Ed Money Watch

A Blog from New America's Federal Education Budget Project

< Back to the Education Policy Program

Friday News Roundup: Week of January 28-February 1

Published:  February 1, 2013
New Mexico faces loss of up to $93M in federal special ed funds for violating grant terms
 
Controversial California school bonds create ‘debt for the next generation’
 
Cost-cutting measures could save University of Texas $490 million in 10 years, panel says
 
Education reform aims to expand Ohio voucher program, reduce funding gaps
 
New Mexico faces loss of up to $93M in federal special ed funds for violating grant terms
Between $43.5 million and $93.0 million could be withheld from New Mexico’s federal special education grants in future years. The state has reduced spending in recent years on special education programs that receive federal funding in violation of the U.S. Department of Education’s “maintenance of effort” requirements, which aim to prevent states from replacing state funding with federal money. The state reduced spending below prior-year expenditures on special education by $15.3 million in 2010, and again by $28.2 million in 2011. New Mexico requested a waiver in August 2012 from the maintenance of effort provision for both fiscal years, citing unforeseen state financial resource constraints. The state recently learned, however, that it may not receive that waiver, and will instead be penalized for its decreased spending. The budget uncertainty has legislators concerned about moving forward with education appropriations for fiscal year 2014. More here…
 
Controversial California school bonds create ‘debt for the next generation’
Faced with a growing need for additional school facilities and taxpayers’ unwillingness to fund new capital projects, many California school districts have moved toward an unconventional form of funding to finance major projects: capital appreciation bonds. The bonds have allowed districts to borrow billions of dollars while delaying repayment; in some cases, payments are deferred for several decades. For instance, the Napa Valley Unified School District took out a $22 million loan in 2009, but will not begin making payments until 2030. That means that by the time the debt is repaid in 2049, it will have cost over seven times the amount borrowed, or $154 million. According to data compiled by the California Treasurer, Bill Lockyer, more than 400 districts in California have incurred over $9 billion in capital appreciation bond debt, which will cost taxpayers $36 billion over the next four decades. Other states, including Michigan, have prohibited this type of borrowing. More here...
 
Cost-cutting measures could save University of Texas $490 million in 10 years, panel says
As the University of Texas requests increased state appropriations for basic operations, capital investment, and financial aid, it also hopes to demonstrate a commitment to cost-cutting. Some of the proposals the administration is considering include consolidating purchasing systems, selling excess electrical power, charging more for room and board, and other measures that cut costs or increase revenues. These proposals would save the university over $490 million in the next decade – ranging from $92 million from selling surplus electricity from the school’s natural gas-fired power plant to $200 million from centralizing human resources, information technology, and finance and procurement functions. University President Bill Powers indicated that the recommendations will not interfere with faculty and teaching. More here…
 
Education reform aims to expand Ohio voucher program, reduce funding gaps
Ohio Governor John Kasich has introduced a $15.1 billion school funding plan for fiscal years 2014-2015 that seeks to reduce spending gaps between poor and wealthy school districts. Property tax is a highly variable source for education funding, so the governor’s plan creates a minimum funding level for all districts across the state, decreasing that variability. Specifically, all districts would have a funding level equivalent to $250,000 of property value for each pupil within the district. The plan also expands the state’s tax-funded voucher program for low-income students, available for any entering kindergartener with a household income below 200 percent of the federal poverty level. The vouchers would be worth up to $4,250 per year and could be used at any participating private school – schools would not have the option to charge tuition beyond the voucher amount. The plan budgets for $8.5 million in voucher support the first year, and $17 million in the year following. More here…

Join the Conversation

Please log in below through Disqus, Twitter or Facebook to participate in the conversation. Your email address, which is required for a Disqus account, will not be publicly displayed. If you sign in with Twitter or Facebook, you have the option of publishing your comments in those streams as well.