School of Hard Financial Knocks

TAMPA (2011-21-9) -

As part of the 2009 economic stimulus package, millions of federal dollars flowed to Florida’s public school districts. The money was intended to benefit low-performing schools as way of closing the so-called achievement gap.

Though President Obama’s ambitious education agenda included saving teachers’ jobs and renovating classrooms with funds from the economic recovery bills, his vision was also to accelerate improvement in schools.

“Every dollar we spend must advance reforms and improve learning,” U.S. Secretary of Education Arne Duncan said in 2009. “We are putting real money on the line to challenge every state to push harder and do more for its children.”

But with the aid of federal waivers, school districts were allowed to divert money from education reform to patch holes in general operating budgets. In fact, a review of financial records by the Florida Center for Investigative Reporting shows that the state’s school districts spent more than $890 million in federal money this way.

Starved for cash as a result of plummeting real estate values and dwindling property tax revenues, Florida school districts used these hundreds of millions to put off the inevitable — difficult budget cuts.

Now, two years after the first stimulus dollar rolled in, Florida’s public school system is learning difficult financial lessons. School districts throughout Florida are laying off teachers, closing programs and scrambling to identify other significant cost-saving measures — all problems made worse by the fact that Florida’s school districts used the stimulus money in large measure to delay needed cuts.

A lesson in school finance

The financial problems for Florida’s public school districts began in 2007, when shrinking local tax revenues and declining state resources, including $1.4 billion in funding cuts to public schools, created budget deficits of tens of millions of dollars.

The American Recovery and Reinvestment Act of 2009, better known as the stimulus bill, came to the rescue, channeling an unprecedented $100 billion into the nation’s education systems — with $4.7 billion sent to Florida — to stabilize school districts and stave off layoffs.

The cash infusion carried with it an ambitious goal — to speed up academic improvement at low-performing schools. The federal government labeled part of this money as Title I, meaning it was to be earmarked for programs to improve academic achievement among low-income students.

But Florida’s largest school districts used more than half of the Title I money to pay for salaries and benefits during the 2009-10 school year. More than $218 million of the $404 million granted to Florida’s 14 largest school districts was spent to help keep the schools afloat.

Nationwide, the total numbers of waivers allowing schools to divert Title 1 money to other budgetary needs was unprecedented.

In 2009, after the initial release of stimulus money, Education Secretary Duncan granted 351 waivers to districts nationwide that allowed their administrators to use Title I money for other purposes. The Education Department issued just 51 waivers in 2008 and 35 in 2007.

In one example, 7 of every 9 school districts in Florida received waivers that gave administrators flexibility to use the extra dollars intended for school choice, transportation and tutoring to pay teacher salaries and benefits.

Cheryl Sattler, a Quincy, Fla.-based consultant who works with public school districts nationwide, said the federal government was not clear about how the money should be spent.

“Over and over, the feds said don’t spend [stimulus money] on people, but at the same time, they gave this message that the whole law was about saving jobs,” Sattler said. “You kind of have to pick.”

Some predicted this outcome. A 2010 study by Bellwether Education Partners, a nonpartisan think tank in Washington, D.C., warned that the redirection of stimulus money wouldn’t address future funding shortfalls.

“The money is going to run out and school districts need to look more closely at how they budget, which they’ve never done before,” said David DeSchryver, vice president of education policy for Whiteboard Advisors, a Washington, D.C.-based group that focuses on public education policy. “They have basically laid out programs and gone mindlessly about their business.”

Dan Domenech, executive director of the American Association of School Administrators, said the recession has hit education funding harder than most education administrators anticipated.

“The intention for the stimulus funding was for school districts to use those additional dollars for improvement and reform,” Domenech said. “The reality in most states was that those dollars were basically used to replace state and local dollars that were cut from the education budgets.”

Now, the stimulus funding is about to run out — and the economy in Florida shows no sign of improvement.

Meanwhile, the state government slashed the education budget even further. During the 2011 Legislative session, legislators cut $1.1 billion from education — or $542 per student.

How local districts are faring

The Obama administration wanted the stimulus money to provide financial incentives for teachers with a record of helping students achieve in historically low-performing schools. Two school districts in Florida did just that.

“The teachers, in order to get this money, have to perform well,” said Kathy LeRoy, chief academic officer at Duval County Public Schools. “The biggest impact on the student success is the teacher in the classroom.”

For the 2010-11 academic year, Duval received $4.1 million in federal money, which provided financial incentives to 1,982 teachers in 28 low-performing schools.

