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Stimulus Dollars Meant to Prevent Cuts, Layoffs

Across the Commonwealth local appropriating bodies are failing to use the education funding provided by the American Recovery and Reinvestment Act (ARRA) for its intended purpose.  President Obama said on March 18th that, "Almost all of the money that's going to states under the recovery act for education is designed to retain teachers."  The US Department of Education indicates on its web site that, "ARRA funds will be distributed quickly to states, local educational agencies and other entities in order to avert layoffs, create and save jobs and improve student achievement."

We are seeing the funds for our schools seized by local appropriating bodies in Virginia and used to increase reserve funds, reduce taxes and indirectly fund projects not related to public elementary and secondary education. (Continue reading below.)

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Resources to help you understand ARRA and its impact:

• American Recovery and Reinvestment Act (ARRA): Questions to Consider and Suggested Uses of Funds. NEA guidelines.
• "Shell Game." Video dramatization of the issue.
• "Schools' 'Money Is Falling Off the Truck.'"   Washington Post article, 4-13-09.
• "Schools and Local Governments Differ on Stimulus." Richmond Times-Dispatch article, 4-20-09.
• Letter to Virginia Gov. Tim Kaine  from VEA President Kitty Boitnott, 4-3-09.
• Virginia Department of Education  analysis of local school division funding from ARRA. (Read below exactly how to access the report for your school division.)
• NEA resources on ARRA and school funding.
• U.S. Department of Education ARRA updates.

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Please note the following examples:

1.  Bringing Virginia Localities to Use the Federal Stimulus Funds as Intended:  Augusta
Augusta County is in the Shenandoah Valley and has about 10,500 students.  Along with many other Virginia school divisions, Augusta is pretending that the stimulus money doesn't exist and has not included those funds in its school board approved budget.  This understates Augusta's revenue from the revenue stabilization fund by $4.4 million.  Local funds are declining from this year by $1.7 million as well.

As a result of the failure to recognize state funding and the withdrawal of local support, expenditures are being slashed by 6%.

* Employees will be required to pick up $44 per month more for health insurance despite not getting any step or COLA.
* Part-time positions, unfilled positions and support positions are being cut.
* Class sizes are increasing.
* Athletic programs are being trimmed.

At the same time these cuts are planned, Augusta County anticipates a General Fund balance of $6.1 million at the end of 2010.  Additionally, about $10 million is set aside in a capital fund to pay for any emergency building issues, if any should ever arise.

Augusta is also planning to cut its tax rate from $0.58 per $100 of assessed value to $0.48.  The mean tax rate for Virginia localities is $0.70.

2.  Bringing Virginia Localities to Use the Federal Stimulus Funds as Intended:  Franklin County
The Franklin County School Board and Board of Supervisors are in disagreement regarding the proposed budget for the school system.  It is reported in The Franklin News Post that "The school board's budget proposal for 2009-10 is $83.3 million and the county's proposed budget is $81.4 million, both of which include $2.3 million in federal stimulus money."

In reality, the county is due to receive $2.3 million of stimulus funds through the direct aid distribution from the state.  Despite this infusion of federal funding, the Board of Supervisors intends to reduce the school budget by almost $400,000.  These cuts come at a time when the county plans to open a new elementary school this coming year at a cost of $1.2 million.

Reflective of the broad confusion regarding the use of the stimulus funds in the Commonwealth, local leaders repeatedly assert that, "We cannot use the stimulus funds - there are too many strings."

Superintendent Lackey indicates that these cuts will lead to a loss of over thirty professional positions in this small rural school division with 7,080 students.  In fact, 61 first year teachers in Franklin County were non-renewed, and another 30 individuals face loss of position, contract reductions (12 month to 10 month) or reassignment.  Franklin currently ranks 108th in teaching positions per 1000 students (Virginia has 132 school divisions).

The county real estate tax rate is $0.46 per hundred of assessed value, the lowest in the region and well below the state mean of $0.70.  Of the 132 Virginia divisions, Franklin County ranks 43rd in capacity and 94th in effort.  The county has a $30 million reserve with $17 million of that sum undesignated. 

The Franklin County Board of Supervisors plans to vote on the School Board Budget on April 28.

3.  Bringing Virginia Localities to Use the Federal Stimulus Funds as Intended:  Loudoun County
Loudoun is a fast-growing suburb of D.C. with excellent schools, teachers and student performance.  For this year, the per-pupil cost for the schools is estimated to be $12,780, several thousand less than most Northern Virginia school divisions.

As it stands now, with the budget before the Board of Supervisors, Loudoun school's funding for next year decreases by about 5% per pupil, with a $12 million reduction in local funds. Local funds are budgeted to go down by about $600 per pupil or over 6%.   Enrollment is increasing by 2,500 students. This could mean reductions in ESL teachers, eliminating full-day kindergarten, cutting improvements in technology, slashing supplies by over $1 million.  No one gets a raise.  

Loudoun acknowledges that the stimulus funds are out there but feels that not enough information is known at this time to appropriate those funds.

