Obama’s Teacher Stabilization Funding Adds to Billions in Previous Education Jobs Support

A couple weeks ago, President Obama announced the American Jobs Act, a mix of tax cuts and new spending totaling $447 billion over ten years, intended to stimulate job creation in the country. Unsurprisingly, the bill includes a sizeable chunk of money – $30 billion – to help pay the salaries and benefits of K-12 teachers and prevent layoffs throughout the nation’s school districts. But the president’s proposed Teacher Stabilization fund isn’t the first time the Obama administration has supported providing a big pot of funding to help support state education budgets.

Back in 2009, Congress included $39.7 billion in the State Fiscal Stabilization Fund of the American Recovery and Reinvestment Act specifically to support state education spending. And in 2010, the president signed the Education Jobs Fund, which provided an additional $10 billion for K-12 teacher salaries and benefits. While the details of these programs are all slightly different, lawmakers designed them to do the same thing – keep teachers and other education employees in their jobs by providing states with support to make up for lagging tax revenues.

If Congress does pass the president’s American Jobs Act with $30 billion for the Teacher Stabilization fund, total cumulative emergency funding to support education jobs since 2009 will reach $79.7 billion. That’s more than the Department of Education’s annual budget (though the jobs money has been spread out over fiscal years 2009 through 2013). Each program distributes the funds among states in the same manner – 60 percent according to each state’s share of the school-age population and 40 percent according to each state’s share of the total population. To see state allocations under each program and their share of total emergency spending for education jobs, click here.

But each program does differ slightly. As a refresher, let’s briefly run through the details of each program:

The 2009 Education Stabilization fund of the State Fiscal Stabilization Fund provided $39.7 billion to help support state K-12 and higher education budgets in fiscal years 2009, 2010, and 2011. Most states used the majority of their funds in 2010 to support K-12 education. The funds could be used for any K-12 purposes authorized in the No Child Left Behind Act, the Individuals with Disabilities Education Act, the Perkins Career and Vocational Act, or the Adult and Family Literacy Act, for early education purposes, or for higher education purposes including education, general expenditures and efforts to delay tuition increases. The funds could not be used for construction, renovation, or modernization purposes. While the funds could be used for nearly any purpose, reporting suggests that most of it was used for salaries and benefits. The maintenance of effort provision allowed states to cut state support for education down to 2006 levels and use the Education Stabilization funds to fill the gap between that level and the higher of 2008 or 2009 levels.

The 2010 Education Jobs Fund provides $10 billion in fiscal years 2011 and 2012 specifically to help support teacher and other education staff salaries and benefits. As of earlier this month, states had drawn down 61.4 percent of these funds, meaning that the majority of them have been used in fiscal year 2011. The maintenance of effort provision in the Education Jobs Fund legislation is different from that for the State Fiscal Stabilization Fund. States that receive Education Jobs Funds must (1) maintain K-12 and higher education spending at 2009 spending levels; (2) maintain K-12 and higher education spending levels at the same proportion of state spending as they did in 2010; or (3) if state tax revenues in 2009 were lower than in 2006, maintain K-12 and higher education spending levels at either 2006 levels or in the same proportion of state spending as they did in 2006. This change to the maintenance of effort provision was intended to prevent states from overly manipulating their budgets to make room for the Education Jobs Funds.

Much like the Education Jobs Fund, the Teacher Stabilization Fund would provide support to states for teacher and other education staff salaries and benefits and other employment expenses. The $30 billion in funds would be available in fiscal years 2012 and 2013. And the maintenance of effort provision has changed slightly to require states to maintain spending at 2011 levels or above: The proposed bill states that in fiscal year 2012, governors must maintain early education, K-12, and higher education spending at or above 2011 levels or at the same proportion of total state spending as in 2011; in 2013, governors must maintain early education, K-12, and higher education spending at or above 2012 levels or at the same proportion of total state spending as in 2012.

The Teacher Stabilization Fund is the most recent addition to a series of grant aid programs to support state education budgets and save jobs. If enacted, it would mark five years of large-scale, emergency federal support for state K-12 budgets. There is no doubt that many states are still facing difficult financial situations and the Teacher Stabilization funds will certainly help these states keep teachers in their jobs and keep class sizes from growing. But it is also possible that this continued federal support for state education budgets – if Congress passes the $30 billion Teacher Stabilization Fund – is further delaying inevitable difficult decisions states and districts will have to make about how they structure their budgets and pay their teachers.