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This State Would Be the First to Reject Federal K-12 Funds. But It’s Far From a Given

It’s not uncommon for politicians to throw around the idea of rejecting federal education funds and getting out of the requirements that come with it.

But now Tennessee has gone further than any state before toward refusing the money, creating a legislative task force that’s exploring the idea of saying no to the hundreds of millions of dollars in education funds it receives each year from Washington under the Elementary and Secondary Education Act and other laws.

The group of lawmakers, which held its first meetings last week, is charged with determining whether the state can replace the money it receives from the U.S. Department of Education with state funds so it wouldn’t have to comply with the mandates tied to the federal funds.

The move in the Republican-dominated Volunteer State comes as more conservative politicians are calling for the end of the Education Department and criticizing Biden administration efforts to explicitly protect LGBTQ+ students under the federal anti-discrimination law Title IX. It also echoes earlier calls to reject federal funding that circulated when the No Child Left Behind Act was first introduced and states were wary of the administrative burdens and consequences of the school performance and accountability rules it introduced.

The exercise in Tennessee could clearly illustrate what’s at stake if a state were to follow through and forgo education funds from the federal government.

Tennesse House Speaker Cameron Sexton and Lt. Gov. Randy McNally pulled the 10-member working group together in September after floating the idea of rejecting federal funds since February.

If the panel determines the state has a path forward to reject the funding without cutting necessary programs, the state’s General Assembly and Senate pass a measure to do so, and the state’s governor signs it, Tennessee would become the first in history to reject money from the Education Department.

Such a decision would risk funding streams intended for specific groups of Tennessee students and schools, including Title I funding for schools that serve larger populations of students from low-income families; funding for students with disabilities under the Individuals with Disabilities in Education Act; and funding for English-learner and career-technical education programs, among others.

But during the task force’s initial meeting on Nov. 6, lawmakers denied any suggestion that they would be reducing education funding.

“There is nothing that tasked this group with cutting one dollar of education funding and there is no precursor to the outcome of what this committee, what this task force, is going to do,” state Sen. Jon Lundberg, a Republican, said at the start of the meeting.

No clear vision for rejecting funds

Sexton said early this year that Tennessee would “be able to educate the kids how Tennessee sees fit” and without “federal government interference” if it rejected federal education funds.

But none of the lawmakers involved in the creation of the task force have clearly identified which federal mandates they’d like to sidestep—only that they don’t want to be beholden to strings attached to federal funds.

The lack of clarity makes it hard to predict how a decision to reject federal funding would play out in the state, said Mandy Spears, the deputy director of The Sycamore Institute, a Tennessee-based public policy think tank.

“There hasn’t been a ton of clarity around exactly what the mission of the workgroup is, other than to explore federal funding and the requirements associated with it,” Spears said. “There are a lot of unanswered questions about, well, if the state rejected funding, how would it replace those dollars?”

The debate is unfolding in a state that’s more reliant than most on federal money for education.

In 2019-20, before states saw an unprecedented influx of federal K-12 funding from three COVID-19 relief packages, Tennessee received over $1.1 billion in total federal education funding, according to the National Center for Education Statistics. That accounted for 10.1 percent of public education revenue in the state, whereas nationwide, the federal government supplied only 7.6 percent of education funds. Tennessee ranked 17th among states for the percentage of education revenue that came from the federal government.

Furthermore, more than half of Tennessee’s students, 53.5 percent, attend districts that rely on the federal government for 10 percent or more of their revenue, according to an Education Week analysis. That’s the sixth highest percentage in the nation. Ninety-nine of the state’s 141 districts depend on federal money for at least 10 percent of revenue.

If the state were to reject federal K-12 funding, it would have to make up for those losses—or districts might have to do away with staffing and resources for programs that support students with disabilities, English learners, school meals, and career and technical education.

“In theory, any state could decide to fill that gap with state revenue,” said Nora Gordon, an economist and professor at Georgetown University. “That seems pretty unlikely. It’s a lot of money, and if they were going to spend it they probably wouldn’t choose to spend it according to the same formulas that govern the federal funds.”

