Education Budget

States to Watch on November 6: Early Ed in NH, WA, VA and More

November 1, 2012

The November 6th elections are fast approaching, and in addition to the important implications of the presidential race for students, teachers and education advocates, hundreds of down-ticket races will determine policy across the country.

Over the past several weeks, we’ve highlighted some of these key races for you during our biweekly education podcasts.  Take a look back before the campaigns hit the final stretch!

College Board Report Shows Fertile Ground for Deficit Reduction in Tax Credits

October 25, 2012

This week, The College Board released its annual Trends in College Pricing and Trends in Student Aid reports for the 2012-13 school year. This year, the headline of the reports has been that 2012-13 in-state tuition at public four-year colleges rose from last year’s tuition levels at a slower rate than it did in the previous two years. (Even that comparison fails to note the real news, though, that tuition rose by more than three times inflation this year. See this post from our sister blog, Higher Ed Watch, for more.)

Given that lawmakers are sure to plunge into a deficit-cutting frenzy after the November elections to avoid the across-the-board spending cuts set to take effect in January, the Student Aid report buries a key development in student aid trends. In 2010 (the most recent year for which data are available), the federal government spent some $3.5 billion more on education tax credits than the year before – a rapid rate of growth.

These so-called tax expenditures are a rarely noted, but highly significant, part of federal education spending, particularly for higher education. They go largely unnoticed in education funding debates because they don’t look like spending to the untrained eye. But in every way that matters, they are just like spending on Pell Grants or student loans. Yes, education tax benefits provide savings to families, but in the form of foregone tax revenue for the federal government. Therefore, they factor into the federal balance sheet as a cost, even though they’re less visible to policymakers and the public than appropriations.

So what’s behind the big increase in this form of federal education funding? For one, the American Opportunity Tax Credit (AOTC). This new benefit was created in the 2009 stimulus bill to provide additional tax relief to middle-income and lower-income families and policymakers extended it beyond its original expiration date to the end of the 2012 calendar year. Meanwhile, the Hope credit, a smaller credit that includes more income restrictions, was suspended until the AOTC expires.  According to the report, the total amount of tax credits and deductions before the AOTC took effect was $7 billion (adjusted for inflation). After, it jumped to $15.4 billion. By 2010 it had climbed to $18.8 billion.

The Trends in Student aid report also shows that, when those who claim the AOTC are mapped by their adjusted gross income (AGI refers to total income minus pre-tax benefits like health insurance premiums or 401k contributions), a substantial portion of the dollar total – 23 percent – went to families with incomes over $100,000. Meanwhile, only 24 percent went to low-income families with an AGI below $25,000.  Even worse, only 3 percent of the 1.2 families who claimed the tuition and fees deduction in 2010 (down from 3.0 million in 2008) were those low-income families.

When the dust settles from the elections next month, Congress will return for a quick session to finish out the year before the newly-elected members of Congress take their seats.  At the top of the agenda are two urgent items: extending the tax expenditures already in place before the expire at the end of the calendar year, and resolving the 8.2 percent across-the-board discretionary spending cuts before they take effect on January 2, 2013.  Millions of families reap substantial savings from the credits and deductions available to them, and changes to the expenditures might be unpopular. But the College Board report shows what many in Congress already recognize: The tax expenditures for education and other fields are big-ticket items on par with regular appropriations, and are benefiting families that could hardly be described as needy. That makes them ripe for the kind of large-scale deficit reduction Congress needs to reach a compromise.

PolitiFact Ratings Point to Obama’s Successful Initiatives and Stalled Efforts in Early Ed

October 22, 2012

As the presidential election dominates the news over the next few weeks, PolitiFact – a fact-checking website sponsored by the Tampa Bay Times – has released an analysis of then-Senator Obama’s 2008 campaign promises, as well as promises made by Republican party leadership during the 2010 congressional elections.

It’s telling that not one of the 57 GOP promises rated by PolitiFact is directly related to education or children.

But of 508 of the president’s promises rated, several dozen are early childhood- or education-related. They range from home visitation for low-income expectant mothers (Promise Kept) to requiring that all schools of education be accredited (Stalled).  And a surprising number of them are promises specific to early education.

