Sustenance, not stimulus

State substituted bulk of stimulus dollars for basic grants to maintain programs
2010-02-22T00:05:00Z Sustenance, not stimulusBy Carmen McCollum -, (219) 662-5337

One year after federal stimulus dollars flowed into Lake and Porter county school districts, several region education leaders said the bulk of the money supported existing programs, not job creation.

And some region superintendents wonder if the few new jobs created will be sustainable when federal aid no longer flows.

It all came down to how the state chose to distribute the stimulus dollars, with Indiana leaders choosing to use most of the money to support existing programs -- and then placing the state dollars that normally supported those programs into a rainy day fund.

Hebron schools Superintendent George Letz said the money was not used the way in which he thought it was designated by Congress and President Barack Obama.

"I had understood the Obama administration wanted the money to be used to provide personnel and programs to help our students improve their achievement level, but instead the government took the money and substituted it for basic tuition support," he said.

East Porter County School Corp. Superintendent Rod Gardin said he wasn't surprised by what the state did, but he didn't know it was going to happen that way.

"We didn't receive any extra money," he said.

Indiana State Budget Director Christopher Ruhl confirmed the federal stimulus money was used to provide basic tuition support dollars for school districts, allowing the state to squirrel away funds that normally would have been used for that purpose.

"The state dollars saved were placed in our education rainy day fund," he said. "The special session budget required those funds be transferred from the education rainy day fund to the state general fund in 2010 to support school funding. We made that transfer in December."

All the state's reserves and rainy day funds are expected to be used over the life of the two-year budget, including 100 percent of the education rainy day fund, Ruhl said. The budget, which runs through June 2011, was built on revenue projections that haven't panned out, setting up the need to drain the $1 billion in state reserves.

Ruhl contends the state's process for stimulus funds allowed for smaller education funding cuts than would have been necessary because of plunging state income and sales tax revenue.

"To be blunt, without the $610 million transfer, the size of the education reduction would have needed to be dramatically higher than the modest reduction we directed starting in January to address the persistent revenue shortfalls, maintain solvency and protect against a massive tax increase on Hoosier families and businesses during a recession," Ruhl said.

Of the $610 million in stimulus money that supported school general fund budgets across the state, $69.6 million went to school systems in Lake and Porter counties. When factoring in stimulus money for other education initiatives, including Title I and special education programs, the total stimulus cash flowing to schools in the two counties was at least $118.1 million, representing about 47 percent of local stimulus dollars.

Lance Rhodes, chief financial officer for the Indiana Department of Education, said no one anticipated the state taking such a "terrible downfall," including serious revenue shortfalls in April, May and June of last year.

Tom Dykiel, Lake Central School Corp.'s finance director, said his district used the money mostly for salaries and benefits.

"We didn't get anything extra. The money was not used to stimulate or create new jobs," he said.

However, Dykiel said a few new positions were added in the special education department through the West Lake Special Education Coop, of which Lake Central and Munster are members.

Terry Spradlin, associate director of the Center for Evaluation and Education Policy at Indiana University in Bloomington, said part of the objective of the stimulus dollars for K-12 education was to sustain jobs.

So, in that regard, the stimulus dollars have helped during this school year.

"Now, because of the state cuts to school funding, significant layoffs appear imminent next school year despite the federal funds," he said of the nearly $300 million education cut the state announced in December. "Schools are facing a tsunami of funding changes, cuts and restrictions that will require them to manage their budget like never before."

Merrillville Superintendent Tony Lux is one of the superintendents who created new jobs with Title I and special education stimulus dollars. However, Lux said he doesn't know if Merrillville Community School Corp. will be able to sustain the jobs once stimulus funds disappear.

"We felt we owed it to our students to hire teachers, aides and tutors to help improve their reading skills," he said. "We received extra money in Title I and special education. We used it as best we could for our kids."

Among the stimulus dollars received, the district shared a $377,000 technology grant with Tri-Creek School Corp., Lux said. Merrillville used $269,316, and Tri-Creek used the remainder. The districts used the money for classroom computers for students in first through sixth grades.

Hebron's Letz said the school system received $632,933 for its basic grant. It also received $45,000 for Title I and $234,323 for special education over two years.

Letz said a part-time teacher who works with the Response to Intervention team was promoted to full time. He said the district also used the money to hire several aides who work with students.

"We're grateful we have the money, because we wouldn't have been able to hire these aides or make this teacher full time otherwise," he said, adding the district will address the issue of retaining new employees after next year.

Superintendent Mike Benway said Valparaiso Community Schools followed the suggestions of state officials and did not create any new positions with the special education and Title I dollars, instead using the money to support existing programs.

Rob James, director of business services for the School City of Hammond, said his district received $3.9 million for Title I and $4.2 million for special education. He said the district created 26 new positions in the special education department, hiring mental health therapists, a bilingual speech therapist and psychology interns.

James said the district's food service department received a $105,000 stimulus grant that was used to buy ovens and cafeteria equipment.

Thea Bowman Leadership Academy, a charter school in Gary, received $975,490 in stimulus dollars. Of that, $324,071 went to special education. Director Gwen Adell said she added one teaching assistant, and "we'll be able to maintain that position even after stimulus dollars are gone."

How you can be a stimulus watchdog

Anyone with Internet access can track stimulus spending by state, county and neighborhood using the Obama administration's stimulus Web site at By clicking on Map Central, a link under What's New at the middle of the page, you can upload a searchable "blue" map of all stimulus awards as reported by the agencies and organizations benefitting from the awards.

You can also upload a searchable "gold" map in which all data comes from the federal agencies disbursing the money. The maps can be searched by state, county, congressional district or ZIP code. For example, plugging Munster ZIP code 46321 into the search bar generates a map with 12 blue dots from Lansing to Griffith. Clicking on a blue spot on Ridge Road in Munster brings up information showing that South Shore Arts Inc. is the prime recipient of a $50,000 grant that will create or save 1.73 jobs. It also includes the information that "preserving jobs in the nonprofit arts sector" is the award's primary purpose. Clicking on a blue dot on 173rd Street in Hammond shows the Hammond Housing Authority is receiving $10 million and also includes detailed information on how the money is being used to rehabilitate the Columbia Center Housing project.

For a quicker search, plug a ZIP code directly into a search bar on the home page just below the big blue map at the top of the page.

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