Education Secretary Arne Duncan says districts that use stimulus money to maintain costs risk losing a second round of federal funding. (Chip Somodevilla / Getty Images)
U.S. Secretary of Education Arne Duncan has warned that he will hold back federal stimulus money if states and school districts don't spend it properly. That's fair warning for Michigan, where local districts short on money may see the funds as an opportunity to plug budget holes.
Duncan announced this week his department will be the only U.S. agency that will send states the first half of their designated stimulus money. The aim is to build in an incentive to use the money on innovations in education, rather than simply shoring up the status quo.
Many Michigan districts want to use the stimulus funds to fill budget gaps or pay for teachers' health care costs, though neither improves students' educational learning.
Duncan said districts that use the stimulus for such maintenance costs will hurt their states' chances of receiving the remaining federal dollars.
Only states and local districts that use the first round of funding on strategies proven to boost student achievement will receive the second half of stimulus money, he said.
"They need to think differently about how they use their money," he emphasized during a conference call with reporters.
Within weeks, millions in stimulus dollars will flow into the coffers of Michigan and its school districts. Grand Rapids will get close to $47 million, Lansing about $41 million and Benton Harbor more than $5.5 million.
Detroit, one of the state's biggest winners, will get more than $500 million.
There are good reasons to be concerned these districts will not spend the aid appropriately.
The Detroit Public Schools, for example, in 2007 provided summer remedial classes to just 15 percent of its third-, fourth- and fifth-graders who failed to reach proficiency in math and reading tests. The district actually returned $16 million of unused federal money.
State Superintendent Mike Flanagan should create a merit-based system to dole out state-controlled stimulus dollars. He should also work to ensure the money is spent on long-term strategies such as a statewide program to cut the dropout rate.
The challenge will be districts that will receive some stimulus money directly from the federal government. If they misuse the money, the entire state may lose out on additional funds.
"If they miss this golden opportunity, it will be a moral crime," says Sharif Shakrani, co-director of Michigan State University's Education Policy Center.
Michigan will have to stay on top of how the money is used from the moment it arrives in the state.
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