Report: States are not boosting aid for schools

WASHINGTON — An internal watchdog at the Education Department says states are using money from the economic stimulus to plug budget holes instead of boosting aid for schools.

President Barack Obama did not intend for state lawmakers to simply cut state education spending and replace it with stimulus dollars.

But Congress made that tough to enforce, and the Education Department’s inspector general said in a memo Thursday that some states are doing it.

That means instead of getting extra help to weather tough times, school districts and colleges could wind up with the same level of state aid or with cuts, even as local tax revenues plummet.

Education Secretary Arne Duncan said some states are flouting the president’s wishes.

“From the very beginning, we have made it clear that this education stimulus funding is intended to supplement local education dollars, not replace them,” Duncan said in a statement.

“When the spending reports are made public in October, states will be held accountable by the public and the department on how they used education funding,” Duncan said.

Duncan has also said that those states may hurt their chances at extra stimulus dollars from a $5 billion competitive grant program. The money is to reward states and school districts that adopt initiatives Obama supports, such as charter schools and teacher pay tied to student performance.

Duncan alone has control over the $5 billion incentive fund. And in some cases, he may be able to withhold other stimulus dollars that have been allocated for a particular state

The inspector general’s office singled out Connecticut, Massachusetts and Pennsylvania for cutting state spending on education and replacing it with stimulus dollars.

Pennsylvania lawmakers have not yet finalized the state budget. A spokesman for the Pennsylvania Education Department, Michael Race, said education spending won’t be clear until lawmakers complete the state budget.

A spokesman for the Massachusetts department of education, Jonathan Palumbo, said his state’s plan for spending the stabilization dollars was approved by the Education Department and was in compliance with the stimulus rules.

“The intent of these stimulus funds is to stabilize education funding in these unprecedented economic times,” Palumbo said. “We funded education at record levels … this year while almost every other area of state government was cut.”

Congress included $100 billion for education in the stimulus law earlier this year. Part of that was a $40 billion fund to stabilized state and local budgets. Nearly three-quarters of the $40 billion stabilization fund has already been awarded.

But as the bill made its way through Congress, lawmakers decided not to prohibit states from using the stabilization money to replace precious state aid for schools. They required states to maintain spending on K-12 schools and colleges but only at 2006 levels, which allowed most states to make significant cuts to education.

That flexibility “may be leading to a reduction in state support for public education,” the inspector general said.

The inspector general recommended the department create a system to track state spending on K-12 and college education and to make sure states have kept up spending levels as required in the stimulus.

Associated Press writer Mark Scolforo in Harrisburg, Pa., contributed to this report.

On the Net:

Education Department Inspector General: www.ed.gov/about/offices/list/oig/index.html