Probably the least understood aspect of funding education is the fact that state education departments send back unspent federal funds every year.

Unspent Federal Funds Available:

No Child Left Behind has made significant new resources available to states and local school districts, but some states and school districts have not been able to take full advantage of these resources. According to the Department of Education, as of December 11, 2003, a total of nearly $6 billion in Federal education funds remained unspent, waiting to be drawn down by state officials. These funds are from amounts appropriated in 2000 through 2002.

The total includes nearly $2 billion in No Child Left Behind Title I funds intended to benefit disadvantaged children across America. The total also includes more than $1.6 billion in unspent No Child Left Behind school improvement funds that provide extra help to struggling schools, and nearly $2 billion to assist children with disabilities. Some of the money has been in the account since fiscal year 2000, more than a year before No Child Left Behind was even enacted.

In Tennessee alone, more than $116 million in Federal education funds have not been spent, including nearly $43 million in No Child Left Behind Title I funding for disadvantaged students and schools that was provided by Congress from fiscal year 2000 through fiscal year 2002. The total also includes more than $33 million in unspent No Child Left Behind school improvement funds that are meant to be used to provide extra help to schools, and more than $30 million to assist children with disabilities.

A new USDOE Office of the Inspector General (OIG) Audit reports that State Ed. Depts. failed to spend $56 million in IDEA Part B funds for the years 1998-2000 (the period audited). Unspent IDEA B funds can be carried over until the next year if certain conditions are met; otherwise the grants lapse. These grants are in danger of lapsing.

Dee Alpert, publisher of the Specialeducationmuckraker has the story and more. She suggests: "So when your State Ed. Dept. and district tell you that special ed. is soooo expensive and they don't have the money to provide what your child needs, point them to this audit and ask how much the State Ed. Dept. didn't spend, and may lose, in federal special ed. funding."

TOSSING MORE MONEY AT EDUCATION FAULTY

Tyler (Texas) Morning Telegraph EDITORIAL August 04, 2004

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It has been disproved many times, but Americans still cling to the idea that the solution to just about any problem is more money.

This may explain why people buy lottery tickets knowing they face almost impossible odds of winning, and also are aware of stories about how some who have won have discovered they continue to have problems, sometimes worse than before.

There is another example where the political theory that applying enough money will solve any problem, and that is in federal spending programs. Few such programs turn out to be as successful in practice as was promised, and the big thing they have in common is an ever-increasing need for more money.

The federal education policy is an example. Since 1965, federal spending on education has grown tremendously. It was $25 billion that year and had grown to an inflation-adjusted $108 billion in 2002.

States have hit it big in this federal spending game, but the results raise new questions about the problem-solving magic of more money. Student achievement during the last three decades has remained flat despite the huge infusion of federal money, most assessments conclude.

Those figures strongly indicate the "more money" approach has failed, but not everyone is ready to abandon it, or even attempt to determine why it hasn't worked better.

For instance, presidential candidate John Kerry recently announced that if he is elected, he will provide states with $20 billion over the next decade to hire more teachers and boost their pay. Kerry promises to pay for that by repealing some of the Bush tax cuts.

Then there is the Democratic platform, which claims that President Bush is underfunding the No Child Left Behind law, providing "$27 billion less than he had promised, literally leaving millions of children behind."

That makes a nice soundbite, "But the truth is that the last thing states need right now is even more federal money," observed Edwin Feulner, president of The Heritage Foundation. He cites figures showing the states already have more than they can spend.

The Education Department recently reported that all 50 states, the District of Columbia and eight territories are sitting on piles of federal cash - some $2.7 billion remains unspent.

At least part of it was intended to help poor children, disabled students and limited English learners. But it hasn't been spent, and the federal government has warned that unless it is, at a minimum, earmarked for a specific project by Sept. 30, the states will have to return it.

This isn't a new thing in 2004. Last year, states returned $154 million in unspent federal education funds. Not that states haven't tried.

"We try to spend every penny that the federal government sends us," Debbie Ratcliff, a spokesperson for the Texas Education Agency, told the Associated Press after the state sent $11 million back last year.

Those figures make charges of federal underfunding of education seem preposterous.

