Hijacking the $timulus Dollars


Whether one agrees with the philosophy behind federal stimulus money, it is difficult to argue with the practice of accepting the dollars once they are offered. If you (as a state) turn away the cash, it will go somewhere else.

Another story is how to use the funds, particularly in the case of the soon-to-be-arriving education stimulus. One can make a strong argument for a cautious approach; in other words, why go out and spend now when you’re likely going to need it even more later?

State Superintendent of Public Instruction Tony Bennett put it this way when informing school districts how much they should receive come November. (The federal law says the money does not have to be spent until September 2012).

"With your staffs and budgets set for the 2010-2011 school year, I urge you to be careful with how and when you spend these funds. Please consider reserving this one-time funding until the level of resources budgeted by the General Assembly in the upcoming budget cycle become clearer."

That won’t be clear until late April in 2011, if then.

While timing may be a consideration, I suspect that taking the education dollars and using them to fill a Medicaid budget gap was not what those doing the allocating had in mind. But that appears to be the case in Rhode Island. The Providence Journal reports:

Instead, Governor Carcieri intends to use the $32.9 million Rhode Island is eligible to receive to plug an estimated $38-million deficit in this year’s budget.

His plan drew a strong protest from Education Commissioner Deborah A. Gist, Congressman James R. Langevin and representatives of teachers unions and the state’s school committees.

School districts across the state were hoping that more than 400 teaching jobs would be restored or protected after Congress passed the bill in August. Nationwide, the law allocates $10 billion for schools and $16.1 billion to prevent Medicaid cuts.

Rhode Island is eligible to receive more than $100 million, $32.9 million intended for education jobs and about $70 million for Medicaid reimbursements.

But that’s about $38 million less for Medicaid than the state was counting on when it passed the 2010-11 budget, said Carcieri’s spokeswoman, Amy Kempe.

“While I’m sure it may be technically allowable and that the governor’s office is doing the appropriate thing, I don’t think we are acknowledging the intention of President Obama, [U.S. Education Secretary Arne] Duncan or Congress had for these funds,” Gist said.

Gist said she is especially concerned because the state is facing an even worse budget gap in fiscal year 2012 and the education jobs money could be spent during that year as well. According to the state Budget Office, the overall deficit could be as large as $320 million next year.

The executive director of the National Education Association of Rhode Island also criticized the governor’s plan, particularly after Carcieri and the General Assembly reduced state education aid to schools by 3.6 percent this year, a $29-million cut.

“I voted for this bill to help keep Rhode Island teachers on the job,” Langevin said in a statement. “Properly supporting our state’s education system is the best way to reverse our current economic situation over the long term.”

Officials at the U.S. Department of Education said Tuesday that using the federal money to supplant state funding is not expressly prohibited, although they cautioned they will carefully review each state’s application to ensure it follows the guidelines.

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