House GOP gets it right on ESEA funding flexibility
House Republicans have released two more bills in their effort to reauthorize the Elementary and Secondary Education Act piece by piece. The draft legislation proposed last week seeks to provide superintendents and state departments of education with more flexibility about how to spend federal dollars, dramatically remaking the American school finance system in the process.
The first gift the committee wants to give districts is increased flexibility to transfer categorical funds aimed at one underserved population into Title I. (You may recall that Mike called for something very similar more than a year ago.) This could wind up being a huge plus for children in these programs, enabling the funding of whole-school programs to address the needs of underprivileged youngsters without the mountains of red tape that currently accompany these dollars.
Second, the proposed law would repeal the so-called "maintenance of effort" requirement, which makes certain federal grant funds contingent on states and localities continuing to spend the same amount of their own money on education. This is becoming increasingly difficult to do in light of other budget pressures, including rising health care costs (both in Medicaid and on public worker payrolls).
On a whole, the House committee's proposals seem like a step towards more sensible school finance system.
Maintenance of effort requirements also hold federal grant-giving hostage to the fallacy that education simply costs what it costs, year in and year out, with regular increases in funding and no improvements in productivity. With continuing fiscal pressure at all levels of government, districts and charter schools are beginning to explore smart ways to improve instruction at lower cost. It makes perfect sense for the federal government to loosen the maintenance of effort requirement and give local governments some room to balance their budgets.
These budget pressures are having mostly negative effects in the short term, of course. It's tough for every affected district to innovate their way out of spending cuts all at once. However, the mandatory cuts to grant programs under the MOE requirement are merely a symptom of the "new normal" for state and local agencies. Removing the specter of those cuts is a net positive for schools and their leaders.
On a whole, the House committee's proposals seem like a step towards more sensible school finance system. In their concern with preventing bad decisions about how federal grant dollars are allocated, previous iterations of ESEA created onerous requirements that made those funds tough to use well and tied local hands too tightly. As always, however, if the feds do ease these restrictions, the onus will be on state and local governments to step up and create great programs on tight budgets to justify their new-found flexibility.
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About the Editor
Bernard Lee Schwartz Policy Fellow
Chris Tessone was a Bernard Lee Schwartz Policy Fellow and the Director of Finance of the Thomas B. Fordham Institute. He has strong interests in governance and education finance, especially teacher compensation and school facilities finance.
May 16, 2013