Gov. Quinn to Schools: Hire! Spend! Now!

by Collin Hitt Last Monday, the Governor’s Office of Management and Budget sent a letter to Illinois school districts urging them to frantically spend newly available federal stimulus funds totaling more than $400 million, before the end of November. Highly unusual, however, was that the letter and the governor’s instructions were apparently written and circulated...

by Collin Hitt

Last Monday, the Governor’s Office of Management and Budget sent a letter to Illinois school districts urging them to frantically spend newly available federal stimulus funds totaling more than $400 million, before the end of November.

Highly unusual, however, was that the letter and the governor’s instructions were apparently written and circulated without the input of the Illinois State Board of Education – an action that earned the governor’s office a subtle rebuke from state schools superintendent Chris Koch in a September 28 newsletter.

The letter from Governor Quinn can be viewed in full on the Peoria Journal Star’s education blog.  It reads:

“I am pleased that in August, President Obama signed into law the Education Fund Jobs Program to create and preserve education jobs. The State of Illinois is now ready to distribute $415 million of these funds to local schools districts.

“The funds will be dispersed under the general state aid formula, and we hope to distribute at least $140 million per month until the funds are drawn. We plan to begin this process in September and complete it no later than November 2010.”

The decision to exhaust the federal funds by November is totally arbitrary, and was reached solely by the governor’s office.  The news from Gov. Quinn caused some confusion at the local level. As Superintendent Koch stated in his e-newsletter:

“It has come to our attention that a letter was sent to many of you last week discussing the use of the Education Jobs Funds. The Illinois State Board of Education did not distribute this letter, nor did we have any input into its development…

“The letter states that the Governor’s Office of Management and Budget would like to see districts draw down and spend all of their Education Jobs Funds by the end of November 2010. Districts are not required to spend all of these funds within this timeframe and, while the U.S. Department of Education has stated that the Federal program is designed to save or create education jobs for the 2010-11 school year, districts do have until September of 2012 to obligate these funds.

“A district may choose to use its entire allocation of Education Jobs funding within the timeframe outlined in the letter if they have appropriate uses for these funds. However, deciding when to spend these monies is entirely a local decision.”

What, pray, would be the governor’s motivation to convince districts to spend so quickly? According to federal guidelines, the Education Jobs funds can only be used to cover imminent expenses, meaning that districts can dip into them as necessary to stabilize their monthly payroll  – or grow it slowly as their yearly financial picture becomes clearer.  By demanding that districts file for and spend funds right away, the governor is effectively asking schools to use federal funds to cover a large portion of their September, October, and November payroll – far more than is necessary to prevent teacher layoffs, to rehire laid off personnel, or to modestly increase staffing levels (all legitimate uses under the federal funds).

At best, this move simply frees up existing local resources to be used – or heaven forbid saved away – later in the fiscal year. If this is the case, then stimulus resources would have a marginal effect on staffing levels – Springfield Public Schools’ $3.25M allocation makes up about 3 percent of their instructional and support services budget.  So watch the spin from the governor’s office: by demanding that districts like Springfield spend money immediately, stimulus funds will temporarily cover 10-15 of Springfield’s payroll costs.  Will the governor or the feds take credit for saving or creating one-in-seven (as opposed to one-in-35) teacher jobs in Springfield, and in hundreds of other districts, too?

At worst, the move to spend stimulus money right away might compel districts to make unwise decisions, for fear of losing out completely on federal funds.  Among other things, the governor’s letter repeatedly mentions his campaign promise to increase taxes in order to increase school spending (and his budget director, whose office generated the letter, has matter-of-factly stated that the largest tax hike in state history will pass in January). So, in a rush to access federal funds, districts might make imprudent hiring decisions with the unrealistic expectation that the increased funding needed to sustain those hires is on the come.  In this case, the governor’s decision to quickly spend down federal funds could create a more significant but unsustainable boost in district staffing – again creating the opportunity for the governor’s office and Washington pols to conflate the number of jobs created or saved by the program.

There are plenty of reasons that districts might want to access federal funds immediately. The governor’s letter doesn’t change their right to do so, as state superintendent Chris Koch pointed out in his letter.  Therefore the governor’s desire to spend down Education Jobs funds immediately doesn’t create any new opportunities for districts. (If districts need the funds right away, then they can apply for them.  If they don’t need them now, why not let them wait?)

So, could the governor’s letter be motivated by other November priorities? It’s tough to say. The decision to exhaust funds between now and the end of November is certainly curious timing.  This Office of Management and Budget certainly hasn’t shown itself to be above politics in recent months.  The decision not to consult the State Board of Education was odd, and likely unrelated to education policy.  The tone of the letter read more like a campaign mailer than guidance from one bureaucracy to another – and that letter was sent not only to every district superintendent in Illinois, but to each of the states 5,000-plus local school board members as well.