But as many Florida school districts did, Duval also found ways to attract extra money from the federal government. Administrators at the Jacksonville-area education system pointed to 11 high schools and nine middle schools and added them to their list of Title I schools, bringing in an additional $5.8 million in stimulus money that paid for salaries and benefits for teachers, as well as for supplemental staff such as reading and math coaches. Administrators also used part of this funding in combination with other funds to offer professional development courses for teachers.

Despite stimulus funding, Duval County Public Schools is currently experiencing significant financial problems, including a $97 million budget shortfall for next school year.

Duval school board members announced in June that they balanced the budget. Teacher and staff furloughs, expected to save the district $7 million, accounted for the largest portion of the cuts.

Administrators for Hillsborough County Public Schools, by contrast, recognized from the beginning that stimulus funding would end. Though the district is still feeling the sharp economic pinch, Hillsborough used its $6.5 million in Title I funding to offer incentives to 1,650 teachers at 40 schools for two academic years — 2009-10 and 2010-11.

“That cliff is coming after two years and the money will be gone,” said Jeff Eakins, Title I director of Hillsborough County Public Schools in Tampa. “And that’s why we looked into those one-time investments that will have long-term impact.”

Two years ago, Miami–Dade County Public Schools Superintendent Alberto M. Carvalho supported the state’s decision to seek the waivers. In a July 17, 2009, letter, he urged state education officials to apply for “all allowable waivers for Florida schools in order to maximize flexibility school districts needed.”

The financial outlook for Miami-Dade, the nation’s fourth-largest school district, didn’t seem bright when Carvalho wrote the letter. His school district had gone through more than $300 million in cuts, with more to come later that year.

Even though Miami-Dade County Public Schools leaders used some stimulus money to enhance Title I programs and offerings — such as student access to technology, online and hands-on math and science programs, and training for teachers — most of Miami-Dade’s $96 million in Title I funds paid for salaries to retain and hire staff.

“I think that many of the successes and good things that happened during the past three years would have not happened had those dollars not been there,” said Magaly C. Abrahante, a Miami-Dade assistant superintendent overseeing Title I programs, referring to how Miami-Dade was able to expand Title I programs and offerings.

Asked if she thought federal education officials’ expectations for reform were unrealistic, Abrahante admitted that Florida’s economy has prevented school districts from using the funds for their intended purpose.

“I think to some extent the financial situation has been a distraction,” Abrahante said. “And under the circumstances, districts have done what they had to do to keep the schools running.”

Miami-Dade, where 72 percent of students are eligible for free or reduced lunch, is in better financial shape than most school districts in Florida. That’s largely because Miami-Dade’s administrators have made extensive changes to the budget, including salary cuts for top administrators, principals and school police supervisors. In addition, funding was slashed for clerical and transportation services, as well as for programs aimed at troubled teens.

Without doubt, most school districts in Florida are in worse shape than they were two years ago, when the stimulus money first arrived.

Officials for the Manatee County School District are contemplating deep cuts, including salary reductions for teachers, administrators and other staff.

In Seminole County, school administrators had pinned hopes on a proposed referendum that if passed would have increased sales or property taxes to cover the district’s $26 million shortfall for the 2012-13 school year. But the School Board of Seminole County abandoned the proposal after tea party activists protested in August.

Broward County School Board members in June slashed $170 million from their district’s $1.9 billion budget. The cuts focus on programs such as art, music and physical education. They also call for layoffs of 1,400 teachers and 594 non-instructional employees, including secretaries, custodians and classrooms aides.

Because the Education Department offered mixed messages about how the stimulus money should be spent, the results have been painful.

“The program wasn’t carried out in the best of circumstances,” said Jack Jennings, president of the Center on Education Policy, a nonpartisan research group in Washington, D.C. “The intentions were good, but the execution wasn’t the best because there wasn’t anybody at the Education Department to implement. There was all this pressure to get the funding out the door.”

In the end, there’s a lesson in all of this for Florida’s school districts, said David DeSchryver of Whiteboard Advisors. “It is the need to be more sophisticated about their finances,” he said.

Even so, future funding for Florida’s public education system is uncertain amid continued declines in state and local tax revenue. As with the housing market, the bottom may not be near.

Domenech of the American Association of School Administrators said public education funding will continue to suffer until the state and the nation emerge from this period of economic crisis and uncertainty.

“It’s a tough go,” Domenech said, “and it’s going to take a while.”

This story was funded by a grant from the Fund for Investigative Journalism, a Washington-based organization that provides grants to support investigative work. It was also funded in part by the Spot.Us community.

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