House Republicans have released two more bills in their effort to reauthorize the Elementary and Secondary
Education Act piece by piece. The draft legislation proposed last week seeks to
provide superintendents and state departments of education with more
flexibility about how to spend federal dollars, dramatically remaking the
American school finance system in the process.

The first gift the committee wants to give districts is
increased flexibility to transfer categorical funds aimed at one underserved
population into Title I. (You may recall that Mike called for something very
more than a year ago.) This could wind up being a huge plus for
children in these programs, enabling the funding of whole-school programs to
address the needs of underprivileged youngsters without the mountains of red
tape that currently accompany these dollars.

Second, the proposed law would repeal the so-called
"maintenance of effort" requirement, which makes certain federal
grant funds contingent on states and localities continuing to spend the same
amount of their own money on education. This is becoming increasingly difficult
to do in light of other budget pressures, including rising health care costs
(both in Medicaid and on public worker payrolls).

On a whole, the House committee's proposals seem like a step
towards more sensible school finance system.

Maintenance of effort requirements also hold federal grant-giving
hostage to the fallacy that education simply costs what it costs, year in and
year out, with regular increases in funding and no improvements in
productivity. With continuing fiscal pressure at all levels of government,
districts and charter schools are beginning to explore smart ways to improve
instruction at lower cost. It makes perfect sense for the federal government to
loosen the maintenance of effort requirement and give local governments some room
to balance their budgets.

These budget pressures are having mostly negative effects in
the short term, of course. It's tough for every affected district to innovate
their way out of spending cuts all at once. However, the mandatory cuts to
grant programs under the MOE requirement are merely a symptom of the "new
normal" for state and local agencies. Removing the specter of those cuts
is a net positive for schools and their leaders.

On a whole, the House committee's proposals seem like a step
towards more sensible school finance system. In their concern with preventing
bad decisions about how federal grant dollars are allocated, previous
iterations of ESEA created onerous requirements that made those funds tough to
use well and tied local hands too tightly. As always, however, if the feds do
ease these restrictions, the onus will be on state and local governments to
step up and create great programs on tight budgets to justify their new-found

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