Teacher Incentive Fund 2012 Awards Granted by U.S. Department of Education

October 9, 2012

Last week, the U.S. Department of Education announced thirty-five new grants that it will make through the Teacher Incentive Fund. The $290 million in grants will go to school districts and non-profit organizations that won a competition to implement teacher compensation systems based on pay-for-performance principles. There were twenty-nine winners in the general competition, and another six in the science, technology, engineering, and math (STEM) competition. The TIF program is certainly small compared to other federal programs, but it’s worth keeping an eye on because Congress and the Obama Administration have been boosting its funding as of late—signaling common ground in an otherwise partisan environment.  But that doesn’t mean the program is free of glitches.

TIF is now in its fourth round of awards since its inception in 2006, has met resistance and obstacles along the way. Earlier this year, three districts – Chicago Public Schools, Milwaukee Public Schools, and New York City Public Schools – collectively returned about $46 million to the Department of Education, effectively ending their 2010 grants early because they failed to reach agreements with local teachers unions on how they would use the funds already awarded.

The Department says it has tweaked the program so that awardees will be in a better position to follow through on their applications. This year, districts were required to reach an agreement with the teachers unions before submitting their applications, rather than take advantage of a planning period after the grants are awarded. The change is an acknowledgement of the strained relations between the White House and teachers unions over the past term.

 And TIF grants can now be used to do more than simply build teacher compensation systems. Districts can use the dollars to establish career ladders, in which teachers take on extra responsibilities and leadership roles for more pay in addition to salary increases due to years of experience and credentials. Additionally, the 2012 competition had a Science, Technology, Engineering, and Math (STEM) component; run as a separate competition, it ensures some of the grant money would be devoted specifically to compensation systems for STEM teachers.

In the last round of TIF grants, nearly $400 million in federal funding was divvied up across 62 applicants. Among those applicants were schools districts, state educational agencies, and non-profit organizations aligned with districts, all of whom were seeking to create or build capacity within teacher compensation systems.

A few large school districts made the cut in this round. Despite its previous failure, New York City won another TIF grant, this time around totaling nearly $53 million over five years. Los Angeles Unified School District won a $49 million, five-year grant to establish a performance-based pay system that includes career steps for teachers who take on leadership roles in their schools. The money will also go to increasing the ranks of STEM teachers in high-need schools.

And most of the winning districts already have at least a pilot teacher evaluation and compensation system, so their awards will be used to expand and enhance those existing systems. New Haven Public Schools in Connecticut will receive $53 million over five years to expand its existing teacher evaluation system. Denver Public Schools won a $28 million, five-year grant to develop its existing teacher evaluation and pay-for-performance systems. And District of Columbia Public Schools won a $62 million grant to improve its teachers’ ratings on the IMPACT evaluation scale in place since 2009. (The IMPACT system includes multiple annual observations as well as student performance data.)

And a number of charter schools made the cut, too.  Green Dot Public Schools will receive almost $12 million over five years to develop a teacher, leader, and counselor evaluation system to act as the basis for a performance-based compensation system. And Ohio’s Breakthrough Charter Schools will receive a five-year, $10 million grant to implement a career ladder system and teacher evaluation system.

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In spite of extra funding and muscle the White House has exercised to broaden the use of teacher compensation systems like those supported by the Teacher Incentive Fund, questions persist about their effectiveness. Many wonder whether student test scores can really calibrate the mark of a good teacher, or how teacher observation should factor into the programs to ensure a fair, reliable metric of teacher quality. Still, pay-for-performance has been a central tenet of the Obama administration’s focus on improving student achievement and opportunities – one repeated throughout numerous Department of Education programs, including Race to the Top, School Improvement Grants, No Child Left Behind waivers, and, of course, the Teacher Incentive Fund.

Recap: What the Presidential Candidates Should be Saying About Child Care and Early Learning

October 8, 2012

There has been some debate throughout the presidential election of education, including early childhood education. But in spite of its implications for working families and social mobility, quality, affordable child care has rarely been noted by either of the candidates.

