Friday News Roundup: Week of September 20-24

At Ed Money Watch, we discuss and analyze major issues affecting education funding. In our Friday News Roundup, we try to highlight interesting stories that might otherwise get overlooked. These stories emphasize how federal and state policy changes can affect local schools and districts.

Texas Files Lawsuit over EduJobs Money

Alabama School Systems Borrow Money to Make Ends Meet

Oregon Emergency Board Votes to Avoid Cuts to Education

Montana School Districts May Not See the Expected Bump in Funding from EduJobs Money

Texas Files Lawsuit over EduJobs Money
Texas officials are suing the U.S. Department of Education (ED) for its $830 million share of federal stimulus finds from the Education Jobs Fund after ED rejected its application for the funds. The state’s application was denied because it did not comply with a special provision U.S Representative Lloyd Doggett, a Texas Democrat, inserted into the law requiring Texas Governor Rick Perry to promise to maintain certain education spending levels through 2013. Governor Perry claimed that such a promise would violate the Texas constitution, which does not allow money to be appropriated more than two years ahead of time. The U.S. Department of Education encouraged Texas to reapply for the funds. Federal officials suggested that if Texas were to remove the section of the application explicitly refusing to violate the constitution, it might be possible to approve the application. More here…

Alabama School Systems Borrow Money to Make Ends Meet
Alabama education officials announced this week that 35 of the state’s 132 school systems had to borrow money in September to fulfill their payroll obligations. Last week, Governor Bob Riley ordered a 2 percent across-the-board cut to the state’s budget, causing budget holes for many districts. The reduction was caused by shortages in state revenue due to the BP oil spill. BP refused to immediately pay the state’s $148 million claim, leaving the state unable to fulfill its obligations for September, the last month of fiscal year 2010. It is not yet clear whether similar cuts will be necessary in fiscal year 2011. More here and here…

Oregon Emergency Board Votes to Avoid Cuts to Education
Oregon lawmakers on the Legislature’s Emergency Board voted unanimously this week to spend almost $18 million from the state’s emergency funds to mitigate the effects of an eight percent across the board cut to agency budgets for the 2009-11 budget biennium. The Emergency Board made available $7 million of the $18 million for K-12 education, along with an additional $118 million in federal stimulus dollars. According to the Board, this should prevent most schools from making cuts to their budgets between now and January, when the new legislative session begins. State leaders say they will allocate an additional $34 million in the new session to prevent teacher layoffs or a reduction in the number of school days for the current 2010-11 school year. Lawmakers expressed concern that this is a temporary fix given that state revenue doesn’t appear to be rebounding and state reserve funds are mostly depleted. More here…

Montana School Districts May Not See the Expected Bump in Funding from EduJobs Money
Montana received $31 million in federal stimulus funds through the Education Jobs Fund of 2010 last week, but school district officials are concerned that they won’t see an increase in state aid as a result. The money was intended to prevent districts from laying off teachers whose jobs were previously supported by federal stimulus funds through the American Recovery and Reinvestment Act of 2009. However, Governor Brian Schweitzer plans to distribute the money through the state’s basic school aid formula, supplanting the state funds that would have otherwise gone to schools. This would violate the intent of the law – which was to save teacher jobs in the 2010-11 school year by boosting total education funding. However, Governor Schweitzer’s plan would not actually violate the law, which allows states receive the funds as long as they maintain certain education funding levels. More here…

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