As the new administration settled into their seats in Washington DC, President Trump and Sec. DeVos made many announcements regarding shifting priorities for the Federal Department of Education. Headlines have included significant changes to school choice, accountability, funding eligibility, the status of the Common Core, etc.
Whether you are a vendor or an educator, whether you favor the Trump/DeVos pronouncements or not, the real question you should be asking is: Can they do that? Can the White House and the DOE actually make all the changes they are announcing?
The answer to this question is particularly important as Educators and Vendors prepare for their first year under ESSA. Unfortunately, few people are going to like the answer.
A topic this big has a lot of variables ranging from basic constitutionality to the role of the federal government in education. For our current purposes, we are going to avoid deep theoretical underpinnings and simply focus on two issues for the 2017/2018 fiscal year:
- Who has the FY2018 money?
- How is it going to be spent?
Role of Federal Government in State and Local Schools
For the past 20 years (give or take), Federal funding has steadily grown until it provides roughly 15-20% of the typical school districts budgets. Schools with greater poverty or academic performance issues receive 25-30% of their funding from the federal government. These percentages are allocations of the school’s total budgets. Since local and state funds are spent primarily on mandatory expenses (utilities, wages, etc.), Federal funding is the leading source of discretionary spending for most schools. Bottom line: Federal funding is very important to almost every vendor in the K12 market.
Now, this is where the role of the DOE and Executive Orders becomes important for everyone to understand. Laws are made by the legislative branch or Congress in this case. Congress also appropriates money each year to support what it believes is necessary for those laws to function as intended. It is true that the President submits an annual budget request to Congress each year, but it is Congress that actually controls the budget and appropriates the money.
Executive Orders & The Administration’s Influence Over ESSA Roll-Out
The Executive Branch (which includes the President and the DOE, which reports to the President) is in charge of executing the law. It usually does this by overseeing the Rules & Regulations designed to help administer the law as provided by Congress. The procedures directing the distribution of federal funds is usually spelled out in the Rules & Regs. And while the DOE can’t appropriate funding, it is empowered to enforce the Rules, distribute the funding, and hold recipients accountable.
If this sounds like a lesson from Civics 101…it is. A few more points and the present situation will become clear.
The President exerts his control over funding through Executive Orders (which are widely misunderstood). Executive orders do carry the full force of law, but they only apply to organizations and individuals within the Executive Branch. Further, Executive Orders cannot be used to contradict or overturn laws passed by Congress. By late 2015, both Congress and the White House agreed that NCLB had been poorly written and had allowed far too much room for the Executive Branch (which includes the DOE) to encroach upon State rights assured in the Constitution. The loopholes in NCLB were so big, in fact, that the Obama administration waited until their last year in office to reauthorize the Education Legislation. It was easier for them to control access to federal education funding through Executive Order and the DOE than it was to push their agenda through Congress.
Why Is This More Important With ESSA Than It Was With NCLB?
So, ESSA was written in such a way that it makes it very difficult for the Executive Branch to assert its will on states that receive federal funds. Congress closed many of the loopholes created by NCLB and the former President signed off on that action. The only two mechanisms the law allowed for the DOE was to oversee the enactment of the Rules & Regs and to approve State Accountability Plans which are called for by ESSA and must be peer reviewed and approved before funding can be distributed.
It took the DOE all of 2016, and groundwork in all 50 states, to create ESSA Rules & Regs and get them out to the States (State Education Agencies or SEAs) in time for the 2017 State legislative sessions and school planning cycles. Unfortunately, these Rules & Regs were scrapped by the current administration in March. The underlying Law, ESSA, is unchanged and the timeline for implementation was written into the law not the Rules & Regulations. This means ESSA rolls forward unless it is changed or amended by another act of both houses of Congress.
So, here is the score on the 2017 school Federal discretionary spending:
- Congress is proceeding on its typical path for appropriating discretionary funds for the 2018 fiscal year. The budget is supposed to be passed by Oct 1, but is unlikely. Don’t worry. Continuing resolutions will be used to keep funds flowing until the final budget is actually finalized.
- No ESSA Rules & Regs are in place to govern the distribution of funds to the states through the DOE.
- 17 States have submitted Proposed Accountability Plans but none have been approved.
- Essentially all 50 states have until 17-SEP-17 to submit their Accountability plans. The DOE then has 120 days to approve or reject them (roughly mid-January 2018).
- Executive Orders and DOE priorities are likely to have little impact on the funds budgeted and allocated by Congress. States will have the final say in spending once their State Accountability plans have been approved.
- Federal funds for the current school year typically begin arriving in local School District bank accounts by late Oct/early Nov each year. The mechanisms are not in place to approve, allocate or distribute federal funds to schools yet. This is, without question, the biggest hurdle faced by schools and suppliers.
- Availability of state and local education funding for this school year will vary from state to state.
Circling Back to the Two Important Questions
Very little is secure in the FY2018 education funding picture. The assumption that things will proceed “business as usual” is literally impossible. Lacking Rules & Regs, States and Federal Regulators must proceed under their interpretation of ESSA directly. Disagreements are left to the Judicial branch to sort out (let’s hope things don’t get this bad).
So—Who has the FY2018 Money? The good news is that funds are well into the appropriation process by all federal, state and local legislative bodies. The bad news, since ESSA changes federal funding equations and accountabilities there isn’t a mechanism to get funds to the States and then to school districts in a timely manner. This challenge will impact small and medium businesses much harder than large providers. Funds will eventually get to schools. When it will get there is the big question.
And—How is it going to be spent? In accordance with the requirements of ESSA and the 50 new State Accountability plans. But, since the first Accountability Plans have yet to be approved, it is extremely difficult to identify the impact of the State Accountability Plans on spending. Again, these factors will eventually be worked out, but small and medium vendors will need to plan carefully to ensure they can stretch until schools make final decisions and eventually receive funds that can be paid out to suppliers
Download the ESSA State Accountability Process Infographic now!
Download the 2018 ESSA Budget & Appropriations Infographic now!