NPT Capitol: EPISD’s lost $100m from the stimulus
Yesterday, Senate Democrats sent a letter to Arne Duncan, US Secretary of Education, claiming among other things, that the El Paso Independent School District had been swindled out of approximately $99.4m by Texas budget writers.
How did they come to a figure like that? Here’s the short story. The Federal Stimulus Package sends a whole bunch of hard currency to states in order to shore up their education budgets. The Fed’s logic is that with all the economic problems states are encountering, the money means they wont have to cut education funding from its level in boom years. If states have any of this money left over after shoring up their budgets, then the leftover money (more-or-less) goes straight to the local ISDs.
But Texas is in a different state to most other states.
First it has approaching $9bn in its RDF savings account (the rainy day fund) and second, it has not (yet) been battered by the global economic crisis. Texas has a few holes in its budget, but nothing the RDF couldn’t take care of. However, budget writers have so far left the RDF untouched. Instead, they have ta taken the education stimulus money and used it to free up general revenue, and then used that general revenue to plug a variety of other holes in the budget created by things like declining sales tax revenues.
Senate Democrats argue that if Texas had plugged its budget holes with the RDF instead of using the stimulus money, then the ISDs would have gotten a windfall – $100m to EPISD and a whopping $347m to Houston ISD.
During the Senate’s debate of the budget earlier this month, Senate Finance Committee Chairman Steve Ogden, said that things in Texas might get worse before they get better (economically speaking) and so it was better to leave the RDF for an even rainier day.
Both sides have a point. In one sense, using the Fed’s credit card instead of the states savings account is a shrewd move giving Texas a ‘Plan B’ if things really get bad. But Texas schools are hardly the nation’s best funded. By plugging the budgets gaps with stimulus money instead of the RDF or tax hikes, ISDs wont get a potentially much needed windfall.
Check back with NPT after the weekend for the long story…