Congress Passes Education Jobs Funding: What’s the Local Impact?

As regular readers of our Legislative Update know, Congress spent the better part of the last year debating whether, and how, to provide funding to states to save or create education-related jobs.  With the ongoing economic downturn and the drying up of last year’s stimulus money, many states are facing severe budget shortfalls and are making cuts accordingly.  This past Tuesday, Congress finally passed a bill to distribute $10 billion to states to help mitigate the impact of these cuts on education.

The need for this funding is great.  At an April meeting of the appropriations subcommittee dealing with education, Secretary of Education Arne Duncan stated, “While there is no hard number for the whole country, we think state budget cuts could imperil anywhere from 100,000 to 300,000 education jobs.  That not only creates hardships for educators who lose their jobs and the children they teach, but the damage ripples through the economy as a whole.  The layoffs would create a new drag on the economy when…we still have a long way to go.  Literally tens of millions of students will experience these budget cuts in one way or another.  Moreover, schools, districts and states that are working so hard to improve will see their reforms undermined by these budget problems.”  This is certainly an issue in Louisiana, where we are striving to reform and improve education even though in recent years school funding has not kept pace with rising costs.

This is why members of Congress and the Obama Administration worked all year on legislation to keep teachers on the job and mitigate the impact of state budget cuts.  Initially, several bills were proposed that provided $23 billion for so-called “edujobs,” such as the Keep Our Educators Working Act.  When agreement on this amount could not be reached, Representative David Obey proposed, and the House of Representatives passed, a $10 billion measure that offset edujobs funding with cuts to other education programs, some favored by the Administration.  When the Senate took up the measure, it restored those cuts, found other offsets, and ultimately passed the funding last week.  This led to the House being called in from recess this week and passing the bill, H.R. 1586, by a vote of 247 to 161.  It was promptly signed into law late Tuesday by President Obama. Among Louisiana’s delegation, Senator Landrieu and Representatives Melancon and Cao supported the bill.

Some specifics of the legislation:  It directs the U.S. Department of Education (USDOE) to allocate the funding to states based on generally the same terms as last year’s similar stimulus program, the State Fiscal Stabilization Fund (SFSF), including divvying up the money in proportion to states’ student and overall populations, and requiring states to make certain assurances about how the money will be used.  The allocation is not automatic; states must apply to the USDOE for their share.  A state department of education may keep up to 2% of its allocation for administrative expenses, and must distribute the rest to local school districts through either its normal K-12 education funding formula (in Louisiana, the Minimum Foundation Program, or MFP) or based on last year’s federal Title I distributions.  States must use the money during the 2010-2011 school year, and they may use it “only for compensation and benefits and other expenses, such as support services, necessary to retain existing employees, to recall or rehire former employees, and to hire new employees, in order to provide early childhood, elementary, or secondary educational and related services.”  States may not use the money to fill rainy day funds or pay debt obligations, and must commit to maintaining education spending at certain minimum levels.  Finally, the legislation also includes approximately $16 billion for Medicaid and other state services, which will help education indirectly by reducing pressure on states to make across-the-board cuts, including to education budgets, to support these services.

This legislation will have a significant impact on education nationally and in Louisiana.  Estimates on the number of teacher jobs that will be saved or created nationally range from 137,000 by the Education Commission on the States (ECS), to 161,000 by the U.S. Department of Education.  Louisiana is projected to receive approximately $147 million, which is estimated to support 2,222 jobs under ECS’s estimate and 2,800 under USDOE’s estimate.

It is harder to quantify the impact in New Orleans, given that we don’t yet know which method the Louisiana Department of Education will use to distribute the funding to local districts.  Our guess is that they will use the MFP formula, as it was the method used last year for SFSF funds, and it would provide a more equitable stateside distribution than the Title I method.  If this is right, we can get a rough estimate for New Orleans by dividing the number of statewide jobs – we’ll average the estimates and round to 2500 – by the percentage of funding allocated to New Orleans schools under the MFP formula – 5% – which equals: roughly 125 jobs directly created or saved by this legislation.  That’s 125 teachers back in the classroom, impacting hundreds of students, helping keep our education improvements on track.  Multiply this impact by the 2000-plus teacher jobs supported statewide, and the indirect benefits to the state budget and economy, and you’ve got a real boost to education in Louisiana in what could otherwise be a tough year.

After all the ups and downs, we are glad that Congress finally found a way to pass this vital legislation.  Education is fundamental to the well-being of our communities, our state, and our country, and this funding will go a long way to keeping our teachers and students in the classroom and on track.