Federal Priorities and State Funding

The Obama Administration, through education secretary Arne Duncan, seems to be pursuing a two-track strategy regarding national education policy. One track emphasizes positive incentives such as “Race to the Top.” The other encourages states to seek waivers from No Child Left Behind. It is too soon to know whether the incentive approach is working. It has received a lot of positive press. But the actual results aren’t in yet. The waiver strategy seems to be working, though. A majority of states have requested and received waivers. In return, those states have agreed to adopt accountability plans approved by Washington.

It has long been a basic tenant of Washington policy and politics to use money to get states to do what they might not otherwise do. In education, it goes back to 1965, and the birth of the federal Elementary and Secondary Education Act. By accepting federal dollars, states agree to abide by federal law and regulations. No Child Left Behind was merely the latest iteration of ESEA, with more dollars and more regulations. The fact that congress has failed to reauthorize the nation’s fundamental education law – and the fact that many in Washington and the education establishment see real flaws in it – has led Duncan to employ the waiver strategy as a means of giving states relief while getting them to accept his accountability approach.

It is interesting to note, however, that Washington is really in no position to enforce national education policy should states decide to not abide by it. The department of education has neither the resources nor the ability to determine whether or not the nation’s approximately 14,000 school districts are complying with federal law. State and local policy makers and administrators know this. Yet they still tend to try to comply, even as they complain about the regulations and mandates that come with federal money and even though the federal money accounts for a fraction (about 10%) of what states spend on K-12 education. The fear of losing that money drives compliance.

But how real a threat is it?  How often has Washington actually punished states for failing to comply with federal education policy by taking away some federal money? When we were implementing NCLB during its early years, we recognized we were overseeing a “house of cards.” Politically, if a number of states banded together to resist the law it would be next to impossible to penalize them by withholding federal dollars. The states’ congressional delegations would flex their political muscles to force some resolution favoring the states and the department would in all likelihood have to cave. If this happened then the fact that the fed is something of a toothless tiger when it comes to national education policy would be exposed. Besides, no administration had ever withheld money from a state due to compliance issues. Instead states entered into compliance agreements with Washington, getting their money by agreeing to gradually get their education house in order.

During President George W. Bush’s first term, however, the department did withhold federal Title I state administrative dollars from two states – totaling about $1.5 million – due to compliance issues. It was an unprecedented action that received almost no attention in the press.  It was a calculated move that got the attention of the state and local education establishment, however, and provided some leverage as we tried to enforce the law. But there were and there remain political risks to such action.

Duncan’s waiver strategy is built on the ongoing belief that states will do what Washington says in order to get Washington money. He has been able to advance his education agenda with that threat. Going forward, it will be interesting to see how much he can accomplish employing what is, in reality, such a hollow threat.