Plus, such a refusal would come as districts are already contending with a drop in federal funding as they face a Sept. 30, 2024, deadline to commit the third and final—and largest—round of COVID relief funds.

Tennessee schools received over $4.5 billion from those relief funds, according to the Tennessee Department of Education.

Low-income students, students with disabilities are the most at risk

Of all the federal school funding Tennessee receives, 93 percent supports five programs—Title I; IDEA; the U.S. Department of Agriculture’s school meals program; Title II, which funds teacher professional development; and Perkins V, the grant program that supports CTE, Linda Weston, assistant director of the office of research and education within the Tennessee state comptroller’s office, said during the Nov. 6 meeting.

The remaining funds support English learners, afterschool and summer programs, rural schools, and charter schools.

In exchange for money under Title I, which accounts for the largest share of federal education funds, states must set content standards, conduct annual tests, and establish a school accountability program. The grant is allocated based on the share of low-income students in a district, so districts with higher proportions of low-income students and families receive more money.

Prior to the pandemic, in 2019, the federal government allocated over $318 million to Tennessee in Title I funding. Schools spend most of that money on reading and math interventionists and other academic support staff, Weston said.

Rejecting Title I funds could have massive implications for Tennessee’s low-income students and public transparency around school performance, said Zahava Stadler, project director of the Education Funding Equity Initiative in the Education Policy Program at New America, a national policy think tank.

“The question has to be for any state saying, ‘well, we want to do academics our way, we don’t want to do tests, we don’t want to have to do this kind of reporting,’ is: Who are you underserving and why don’t you want to tell anyone about it?” Stadler said.

Rejecting IDEA funds has similar implications for students with disabilities.

The state received over $265 million under IDEA in 2019 to help provide students with disabilities with a free and appropriate public education, which is the requirement under federal law. States must develop individualized education programs, or IEPs, for students with disabilities, which identify the academic goals and services those students should receive.

Tennessee also has a state law that requires schools to develop IEPs for students with disabilities, so if the state were to reject IDEA funding, IEPs wouldn’t go away unless the state rewrote its law, Weston told task force members.

Ultimately, the Tennessee legislature and Gov. Bill Lee, a Republican who has signaled his support for the legislative working group, would make the final decisions on rejecting particular federal education funds.

Calls to end ED, reject federal funds are perennially popular

While Tennessee is the first state in recent history to take the steps it’s taking to reject federal K-12 funding, its lawmakers are far from the first politicians to pitch the idea.

Earlier this year, Oklahoma state Sen. David Bullard, a Republican, introduced a bill that would phase federal education funding out of the state’s schools over a decade. The bill, introduced in February, has yet to make it out of committee.

And a group of conservative state education chiefs, including Ellen Weaver of South Carolina, Ryan Walker of Oklahoma, Manny Diaz of Florida, and Jacob Oliva of Arkansas, called on the U.S. Congress to abolish the U.S. Education Department during a panel at the Moms for Liberty national summit on June 30.

In the lead-up to her election in November 2022, Weaver suggested that South Carolina could reject federal funding if the U.S. Department of Education finalized its proposed changes to Title IX, which would include explicit protections from sex discrimination for LGBTQ+ students and bar schools and states from implementing outright bans on transgender athletes’ participation in school sports, the Post and Courier reported. So far, in more than a year since Weaver’s election, the state hasn’t taken any significant action to reject funding.

There’s been so little action to reject the funding mostly because it’s hard to justify. Even in Republican-dominated Tennessee, such a move is far from a given, Spears said.

“That would require not only a majority on board in the General Assembly but also making pretty substantive changes to the governor’s budget in the midst of a legislative session,” she said. “There will still be a lot of procedural and political hurdles to reach that point.”

The working group has until Jan. 9 to develop a report for the rest of the legislature, which will inform the General Assembly’s budgeting decisions.

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