Friday News Roundup: Week of October 1-5

October 5, 2012

North Carolina state board of education may not comply with state officials' budget request

Texas Governor Rick Perry pushing tuition freeze, $10,000 degrees

Kansas Democrats foresee $900 million in education cuts

Idaho suit takes on school fees

North Carolina state board of education may not comply with state officials' budget request
The North Carolina State Board of Education plans to ignore a request from state budget officials that the agency design a series of budget proposals that both increase and decrease spending by 2 percent in the 2013-2014 biennium from fiscal years 2011 and 2012. A two percent change in the state’s education spending would total about $150 million. In opposition to the state budget office’s request, however, the state board of education instead plans to deliver a third option. According to education officials in the state, the past several years of cuts have made further budget cuts untenable, so the education budget the board passes this fall will instead represent a third option. Still, the chairman of the state board of education said it may submit all three options to the state office in the interest of fulfilling its legal obligations. More here...

Texas Governor Rick Perry pushing tuition freeze, $10,000 degrees
Governor Rick Perry of Texas repeated his call for a four-year tuition freeze for incoming freshman at the state’s colleges and universities. He is also pushing for a higher education financing reform that would link 10 percent of a school’s state funding to measures of student outcomes like graduation rates, as well as an effort to persuade schools to offer $10,000 degrees for students. Two University of Texas campuses, Dallas and El Paso, already offer a four-year tuition freeze to freshmen, and nine schools already offer or are planning to provide a $10,000 degree option. The higher education measures come amid a national push to lower college costs and decrease the growing debt burden students take on. However, the state legislature cut almost $1 billion from state postsecondary institutions in fiscal year 2011, a challenge to colleges that want to cut costs for students despite the state budget cuts. More here…

Kansas Democrats foresee $900 million in education cuts
Leading Democrats in Kansas say that Kansas Governor Sam Brownback’s tax cuts passed last session will lead to nearly $900 million in cuts to state K-12 and higher education spending over the next five years if the cuts are distributed across the budget proportionally. Governor Brownback says that the projections, which were prepared by the nonpartisan Legislative Research Department, are wrong. Instead, he says that the tax cuts will spur economic growth that will lead to a higher tax revenue. Democrats are also criticizing the governor for stacking a “School Efficiency Task Force” with accountants and business leaders but no educators, saying it’s designed to provide cover for cutting education spending. More here…

Idaho suit takes on school fees
A class-action lawsuit filed this week in an Idaho District Court charges that the state’s public K-12 schools are in violation of the Idaho constitution because they are charging registration fees to enroll in the school. The suit was filed by Russ Joki, a former school district superintendent, whose granddaughters were charged $45 each for kindergarten registration and whose grandson was charged $85 to enroll in a public high school. The suit rests on a 1970 Idaho Supreme Court case in which a $12.50 textbook fee and a $25 fee to receive transcripts were deemed unconstitutional. According to the attorney who filed the lawsuit, the court is being asked to refund one year of fees to parents in the state – a cost of more than $2 million to the state. The lawsuit is being filed during an ongoing debate over education reforms that Idaho voters will approve or reject in the November elections, as well as three consecutive years of budget cuts. More here…

Presidential Debate Included Mentions of Education, but Candidates Raised More Questions

October 5, 2012

In the first presidential debate this week, both Governor Romney and President Obama gave education a bigger spotlight than anticipated. Both candidates approached education reform as a way to drive job creation and improve workforce training for American workers. Their comments, however, brought up a few lingering questions. (For more on the debate, check out this post from Maggie Severns at our sister blog, Early Ed Watch.)

Governor Romney’s Record: The Massachusetts Bubble

Governor Romney touted his record in Massachusetts, saying the state’s schools “are ranked number one in the nation.” It is true that Massachusetts schools ranked first during his tenure as governor – but with a few caveats.  Romney’s ranking of choice is based on National Assessment of Educational Progress (NAEP) fourth and eighth grade reading and math scale scores in each state in 2005. While NAEP is considered a reasonably rigorous test, it is important to note that it is administered through a system of statistical sampling. This means it doesn’t include all students, or even all schools, in a state. Further, the distinctions between states at the top are marginal, a difference of as little as one percentage point, calling into question the import of a “number one” ranking.

Regardless of the measure, though, Massachusetts ranked first in NAEP scores in at least reading as early as 2002, before Governor Romney took office. That year, Massachusetts fourth graders scored an average of 234 points on the NAEP reading exam, well above the national average of 217. In 2005, they scored 231 in reading compared to 217 across the country, and fourth graders scored 247 in the math exam compared to the national average of 237. And even as recently as 2011, Massachusetts again ranked first according to NAEP scores in all subjects. This suggests that Romney might have just been riding the wave of high achievement; it is unlikely that his policies specifically caused these patterns.

