Friday, January 29, 2010

Despite federal stimulus money, some state school budgets may be at risk

Seattle, WA - An early snapshot analysis of 23 state budgets using federal education stimulus dollars indicates that short-term benefits could result in less spending on schools over the long term in some states.

In their analysis, Have States Disproportionately Cut Education Budgets During ARRA? Early Findings, researchers Marguerite Roza and Susan Funk raise a yellow flag of caution.

In the case of 13 of the 23 states they examined, education spending as a share of state budgets declined during the infusion of the federal stimulus money via the American Recovery and Reinvestment Act (ARRA).

A key concern emerging in this analysis is the notion that while the State Fiscal Stabilization Fund (SFSF) was intended to protect state education spending (and did likely result in short-term stabilization), the longterm effect could be the opposite, according to the brief. For states where education's share of the state budget shrank during SFSF, we might anticipate that restoring education's previous share could be difficult.

In the other 10 states that received federal SFSF money, education as a state share of spending remained stable or went up.

Roza and Funk observe that state spending plans are still in flux, so thinking ahead on the interplay between stimulus funds and state budgets could enable policymakers to make more proactive decisions now to avert unintended consequences later.

Published by the Center on Reinventing Public Education at the University of Washington, "Have States Disproportionately Cut Education Budgets During ARRA?" is the sixth Rapid Response brief in the SCHOOLS IN CRISIS: MAKING ENDS MEET series, designed to bring relevant fiscal analyses to policymakers amidst the current economic crisis.

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