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As money for teachers flows, some states have other ideas

Duncan threatens retaliation for noncompliance

By Libby Quaid
Associated Press / March 31, 2009
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WASHINGTON - President Obama promises his economic stimulus will save hundreds of thousands of teaching jobs, but some states could end up spending the money on playground equipment or wallpaper - and the president might not have the authority to stop them.

Obama has said nearly all the education money, which starts going out to states this week, is designed to retain teachers.

Education Secretary Arne Duncan threatened to "come down like a ton of bricks" on anyone who defies the administration's plans to bring relief to states like California, where 26,500 teachers have gotten pink slips.

Across the country, 9 percent of teachers - about 294,000 - face layoff because of budget cuts, according to a University of Washington study.

But plans for the money are pulling in other directions, particularly in states with Republican governors: Governor Linda Lingle of Hawaii wants to fill a budget gap, Governor Butch Otter of Idaho wants to hold the money in reserve; and Governor Mark Sanford of South Carolina wants to pay down debt. His request has been turned down by the White House Budget Office.

There are loopholes in the stimulus for both states and school districts.

Of the $100 billion for education, $40 billion comes as part of a fund to stabilize state and local budgets that has fewer strings attached. As the bill made its way through Congress, lawmakers decided not to prohibit states from using the stabilization money to replace state aid for schools. State lawmakers and governors in Kansas, Rhode Island, and Texas are among those seeking to use their federal stimulus dollars to replace state aid, rather than add to it.

The law was written so broadly that most of the stabilization dollars can be spent on just about anything - carpet, wallpaper, playground equipment, even new school construction - which might bother Senate moderates who insisted on dropping a school construction program before they would vote for the bill. That's because school districts can spend the money as federal impact aid, a relatively small program for poorly funded districts. By contrast, most federal education dollars are supposed to be spent on teacher salaries or academics. "Congress opened a Pandora's Box to allow districts to use the funds for impact aid," said Michael Brustein, a Washington lawyer who represents several state education agencies. "How you enforce against that is anyone's guess."

Duncan said he can come down hard on states that don't comply because he is releasing the money in installments, and because he will award billions of dollars in competitive grants later this year.

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