So Governor Romney is right that Massachusetts was ranked first in the country according to the NAEP scores during his tenure. But it is harder to make a claim that the ranking was a result of his policies, especially given that the state performed well before he even took office, and still ranked first in the nation afterwards.

President Obama’s Plans: But How Would We Pay for Them?

President Obama, for his part, also spoke at length about education, saying “I think we’ve got to invest in education and training. I think it’s important…that we take some of the money that we’re saving as we wind down two wars to rebuild America and that we reduce our deficit in a balanced way that allows us to make these critical investments.”

Among those investments, he plugged his administration’s Race to the Top program (three mentions of the competition from the president in 90 minutes!). Congress and the Administration established the Race to the Top with $4.35 billion in the 2009 America Recovery and Reinvestment Act and subsequent rounds of nearly $700 million and $550 million respectively in 2011 and 2012. The President also repeated a proposal from his Democratic National Convention speech in which he called for 100,000 new science, technology, engineering, and math (STEM) teachers. That goal—a $1 billion, one-year proposal the president included in his 2013 budget request, or 1.5 percent of the Department of Education’s annual appropriation. He also called for an additional 2 million community college slots (likely funded with federal money). But if the president is to make good on his deficit-restraining rhetoric on display during the first debate, he will have a tough time finding the money to make those investments. After all, you can’t raise taxes, spend that new revenue, and then reduce the deficit.

 

The candidates face two more presidential debates, and a vice-presidential debate will be held next week. But there’s not much time left in the campaign for the president or Governor Romney to fine-tune their positions. And come November 6, they may be facing an entirely new reality.

Podcast: Presidential Debate Preview

October 1, 2012
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Will Romney and Obama discuss education during Wednesday's domestic policy debate?

On this week's podcast, Education Policy Program Director Kevin Carey and Education Week reporter Alyson Klein explain what they’ll be watching for during the debates and what questions they’d like to hear the candidates answer. Also on this podcast, Clare McCann, program associate for the Education Policy Program, breaks down the education issues driving the New Hampshire gubernatorial race. This is the first of three installments about key state and Congressional elections.

Friday News Roundup: Week of September 24-28

September 28, 2012

Louisiana Governor proposes paying for pre-K with federal hurricane recovery dollars

California Governor stumps for tax increase to avoid massive education budget cuts

Expansion to University of Missouri’s medical program dependent on tobacco tax hike

Former Pennsylvania governor says surplus should have gone to education budget instead of Rainy Day fund

Louisiana Governor proposes paying for pre-K with federal hurricane recovery dollars

Louisiana Governor Bobby Jindal has proposed paying for part of the state’s free preschool program for at-risk youth with federal hurricane-recovery money. The entire pre-K program costs $75 million a year, and the governor’s budget proposal shows $20 million coming from the hurricane fund. The pre-K program funds 16,000 four-year olds from low-income households and the $20 million would go to parishes that suffered hurricane damage. The U.S Department of Housing and Urban Development will need to approve the plan before Governor Jindal can move forward. More here...

California Governor stumps for tax increase to avoid massive education budget cuts

California Governor Jerry Brown continues to stump for a proposition that would raise taxes on those earning more than $250,000 and increase sales tax by one-quarter of a percent for four years. The proposal would generate $6 billion dollars in revenue. If the measure fails it would trigger $5.4 billion in cuts this fiscal year to public schools and community colleges as well as $500 million from California’s public universities. One of Brown’s advisers suggests that the tax hike would not only restore funding to K-12 and community colleges, but it would increase per pupil spending by $2,500. Without the new revenue, districts will receive $1,300 less per student than they do currently. There is a worry that the measure will fail, especially because there is a competing proposition to raise taxes, which analysts worry will confuse voters to the point that they will vote for neither. More here...

Expansion to University of Missouri’s medical program dependent on tobacco tax hike

A $43 million expansion to Missouri University’s medical program depends on the passage of a ballot initiative to increase the state tax on tobacco. The new revenue would be used to increase enrollment in the program by 30 percent and build a new medical education building and a “clinical campus” where students would spend two years doing clinical work. Proponents argue that the expansion will help address Missouri’s current shortage of physicians. One economic impact study suggests that the expansion could eventually lead to 300 new physicians in the state, as well as 3,500 other jobs, and a boost for Missouri’s economy overall. Should the initiative pass, the tax per cigarette would increase by $0.0365. More here...