Before deciding to shovel untold billions more to states in education funds, the No Child Left Behind program should get a chance to work, Feulner said. The long-term goal is for every student to be fully proficient in reading and math within 12 years.

It is up to states, not the federal government, to set standards and many states didn't even get a plan in place until last year, he pointed out. States and school districts are setting up accountability programs, trying to find ways to ensure teacher quality and designing public school-choice programs.

Judging a federal program on spending alone doesn't give much of a picture on its success. Determining whether it is delivering as promised also is vital. Education analysts say it will take a few years to know if the current program is working.

But with states returning hundreds of million dollars in designated education funds unspent it should be obvious underfunding is not the problem.

School finance suit begins Monday
By JENNIFER WILSON, The Amarillo Globe-News, August 8, 2004
jennifer.wilson@amarillo.com
The Amarillo Globe-News

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It's no secret: The Texas school finance system needs fixing.
The Legislature took a stab at the problem during a special session this year. But legislators left Austin with no solutions and more questions.

More than 300 school districts are hoping the court system does better.

Rich and poor, rural and urban districts have joined forces in a school finance lawsuit that challenges the way the state funds education. The trial starts Monday in Travis County, and it's expected to last six to eight weeks.

Many Panhandle districts are involved in the suit, including Amarillo and Canyon school districts.

Three groups of plaintiffs are taking part in the suit: West Orange-Cove CISD, Alvarado ISD and the Mexican American Legal Defense and Educational Fund, or MALDEF.

This year, Amarillo ISD joined the Alvarado plaintiffs, a group of more than 260 property-poor districts, Superintendent Rod Schroder said.

"The suit is about the state's funding system. Primarily there are concerns about the equity of the system, the adequacy of the system and the constitutionality of the system," Schroder said.

Property-poor and property-rich districts are frustrated by a funding system, nicknamed Robin Hood, that is relying more and more on local property taxes for its biggest source of income. State funding has steadily declined, reports show.

As their state funding drops, more districts hit the $1.50 maintenance and operations tax rate cap - and at that point they can't generate more money. Some districts also contend that the $1.50 cap amounts to a statewide property tax, which is unconstitutional.

"The poor districts look at adequacy and say, 'We're at $1.50. We're maxed out.' So we have no place to go for extra resources and we still don't have an equitable system in the state," Schroder said.

Schroder is on the executive committee of the Alvarado plaintiffs, and attorneys could call him as a witness during the trial, he said. Attorneys have already videotaped his deposition.

Buck Wood, an attorney with the Austin-based law firm Ray, Wood and Bonilla, said the suit's goal is to make the state fund schools in an equitable way.

"We are also seeking a court order requiring the state to live up to its constitutional obligation to fund its fair share of the 'real world' cost of providing both an equitable and an adequate education for all our children," Wood said.

The West Orange-Cove plaintiffs group consists of 47 rich and poor districts across the state, attorney Mark Trachtenberg said. Trachtenberg's Dallas-based firm, Haynes and Boone, is one of two firms representing West Orange-Cove districts.

Also included in West Orange-Cove are some of the state's largest districts, including Houston, Dallas and Austin, Trachtenberg said.

Trachtenberg's side will try to prove the state's education funding system doesn't provide enough money for districts to meet the standards imposed on them, he said.

"Our districts are simply out of financial capacity," Trachtenberg said.

Schools in Lawsuit

West Orange-Cove plaintiffs: Darrouzett, Lubbock, Miami, Pringle-Morse

Alvarado plaintiffs: Amarillo, Booker, Borger, Canyon, Childress, Dalhart, Dimmitt, Grandview, Hart, Hereford, Kress, Pampa, Panhandle, Samnorwood, Sanford-Fritch, Texline, Tulia, Wildorado

With the new Texas Assessment of Knowledge and Skills tests, more rigorous high school requirements and a stringent curriculum, districts don't have enough money to hit state-imposed targets, he said.

"We are asking the court to declare the school finance system unconstitutional. That's our goal in the legal sense," Trachtenberg said.

While Amarillo ISD and Canyon ISD are named as plaintiffs in the suit, other local districts not named as plaintiffs are still staying involved.

Highland Park ISD contributed to the cause financially, Superintendent Vicki Line said. All plaintiffs also paid to join the suit.

"We can participate and show our position in the matter by signing up as a nonplaintiff," Line said.

The Legislature hasn't hammered out a school funding solution, but the courts might do better, she said.

"I have a great deal more confidence in the courts deciding the issue than the Legislature at this point," Line said. "I would hope that the courts will give the Legislature a directive that will force them to truly look at this issue."


Missouri is just embarking on what could be a years-long court battle over the way it funds public schools
by KELLY WIESE, kansascity.com, October 9, 2004
Associated Press

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JEFFERSON CITY, Mo. - Missouri is just embarking on what could be a years-long court battle over the way it funds public schools. And already, more than one-half million dollars has been spent on the case, largely on attorneys' fees.

Missouri taxpayers could get hit with an especially large bill, because they will be paying private firms both to defend and challenge the law.

Most states around the country have had their methods of paying for education challenged at one time or another, and some groups have racked up millions of dollars' worth of legal expenses.

In many states, the attorney general's office handles the defense of the state's school spending decisions, and it's not unusual for private lawyers or nonprofit organizations to represent schools in lawsuits without getting paid, legal experts say.

But in Missouri, both the school districts that brought suit and the attorney general's office defending the state are paying private lawyers to help with the case, in addition to work done by the attorney general's office staff.

The private attorneys already have cost about $645,000, according to figures provided to The Associated Press.

The lawsuit by school districts claims Missouri does not spend enough on public schools and distributes what money there is unfairly.

The school districts that filed the lawsuit hired Husch & Eppenberger, with Jefferson City attorney Alex Bartlett leading the case. Bartlett successfully handled a 1990 case that led to the formula that's now under attack.

Plus, another batch of districts has stepped in to the case separately, agreeing with the plaintiffs on inadequacy of funding but worried over what could happen with its distribution. They hired their own attorney, Audrey McIntosh.

The state in January hired the Atlanta-based law firm Sutherland, Asbill & Brennan to assist the attorney general's office in defending against the lawsuit. The attorney general's office said legislative leaders were involved in selection of the firm, which has helped defend other states that faced challenges of their school funding systems.

Before the case is over, the litigation cost could be in the millions, experts say. A look around the country illustrates their point.

The firm that Missouri hired also worked for New York state, which lost its case last year.

The firm's services cost New York taxpayers $11.4 million. Attorneys for the schools asked the courts to make the state pay them $20 million for their work on the case, but failed.

The cost of a school lawsuit in South Carolina is estimated at more than $10 million. The state has spent $3.7 million in legal fees and expenses defending its funding system. Officials said South Carolina school districts have spent $2.25 million, while a law firm said it has contributed $4.6 million in time and resources representing the school districts. That court fight began more than a decade ago.

In Arkansas, the school-funding system was declared unconstitutional in 2002 after a decade in court. The state Supreme Court ordered the state to pay the school district's lawyers $3.4 million, but that was far less than the more than $30 million they sought.

Missouri is paying the Sutherland firm a base rate of $295 an hour per lawyer for at least seven lawyers, up to $90 an hour per paralegal, plus reimbursement for things such as travel and hotels, according to documents provided to The Associated Press. Payments are made through the state's Legal Expense Fund, whose budget is approved by the state Legislature.

As of this week, the state has paid the firm more than $251,000, including legal fees, travel and other expenses, the attorney general's office said.

Meanwhile, Bartlett said his firm charges the districts an hourly rate of as much as $200 per lawyer, which he said is about 25 percent lower than its typical rates.

The districts that sued, calling themselves the Committee for Educational Equality, spent more than $244,000 through late September, mostly on legal fees, according to its leader, Tyler Laney, the Crane School District superintendent.

In all, 256 of the state's 524 districts are part of that group and are contributing to the case based on the number of students. The other group of districts, with 34 dues-paying members, said it has spent about $150,000 so far.

Laney said it's "disturbing" that the money is going to lawyers rather than schoolchildren, but said it's time the state Supreme Court weighs in on the issue.

He said experts the districts want to use "come at a premium price" and the group originally estimated it would cost $1 million to challenge the school funding method, but with the Sutherland firm getting involved, that may not be enough.