Federal funds may miss schools

Emergency federal funding intended to protect New Hampshire teachers' jobs may never reach school districts if the money is used instead for other state spending, as happened in the past.

New Hampshire's estimated $41 million share of the $10 billion federal stimulus measure for education will flow to Gov. John Lynch's office, not directly to schools.

Lynch's office said the U.S. Department of Education has not written the guidelines governing the money. Lynch spokesman Colin Manning said that when the guidelines are written, the governor will develop a plan for the money. He declined to comment further on its use.

Democrats in Washington, D.C., argued the emergency funding was needed now, before children return to classrooms with teachers laid off because of recession-driven budget problems. Federal education officials estimated the $41 million due New Hampshire would save 700 teachers' jobs - a figure local education officials say is too high.

Mark Joyce, executive director of the New Hampshire School Administrators Association, said an association survey has determined roughly 200 jobs had been cut going into this school year. Joyce also said it is unclear whether any jobs will be preserved or restored if the state keeps the money instead of sending it to schools.

"It is a concern that the money finds its way to school districts," he said.

Joyce has reason to worry. The state - with Lynch's support - substituted federal education stimulus funds for state tax-funded school aid in the current budget. State tax money was freed up from being spent on school aid and used instead for other spending, including state aid to communities.

The federal law calls for the money to be distributed either to schools under the Title I formula - which targets schools with high concentrations of low-income students - or through the state's aid formula. Not all schools receive Title I money.

Keith McCrea, spokesman for the New Hampshire chapter of the National Education Association, said the hope is some of the laid-off teachers will be rehired.

"We're afraid that larger class sizes and the inability to hire new teachers was going to become the new normal," he said.

The state also is sharing in $16 billion in increased Medicaid payments to states in the federal law. The money is intended to free money for states to meet other budget priorities, including avoiding laying off police officers and other public employees.

New Hampshire had already planned on getting additional Medicaid money when it closed a projected $295 million budget gap in June using a combination of spending cuts, borrowing and potential land sales.

New Hampshire plugged $48 million in anticipated Medicaid funding into the budget fix, but Health and Human Services Commissioner Nick Toumpas said Wednesday the stimulus bill signed by President Obama is expected to provide $29 million instead. That is because New Hampshire's unemployment rate dropped to 5.9 percent and states with higher unemployment rates get more money.

Some congressional estimates projected New Hampshire would get $54 million, but Toumpas and other state officials say that is unlikely.

New Hampshire also is awaiting word from federal officials who are recalculating Medicaid funding under the prior stimulus authorization that covers July 1 to Dec. 31. With the drop in unemployment, the state could get less funding than anticipated.

The June budget fix also counts on getting $60 million from the sale or lease of state properties. The commission charged with recommending possible sites held its first meeting Aug. 5. It is to issue its final report Jan. 1, leaving lawmakers with six months to sell or lease $60 million in property.

Despite these uncertainties, Manning said, New Hampshire's budget is balanced, and no further cuts are planned. (next page »)