Governor’s decision on stimulus funds ratchets up pressure on school districts

COLUMBIA – Governor Mark Sanford’s last-minute decision to accept federal stimulus dollars – but not send public schools their share – increases pressure on South Carolina districts faced with eliminating jobs next year, State Superintendent of Education Jim Rex said today.

Rex said that continuing uncertainty over federal assistance would force school districts to build budgets for next year based on their worst-case scenarios.

Things are no clearer today than they were yesterday, Rex said.
The situation is still confusing and contentious, and districts can’t postpone their budget process indefinitely while they wait for this political drama to play out.

Initial projections from a South Carolina Department of Education survey of school districts indicated that about 5,200 jobs would be eliminated in next year’s local budgets.  Sanford’s announcement on Friday that he would accept federal stimulus dollars aimed at special education and high-poverty schools reduced those projections (57 of 86 districts responding) to 2,600 eliminated jobs, including 1,500 teaching positions.  About 700 of those eliminated jobs, including 500 teachers, could be saved if federal stabilization dollars went to public schools, but Sanford said today that he would not apply for those funds unless the General Assembly agrees to cut other areas of the state budget an equivalent amount and pay down state debt.

School districts have been allowed to delay issuing teacher contracts from their usual April 15 deadline to May 15, but local finance officials still don’t know how many teaching positions they will be able to afford next year.  Without clear information, they have few options.

Rex questioned Sanford’s strategy of refusing to pull down federal aid for public schools unless the General Assembly first accedes to his demands on debt repayment.

The White House has made it clear, on two separate occasions, that federal stabilization funds can’t be used to retire state debt, Rex said.  These and funds are aimed at creating jobs and saving jobs.
For the governor to get his way, the General Assembly would be forced to create some sort of bookkeeping sleight-of-hand that, believe me, the federal government isn’t going to permit because the law approved by Congress doesn’t permit it.

It’s not enough merely to settle this issue.  It has to be settled quickly.  Every day of indecision pushes districts toward decisions that they don’t want to make, decisions that will hurt kids.  On top of that, every day of indecision reduces the potential for the federal stimulus package to make a positive difference.  Other states and other governors are getting this done, and we need to end this political grandstanding and get it done here, too.  There’s a human toll in all of this because a lot of good people’s lives are ‘on hold.’

In many communities across South Carolina, school districts are the largest employers in the area.  The Greenville County School District, the state’s largest at more than 9,000 employees, announced plans this week to eliminate hundreds of positions.

There’s been a lot of conversation about the impact these budget cuts will have on schools and students, but we can’t forget that widespread job losses in schools would also have a negative impact on the surrounding communities, and the businesses in those communities,
Rex said.

The State Superintendent reiterated his support for the federal stabilization dollars and said, These federal dollars are going to be spent – if not in South Carolina, then in some other state.  If our taxpayers have to repay this debt, then our taxpayers should receive some benefit from the money.  It’s as simple as that.

On Wednesday, the U.S. Department of Education published guidelines that rule out the possibility of states using federal stabilization funds to reduce state debts, a strategy advocated by Sanford.  The federal agency said the paying down of past debt or the paying of interest or other obligations on past debt does not constitute the use of funds for ‘government services’ under the plain meaning of those words in the American Recovery and Investment Act of 2009.

Rex said that billions of additional dollars will be made available to states for innovative K-12 programs, and most of those funds require state governors to take key roles in applying for them.  He expressed hope that Sanford would assist the Education Department in applying for the competitive grants, which could be used to expand instructional choices at schools or to develop performance pay programs for classroom teachers.

South Carolina schools have absorbed $387 million in cuts this year, and absorbing those midyear reductions has left many districts with few alternatives except to consider cuts to their most important assets – their classroom teaching positions.  Eighty to 90 percent of a typical school district’s budget is salaries, with most of those salaries going to classroom teachers. 

(Projection methodology – A number of school districts have not responded yet to the survey.  Some are on spring break this week, and others are not far enough along in their budget development processes to make decisions on eliminating positions.  So we compiled job loss totals from the responding districts, then used the total number of students in those responding districts to extrapolate and project statewide job
losses.)