The Morning Call Archives

Copyright © 2010 The Morning Call

ID: 4687074
Publication Date: August 13, 2010
Day: Friday
Page: A1
Edition: FIFTH
Section: News
Type: Local
Dateline:
Column:
Length: long

Byline: Christopher Baxter OF THE MORNING CALL

Headline: Federal education money: Windfall or waste? **Fresh cash

aims to keep teachers in classrooms, but school districts must be careful
how they spend it. **ANALYSIS

Congress cast a financial lifeline to school districts this week with the
passage of $10 billion in aid meant to keep teachers in the classroom and
out of the unemployment lines.

With the cash came praise and political rhetoric. U.S. Education Secretary
Arne Duncan heralded the funding as a "tremendous victory for school
children around the country" and said it would end the "tough decisions"
for local school boards.

Tell that to Easton or Bangor or Bethlehem.

School boards in those districts and in many others across Pennsylvania

this spring endured marathon meetings and angry crowds before deciding
there was nothing they could do but cut hundreds of education jobs in the
name of fiscal responsibility.

Now they look to Washington, D.C., with open arms but a wary eye.
Never ones to turn down cash, districts nonetheless will be caught
between teachers union pressure to restore jobs and the reality that they
will not be able to afford much new spending after the money is gone.

For those districts that already faced layoffs, the money means they might
be able to avoid cutting jobs again in the coming year. For those that did
send people packing, they might bring back a few teachers, but school
boards will be cautious about mass hiring without knowing how to pay for
it in the long run.

School districts still face rising pension costs, turnover in the governor's
office (and the impact on state education funding) and perhaps historically
low state-imposed limits on how much they can raise taxes next school
year. In this case, a shot in the arm will not cure the disease.

"I don't see the longer-term fiscal problems of Pennsylvania going away,"
said C. Kent McGuire, dean of the College of Education at Temple
University in Philadelphia. "What's important is that school districts don't
use this money and assume that in 24 months everything will be back to
normal."

The new federal cash comes as part of the $26.1 billion aid package
signed Tuesday by President Barack Obama. The U.S. Department of
Education expects Lehigh Valley districts could have their share of the
state's $387.8 million by September.

But coupled with the news came a proposal by Gov. Ed Rendell to cut $50
million from the budgeted $250 million increase in annual basic education
funding doled out to school districts. The cuts are necessary to close a
$282 million budget gap.

That means school districts will trade flexible money they can use for any
number of expenses for one-time money that must be used to hire, rehire
or maintain employees. In many cases, the result will be postponing the
inevitable tough decisions a year or two.

"In some ways, it's bad news," said Timothy Allwein, assistant executive
director of the Pennsylvania School Boards Association.

The federal money cannot be used for non-salary purposes or to pay for
administration at the district level, and must be spent by September 2012,
according to the Education Department. Individual school district amounts
will probably be determined using the state's basic education formula.

State officials are still sorting it all out.

Aside from hiring or keeping employees on the payroll, it is unclear how

else districts could spend the money. It could pay for temporary
employees, such as consultants, or maybe rising pension costs. The
Education Department did not respond to calls about whether pension
payments would be allowed.

In districts forced to lay off personnel because of the Great Recession,

such as Bangor Area, the money provides an opportunity to keep or rehire
employees for at least another year in hopes of finding savings in other
areas or a quick economic rebound.

That would be the best-case scenario for the economy, Bethlehem

economist Kamran Afshar said.

"Someone is paying us to hire these people for one extra year, so let's do
it," Afshar said. "What's the worst-case scenario? Next year we won't have
the money. OK, then we'll be where we are now."

But Afshar's perspective ignores the unrest and uncertainty -- not to

mention the heartache -- that could come with rehiring laid-off employees
only to tell them next year they have lost their jobs again. Afshar
recommended one-year contracts.

Most Lehigh Valley school districts are still awaiting the details of the
money. Bangor Area Superintendent Patricia Mulroy said she is not
holding her breath that it will bring any lasting benefit to the Slate Belt,
including the reinstatement of any jobs.

"The hard part about all the money we've received over the last couple of
years is that you really can't count on it for anything renewable," Mulroy
said. "Anything you want to do long-term, you don't want to use that
money, which leaves us very little money to work with."

The money creates a more complex situation in Easton, where

administrators and school directors endured a firestorm of dissent on their
way to cutting 72 teaching positions, mostly through layoffs. Their
problem was less about the economy and more the cost of salaries,
benefits and debt.

If more people ended up leaving the district than officials anticipated, it is

possible the school board could bring back a few teachers. But the
administration has repeatedly said it cannot afford the jobs it eliminated in
the long term. Short-term money should not change that.

The teachers union has already begun its lobbying in a letter sent Tuesday
to Superintendent Susan McGinley asking that all the employees be called
back for the start of school. McGinley did not return a message seeking
comment.

The money would have probably strengthened the stance of a minority

contingent of Easton school directors who this spring argued for delaying
layoffs for a year, tapping the district's reserve money and finding other
ways to cut expenses. But the cash has come too late for that.
After the turmoil this spring, it is unlikely school board members would
rehire anyone without knowing for sure they would not have to lay the
person off again next year.

"Some communities might decide that the instability isn't worth the
problems with morale and disruption of programs that layoffs create," said
Temple's McGuire. "I can see some boards saying that over the long run,
this isn't something we're going to be able to afford."

Still, no local districts have indicated they will decline the money.

Easton Business Manager Marie Guidry has previously said it would be

inappropriate to spend stimulus money on salaries and benefits because
the funding is only temporary relief. Now she has a short-term stream of
money that must be spent on salaries and benefits.

Depending on what the state mandates, districts might be able to apply the
money to their current payroll, freeing up unrestricted money they could
use for other purposes. But no matter how they spend the federal aid, there
are no plans for Congress to cut another check.

The most likely scenario is that districts will use the money and report
"saving jobs" or maintaining positions that already exist. Federal
education officials say the money could support 5,900 education jobs in
Pennsylvania. How to track the impact is still being determined.

christopher.baxter@mcall.com

610-778-2283

ROLL CALL

How they voted on the education jobs bill:

Yes: Sestak, Murphy, Kanjorski, Schwartz, Holden

No: Gerlach, Dent