reauthorization bill makes substantial changes to the federal role in public education. Among other changes, the proposal significantly loosens requirements on how states and local school districts can spend education dollars. While more state and local control is a popular mantra, we would like to offer a few words of caution on a few provisions in the House bill. Mainly, these changes to existing law would essentially allow states and school districts to use federal funds previously intended to benefit specific, high-need populations however they see fit without requiring consistent state and local support.

1. First, the bill would move several existing programs to Title I, Part A of the law. These programs, which provide specific funding streams to local school districts for services for migrant students, neglected and delinquent students, English language learners, rural students, and Indian education, would be moved to the same section that funds grants for low-income students. Currently, these programs are authorized and funded under various titles and subparts of NCLB separate from Title I, Part A. This change would enable Congress to provide a single appropriation for all Title I, Part A programs, blurring the lines between funding for the programs. Under the bill these five programs would total 9.0 percent of the annual Title I Part A allocation, which would be set at $16.7 billion for 2013.
   
   At the same time, the bill includes a “flexibility” provision that would allow states and school districts to merge funds from these five programs, as well as set-asides for state administration and school improvement, and use them for any purposes covered by those programs or Title I, Part A Education for the disadvantaged. Under current law, states and districts are only allowed to transfer up to 50 percent of funds allocated under the Education Technology program (which is not funded in current law), the Safe and Drug-Free Schools program, and the school choice program into their Title I, Part A accounts. The five programs listed in the proposed flexibility provision are not included in any current flexibility provisions. Under the House proposal, states would have to notify the U.S. Department of Education and school districts would have to notify their state agencies if they intend to use any of the funding streams for alternative purposes. However, the proposal does not explicitly require states or districts to report how they repurposed the funds, what they were used for, or what programs or services were eliminated due to the flexibility.
   
   By allowing states and districts to merge funds from several funding streams targeted for specific high-need populations, the House bill would give them license to overlook the needs of some students in exchange for others. While giving state and district leaders more autonomy and control over federal funds to tailor services to their students’ needs is important, these specialized federal programs exist to serve students that are typically ignored.


2. Next, the House bill would allow any school that receives Title I, Part A funds to provide school-wide services, regardless of the percentage of students living below the poverty line, at that school. Currently, the No Child Left Behind Act only allows schools with poverty rates over 40 percent to use their Title I funds to provide school-wide services. This program is based on the assumption that all students at schools with such high poverty rates would benefit from additional services. In contrast, schools with poverty rates below 40 percent can use their Title I funds to implement interventions and services targeted just to eligible low-income students. Although the proposal would maintain the separate Targeted program, it seems unlikely that schools would opt to continue targeted programs when they could spread the funds among their whole population.
   
   By eliminating the poverty threshold for school-wide programs, the bill would allow schools with relatively small low-income populations to use their Title I, Part A funds to provide services to their entire student population, the majority of which would not otherwise be eligible for interventions or additional services. Those schools would no longer have to provide targeted services to just their high-need students, meaning these students could get lost or overlooked in the shift.


3. Finally, as we’ve written before, the House bill would eliminate the maintenance of effort provision of Title I, allowing state and local governments to cut per pupil or overall funding for education for districts but remain eligible for Title I funding. Current law allows a local school district to receive Title I Part A funds in an upcoming year only if state and local governments provided the district with at least 90 percent of the funding (per pupil or overall) that they provided in the preceding year. In other words, a district that received $8,000 per pupil in 2010 in state and local funds, must have received at least $7,200 per pupil (90 percent of $8,000) in 2011 to receive Title I funds in 2012.
   
   Assuming that states and local governments would take advantage of this change and cut their education funding, federal funds could begin to account for a much higher percentage of per pupil education funding (currently around 10 percent). It is somewhat ironic that lawmakers that typically support limiting the federal role in education would support a bill that has the potential to increase the percentage of education spending the federal government supplies while allowing state and local governments to cut their own spending.

Each of these changes would have a great impact on how states and school districts are held accountable for the use of federal Title I funds. But all together they would allow states and school districts to dramatically change how they use federal funds for education, practically turning Title I into an all-purpose block grant. These changes, in the name of local control, could make the nation's highest-need students more vulnerable than ever.