Senate Democrats seek federal guidance on stimulus money
Thu April 16, 2009 5:32 pm

Senate Democrats sent a letter today to Secretary of Education Arne Duncan asking for clarification about the use of State Fiscal Stabilization Funds in its recently-adopted budget, specifically whether the spending plan incorrectly supplants general revenue with federal money intended for schools.

"We are requesting specific guidance on whether the Senate's decision to supplant general revenue using SFSF is an allowable use under the ARRA (American Recovery and Reinvestment Act)," the letter states. "Our concern lies with the fact that the SFSF was used to supplant general revenue in the Senate budget, swapping out --dollar for dollar state funds for federal funds."

At issue is $3.25 billion that the Democrats believe should go directly to school districts.  A coalition of Texas school superintendents has already sent a similar letter to Duncan.

The letter includes a transcript of a Finance Committee hearing in which a Legislative Budget Board staff member refers to "swapping GR for stimulus funds" and Sen. Florence Shapiro says, "so we've taken the money in the stabilization fund and, for lack of a better word, and I know we hate this word, supplanted it for our general revenue."

More from the letter:

"Some may argue that the Senate budget's supplanting of general revenue is an allowable use of SFSF, as the State would have had to tap into its Rainy Day Fund, an economic stabilization fund, to balance the budget. We disagree with this excuse. By 2011, the Texas Comptroller is predicting that the Rainy Day Fund will have over $9.1 billion  Instead of using that funding to pay for needs facing the state education system today, state leaders believe it is instead wiser to park the funding for use as future property tax cuts that primarily benefit the wealthy."

"We urge you to release specific guidance on the use of SFSF by the Texas Senate budget. Using funding from President Obama to balance the budget on the backs of Texas' at-risk children is neither the right nor the moral choice,"  the letter concludes.

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