Former Pennsylvania governor says surplus should have gone to education budget instead of Rainy Day fund

Former Pennsylvania Governor Ed Rendell criticized Governor Tom Corbett for not restoring cuts to public school funding and suggested a correlation between declining funding and declining test scores in Pennsylvania. Specifically, Rendell said that it made no sense to put nearly $1 billion into the state’s Rainy Day fund from this year’s surplus without restoring full funding to public education. "‘I think the (recently announced) decline in test scores shows that it's pouring in Pennsylvania right now. Not just raining, but pouring’" said Rendell.  More here...

Low-Need States Benefited the Most from ARRA Spending

September 27, 2012

The American Recovery and Reinvestment Act of 2009 provided an unprecedented $100 billion in additional funding for education over fiscal years 2009, 2010, and 2011. It has been notoriously difficult to interpret how states used those funds, despite promises of “transparency” from the Obama Administration. Did the money go to support the states that needed the most help? According to a recent U.S. Department of Education report, no—on average states with high per pupil spending and high student achievement received the most.

The report examines distributions of ARRA funds per pupil at the state level, grouping them by various indicators of need such as student poverty, budget gaps, and percentages of students attending persistently low-achieving schools.  The authors find that 25 percent of states that had the highest per pupil spending received an average of $435 more per pupil than the 25 percent with the lowest spending. The trend is mostly explained by $4.4 billion in Race to the Top (RttT) grants which were awarded primarily to higher-spending states.

The 25 percent of states with the highest student poverty rates received the least ARRA funding per pupil, $1,358 compared to $1,372 on average. The states that received the most per pupil were actually the states with average poverty rates (between 12.9 and 20.4 percent). Those states received $1,419 per pupil on average. Similarly, states with the highest performing students (based on the percentage scoring proficient on National Assessment of Education Progress tests) also received more per pupil than states with lower-performing students. The high-performing states received $1,463 per pupil, while the low-performing states received $1,304.

However, the report’s findings suggest more ARRA funds found their way to states with big budget gaps. States with the largest budget shortfalls did receive more funding per pupil than those with smaller shortfalls – a surprising conclusion given that Congress did not target the funds to states with large funding gaps. The 25 percent of states with the highest funding gap received $1,431 per pupil, while those states with the smallest gaps received $1,288. Again, this difference is primarily attributable to Race to the Top funding – the states with the largest gaps received $109 per pupil in RttT, while the states with the smallest gaps received only $7 per pupil.

Overall, it is not be completely surprising that the ARRA funds did not target states with the highest need as measured by student achievement and spending. Much of the ARRA funds were distributed through existing federal funding formulas like Title I or Individuals with Disabilities Education Act, which take into account many other factors besides need like state size. The State Fiscal Stabilization Fund, the largest program in the ARRA, distributed funds according to population size. Instead, Race to the Top, a $4.4 billion competitive grant program, seems to drive most of the funding differences across states. This is likely because it was intended to benefit states that were willing to or already investing in their education systems and demonstrating positive results.

Still, interpret the Department’s conclusions with caution. In calculating per pupil expenditures, the authors had to exclude some ARRA funding that technically went to education programs. But more importantly, the figures include all State Fiscal Stabilization Funds allocated to each state, not only those spent on K-12 education. States were allowed to spend the funds on both K-12 and higher education, and on average 20 percent of the funds went to higher education. As a result, the numbers cited above and in the report actually overstate per pupil spending from ARRA, particularly in states that spent most of those funds on higher education, like Wyoming and Colorado.

In all, the report sheds some much-needed light on the distribution of ARRA funds to states (as well as school districts, though that is a whole other discussion). And it suggests that the various ARRA programs mostly did what they were intended to do – push out money to states as quickly as possible based on existing funding formulas and population. While the Department attempted to encourage states and districts to use these formula funds to support reform efforts, few did. Instead the overwhelming goal of keeping teachers in classrooms and students in seats dominated. Any hope of reform now rides completely on the backs of the competitive grant programs.

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