Obama Should Call for Restructuring of Education Funding

It would be an interesting time to consider how and why we invest federal resources in education in the first place.

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As the president addresses the nation tonight and proposes domestic spending freezes among other centrist initiatives, he will also urge Congress to pass the Elementary and Secondary Education Act (the reconstructed and rebranded version of No Child Left Behind). Obama likely will note that there is a broad middle ground on education policy, and that we must reform our schools if we wish to maintain our global competitiveness.

All of this is true, and the president may well find a receptive audience in the Republican House. As we rethink federal spending more broadly, though, it would be an interesting time to consider how and why we invest federal resources in education in the first place. [Take the poll: What should Obama's State of the Union focus be?]

The vast majority of funding for public schools is local—a combination of state and local revenues. Federal funding historically has provided 7 to 9 percent of local education spending, and is generally intended to fund particular activities and to reduce the financial burden of federal mandates. Title I supports low-income children, for instance; funding for IDEA supports special education compliance.

Over time, though, states and districts have come to see federal funding as one more piece of the general ledger. Federal funding flows in, and districts repurpose local funds for general activities. Some chunks of federal funding go directly into the general fund, including hiring teachers for “class size reduction” with minimal impact. The influx of federal funding allows states to move around state funding to pay for other items. When Congress appropriated $10 billion of emergency education aid last year, ostensibly to avoid teacher layoffs, it backfilled general state budgets, allowing states facing broad deficits to spread state tax dollars to other purposes. Sure, the emergency federal funding had to be spent on education, but other state dollars did not, and it’s impossible, after the fact, to say whether that $10 billion bought anything in terms of improved outcomes for kids. [Take the poll: Should Supreme Court justices attend the State of the Union?]

The general public, in turn, has come to see “education funding” as a federal issue in the most generic sense possible. If you ask most people whether we should cut federal education funding, they assume you are cutting schools’ general funds, and they assume federal funding for education is a substantial portion of school budgets. Indeed, education funding now is a bit of a third rail for politicians. Most of it is spread through formula funding so each congressional district gets a piece of the pie, and who wants to cast a vote that takes away money from the kids back home?

ESEA should be reauthorized, and the Obama administration’s blueprint has a number of good ideas that both the Republican House and Democratic Senate will find appealing. But here’s betting the president doesn’t call for a new discussion about the role of the federal government in funding education in the first place, or the chance to think anew about formula funding that mainly backfills local costs. Too bad—it’s a conversation worth having.

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