Some More Wrinkles for the Education Jobs Fund

This past Tuesday, President Obama signed HR 1586 into law, providing a $10 billion Education Jobs Fund to help states avoid teacher layoffs. Congressional leaders claim that the program will save as many as 160,000 K-12 education jobs that otherwise would be lost because of state budget cuts. However, that number is now being called into question by policymakers and stakeholders because of various implementation issues.

As Ed Money Watch discussed earlier this week, school districts in some states have already taken action to avoid teacher layoffs by freezing salaries or eliminating programs and services. For these districts, the Education Jobs Fund just came too late – they had to make and implement difficult decisions under the assumption that there would be no more federal funding to support teachers. And now they are effectively stuck with the outcomes of those decisions despite the presence of more federal funding.

Additionally, some states have been able to solve their education funding issues without the new federal funds. For example, Arkansas has been able to maintain state funding for education jobs, eliminating the need to layoff teachers and other K-12 staff. North Dakota is not faced with any potential teacher layoffs due to stable tax revenues. States in this situation will be receiving federal funds that they don’t directly need and must find other ways to spend it on education employment. Or, they can choose not to apply for the funds at all, giving the U.S. Secretary of Education the option to allocate those funds to another state.

Finally, some school districts, who really could use the extra funds but were also functioning under the assumption that they would never come, have already finalized classroom assignments, course schedules, and other staffing details. For them, it may be too big of a hassle to start over again on these decisions given the new funding. This is even more significant for districts that may not see extra federal funds until after the school year starts. Adding new teachers, classrooms, and course-offerings one month or later into the school year could cause more disruption than they are willing to handle.

So what will states and school districts in these situations do with the new Education Jobs Fund monies? They could hire temporary staff to provide additional services like tutoring, professional development, coaching, or administrative help. They could create new administrator, counselor, or teacher positions and hope that they have enough funding in the future to keep those new jobs. They could shift around funds to bring back programs and services that were previously eliminated during cost-cutting efforts.

Or, they could hold onto the funds for next year. According to Assistant U.S. Education Secretary Carmel Martin, a pre-existing law enables school districts to carry over the new federal funding into the 2011-12 school year. While the Education Jobs Fund is meant to provide funds that will be used immediately, this flexibility in the new funds could be helpful to school districts that have already ironed out their funding issues for the 2010-11 school year but are anticipating similar problems for 2011-12.

Of course, there are some states and school districts that desperately need the money and are willing to endure the bureaucratic hassle to use it quickly. For example, a recent report out of New Jersey suggests that many districts intend on rehiring previously let-go teachers if new federal funds are made available in time. This is also the case in similarly cash-strapped districts in California.

The real success of the Education Jobs Fund seems to depend on how quickly the Department of Education can get the money out to school districts. According to the legislation, each state’s governor must apply for the funds within 30 days of the law’s passage, but the application cannot require more information than is necessary to ensure that a state is in compliance with the law. The U.S. Secretary of Education must award the funds within 45 days of the law’s passage, or 15 days after state applications must be submitted. According to this timeline, Education Jobs Funds must be awarded to states by September 24, 2010, well after the school year has begun.

Then, the states must get the funds out to school districts, a process that was less than straightforward under the Education Jobs Fund’s predecessor, the State Fiscal Stabilization Fund. Though the legislation states that school districts do not need to submit new applications for the funds if their State Fiscal Stabilization Fund applications have already been approved, states can choose to distribute the funds on whatever timeline they see fit. Theoretically, that means that some school districts may not see funds until the beginning of the next state fiscal quarter or later.

For now, all school districts can do is plan as much as possible for the new federal funds, given the uncertainty about when they will actually arrive. Check back with Ed Money Watch as this process continues.