U.S. Department of Education
November 2009

Drawing from new data released on October 30 by the Recovery Accountability and Transparency Board, this report reviews the distribution of federal economic-stimulus funds to date and their effects on state economies and education systems. Bail-out indeed! Despite early talk about important reforms being driven by these dollars, in education at least, the federal largesse has been about jobs, jobs, jobs. Specifically, 325,000 jobs created or retained in this sector. (The report tries to smooth this over by stating the original purpose of the funds as “delivering emergency education funding to States” and sadly spends just a half-page in its 248-page entirety reporting on “ARRA Reform and Outreach” evidenced by “anecdotal accounts to the Department of Education.”) The report lauds the funds for restoring “nearly 100 percent of the 2008-09 budget gaps and significant portion of the 2009-10 shortfalls.” Call us naysayers, but we’re not convinced this is a big reason to break out the champagne. As we predicted when ARRA was in its infancy, the bailout dollars have likely retarded education reform; shielded from reality for another two years, states, districts, and schools left their unsustainable organizational bloat intact. And some of the news is even worse. Since ARRA only required states to maintain 2006 levels of funding, a number of states (such as Hawaii--and its furlough mess) used their federal funds to actually cut the state contribution to education. And what will happen in 2011 after the stimulus is spent? One may fairly shudder at the prospect. You can read the report here.

Item Type: