NCPA - National Center for Policy Analysis


July 28, 2009

Although more than $100 billion is being doled out for education purposes, most of it is unlikely to improve student achievement and may even impede progress toward that critical goal.  The driving force behind the stimulus package seems to be to spend the money quickly, meaning that past spending priorities and patterns will be largely replicated, rather than spending it effectively to meet our educational goals, say Eric Hanushek, education economist, and Alfred Lindseth, expert in school finance law.

The stimulus package largely reinforces the failed policies of the past.  For example:

  • An especially egregious element is the $100 million addition to the impact aid program, which was introduced in 1950 to provide funds in lieu of taxes for schools located near military facilities (which did not pay taxes).
  • The program was later expanded to include aid for Native American schools.
  • The distribution of funds under the program is, however, not only highly inequitable but an inefficient way to support those schools.
  • Thus virtually every administration since the 1960s has tried to eliminate the program; now it is being expanded.

The total stimulus package simply locks in a set of bad policies because only 2 percent of it explicitly supports innovation and improvement, say Hanushek and Lindseth.  Two provisions that will help education policy move in the right direction include:

  • Additional funds that are targeted for improved state data systems to enable better decision making.
  • And funding being provided for states' experimenting with performance pay for teachers.

The biggest hope for real progress, however, lies in the roughly $5 billion in discretionary money provided to the secretary of education, say Hanushek and Lindseth:

  • If he uses those funds to encourage and reinforce programs that provide incentives for higher achievement, and if states apply for and take advantage of them (not a given in states unwilling to change the traditional way of doing things and spending education dollars), some real progress could be made.
  • If, on the other hand, he succumbs to political pressures to maintain the status quo, the highly touted educational component of the stimulus package is unlikely to result in better student outcomes and may actually make truly effective reform even more difficult to achieve.

Source: Eric Hanushek and Alfred Lindseth, "An F in Effectiveness," Hoover Digest, No. 3, Summer 2009.

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