However, it is clear from State Education Dept. documents that Loudoun will get $11 million from the revenue stabilization funds in 2009-10 and at least that much in 2010-11.  Estimates of additional IDEA money for 2010-11 top $9.5 million - funding which can be used over both 2009-10 and 2010-11.

The Board of Supervisors is considering withdrawing even more local money -- taking out an amount in local funding equal to the total of the stimulus money. Schools would be left in the same sorry state they were before the stimulus money came through.

Isn't it too cautious to ignore all stimulus funds and anticipate a continuing recession through 2011-12?  Can Loudoun really afford to abandon schools for a couple of years?  Will Johnny and Jennifer recover from a year of shared paper, few other materials and underpaid teachers and support personnel?

4.  Bringing Virginia Localities to Use the Federal Stimulus Funds as Intended:  Pittsylvania County
Pittsylvania County is a relatively small school division (8,741 students) in Virginia's Southside region near Danville.  There is controversy in the county regarding the utilization of the stimulus funding.  The citizens of Pittsylvania voted in November of 2007 to adopt a bond package for renovation and construction at the county's four high schools with the understanding that the bond obligation would increase the tax rate by 9 cents per one hundred dollars of assessed value (from 53 cents to 62 cents/the mean rate in Virginia is 70 cents).  Some members of the Board of Supervisors are supporting the use of the stimulus funds to decrease the 62 cent real estate tax rate by 4.5-6 cents.

Pittsylvania will receive $3,587,347 of Federal Stimulus funds from the Commonwealth through direct aid distribution.  Usually direct aid requires a local match, but as these are non-general fund revenues, no local match is required.  This sum was used to backfill (use federal funds to make up for state cuts) cuts in the K-12 formula.  In addition the county will receive $1,315,842 in Title I funding and $2,298,000 in IDEA funding.  Fifty percent of these two sums will be released by USDOE by the end of March 2009.

The Pittsylvania School Board has constructed a budget that saved all school positions and kept employee salaries level.  The Board of Supervisors is now moving to cut this budget while at the same time going forward with a new 3,000-acre "mega" industrial park.

Of Virginia's 132 school divisions, Pittsylvania currently ranks 106th on local capacity to fund education and 120th in effort.  In total spending per pupil the rank is 126th, and the teacher salary ranks 94th.  Clearly this is a division where the funding could be used to improve educational programs as intended rather than for tax abatement and other county government projects.

The local education association stands with the school board in advocating for proper use of the stimulus funds.  A final vote by the County Board of Supervisors is anticipated on April 6.

5.  Bringing Virginia Localities to Use the Federal Stimulus Funds as Intended:  City of Winchester
As this year's budget development began, the City Council of Winchester indicated to the appointed school board that the school budget would need to be reduced by $1 million.  This would drop city support for the schools from $27 million to $26 million.

The school board prepared a budget including this cut.  Twelve positions were eliminated by attrition and programs were pared.

As the state budget process moved along, it became apparent that Winchester would receive $1 million in stimulus funds through direct aid appropriated in the state budget and $1.26 million in IDEA and Title I.  The council then demanded an additional $1.5 million in cuts.  Reference was made to the need to increase the reserve accounts.  It should be noted that Winchester currently has a $26,842,432 reserve (37% of expenditures), and that there was no draw on the reserves in 2009.

If these additional cuts are made there will be additional positions eliminated and programs, including remedial and at-risk, will be further pared.

This is a clear and blatant example of misuse of the stimulus funding which was intended to save jobs and enhance programs.  The local association and school board stand united in support of proper use of the stimulus funds.

What Can You Do?
We are doing all we at the federal and state levels to require that the funds be used as intended.  But, what is happening with your local school board budget?  Is the money falling off the truck?

How do you know how much stimulus money is coming to your locality?  It takes a few steps.  First, how much is coming through the state budget?  Follow these steps:

Go to http://www.doe.virginia.gov/
Click on DOE Offices
Click on Finance
Click on School Division Deposit and Locality Ledger Reports
Click on Budget Office
Calculation Templates
Right Click on Excel Template -- Save on Desktop
Look for Click Here to Continue (Click on that Box)
Select School Division
You'll see the stimulus funds near the bottom of the chart.
If you can't make this work, call your UniServ Office or VEA for the information.

How much is coming through Title I and IDEA (not through the state budget)?  This is easier.

1. Go to http://www.learningpt.org/recovery/
2. Select Virginia
3. Select your school divison
4. Look for the information

The ARRA fact sheet of the USDoE web site will give you the policy information you need to take on local elected officials who say, "I'm not sure that we can use the stimulus money to prevent lay-offs, to attract and retain educators or to enhance programs."
 
http://www.ed.gov/policy/gen/leg/recovery/factsheet/stabilization-fund.html

Time is short.  Your locality is going through the local budget adoption process now. Talk to your local president and your UniServ director as to how you can help.  Effort now will keep the money on the truck all the way to your school.