South Carolina's Application for Federal Stabilization Funds is Approved by USDE
July 1, 2009
COLUMBIA, SC – July 1, 2009 – South Carolina’s application for federal stabilization funds – including $185 million for K-12 public schools this fiscal year – has been approved, State Superintendent of Education Jim Rex announced today.
The U.S. Department of Education’s approval came after the South Carolina Supreme Court ordered Governor Mark Sanford to follow the General Assembly’s instructions and apply for the funds. Sanford had refused to sign the application unless state legislators directed an equal amount of state funds to reducing state debt.
The federal agency said a total of $625 million in stabilization funds was approved for use during the next two years, with an additional $69 million available should South Carolina apply for it. Although the lion’s share of funding goes to public schools, stabilization dollars also will go to colleges and universities, law enforcement and other agencies.
Rex estimated that the $185 million in FY 2009-10 funds for K-12 schools would be drawn down in two to four weeks, although districts are already approving budgets based on the assurance that the money is coming.
These funds are a lifeline, Rex said. Without them, local school districts would have been forced to eliminate hundreds of teaching positions and put more students in classrooms. They would have cut back on programs ranging from summer school and adult education to athletics and gifted and talented curricula. Students were going to feel a direct impact, and now schools can avoid some of that.
But Rex emphasized that the infusion of federal funds would only partially blunt the impact of state budget cuts that have resulted from a school funding system that relies largely on sales tax revenues – revenues that have dropped precipitously due to the nation’s severe economic recession. South Carolina’s K-12 schools will begin the new fiscal year with $315 million less than they began last year with; without the infusion of $185 million in federal stabilization funds, that deficit would have been $500 million.
A South Carolina Department of Education survey of school districts indicated that about 2,600 jobs, including 1,500 classroom teaching positions, would have been eliminated had the state not received the stabilization funds. With those funds, an estimated 700 jobs will be saved, including 500 teaching positions. Eighty to 90 percent of a typical school district’s budget is salaries, with most of those salaries going to classroom teachers.
Rex emphasized that transparency and accountability should accompany federal stimulus dollars.
This represents a big investment in public schools, he said, so it’s vital for parents and taxpayers to know how their dollars are being used. A big part of that accountability process is being very clear and open with the public. Local school districts must be able to defend every expenditure as being in the best interests of children.
U.S. Secretary of Education Arne Duncan also has stressed the need for transparency and detailed descriptions on how the education stimulus funds are used, quarterly reports on the use of those funds and estimates on the numbers of jobs created and retained.
South Carolina has already begun to receive education stimulus funds for Title I and special education services.
Rex met with South Carolina Comptroller General Richard Eckstrom in February to ask how the state’s public schools could be proactive in showing parents and taxpayers how federal stimulus dollars are being used. The Education Department is participating in meetings of the Eckstrom-chaired Stimulus Oversight, Accountability and Coordination Task Force created by Gov. Sanford. The Comptroller General also has developed a web site to track expenditures of stimulus funds.
I appreciate Dr. Rex’s service on the stimulus oversight task force and his commitment to transparency, Eckstrom said today.
Thanks to the leadership of Dr. Rex and others, South Carolinians can know that there are watchdogs overseeing stimulus spending.
Rex said that not all of the budget turmoil in local school districts can be attributed to the national economic recession. Some of it, he said, is due to a school funding system that is outmoded and dysfunctional.
Earlier this year, Rex proposed a package of recommendations that he dubbed Begin in 10 because 2010 would mark a transitional step toward a new foundation program to replace the state’s 32-year-old Education Finance Act. The recommendations were distilled from the work of two task forces appointed by Rex – one that focused on improving the school funding system and one that focused on changing how the state raises resources to meet its priorities, including education.
We can’t afford to wait until economic times are better to begin these reforms, he said. If we delay, then when the economy begins to turn around and state resources are restored, we’ll just be putting our tax dollars back into a funding system designed back in 1973. If we agree that the system needs to change – and everyone basically does agree – then let’s start now.
