Matching Funds in Tight Times

It’s hard to underestimate the impact of the financial crisis on education. States across the country are struggling to keep their education budgets afloat. Districts have lost millions of dollars in failed investments. Schools are considering cutting staff, programs, and services to make ends meet. School construction projects are being put on hold and in some cases may be abandoned.

But the problems don’t end there – as states and localities pare down their education budgets, the amount of money they are able to allocate to federal programs that require matching funds is also sure to drop. Because eligibility for many federally funded programs relies on matching funds, a state or locality’s inability to provide those funds may mean the end of particular programming.

For example, the National School Lunch Program (NSLP), which provides funding for free or reduced priced meals for poor students, requires a 30 percent state match based on the amount of federal funding the state received in 1980. Child Nutrition programs currently distribute nearly $13 billion to states for school meals and many states and districts are already having trouble maintaining meal programs without increasing prices, firing staff, or cutting corners. If states were no longer able to provide the 30 percent matching funds, that $13 billion could disappear overnight, leaving over 30 million students without school meals.

Of course, it is highly unlikely that any Governor would risk losing these kinds of dollars, never mind want to weather the firestorm that would certainly ensue for taking food from children’s mouths. Still, one must wonder what other programming would be cut to keep programs like school lunch afloat.

Matching funds are not just required among billion dollar programs; many smaller grant programs require matching funds as well. The Teacher Quality Enhancement Grant program, which aims to change how teachers are trained, recruited and retained, requires grantee states to provide 50 percent in matched funding. These grants are generally between $1 and $2 million, requiring state matches of $500,000 or more.

Advanced Placement Incentive Grants, which provide states and localities with funds to improve low-income students’ participation in Advanced Placement courses, range in amount from $500,000 to $1 million and require a two to one match. Simply put, states must provide $2 for every federal dollar, amounting to a $1 to $2 million commitment.

Combined, the federal programs that require matching funds amount to far more than chump change for states and localities. Eliminating them would mean a decline in services and programs states, districts, and schools can offer.

Still, it is possible that programs that require matched funds will weather the economic storm. With these programs, states and localities literally get more bang for their proverbial buck because of accompanying federal funds, making it more beneficial to keep them around during economic crunch time.

Unfortunately, we can’t predict how states and localities will manipulate their budgets at the end of the day. States may choose to cut federal programs that require matches and put those dollars elsewhere or invest more heavily in them because of the added impact of the federal dollars. Only time will tell.