Race to the Top fund puts cart before the horse

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Last Tuesday was the due date for first-round applications for President Obama and Education Secretary Arne Duncan’s Race to the Top Fund. It was also the day Obama announced he’d ask for another $1.35 billion in the FY2011 budget to continue the program a third year. Coincidence? No. A good idea? Doubtful.

Race to the Top (RTTT) is a $4 billion kitty of stimulus dollars put at the disposal of the Department of Education to affect long-overdue reform in the states. With state budgets tight, in education in particular, the siren song of a few more (millions of) dollars to plug holes is certainly enticing. It’s probably no coincidence then that the requested dollar amounts on the applications of not a few states roughly correspond to the amount they need to be in the black next year (and are quite a bit north of the department’s own dollar-amount recommendations).

As it stands, RTTT will have two rounds. The first set of applications was due earlier this week; 40 states and the District of Columbia applied. The first set of winners will be announced in April, while the second round’s applications are due in June.

But to add a third round at this point should make us wary and here’s why.

• It’s premature. We haven’t seen the results of round one, let alone round two. And we should be duly skeptical of whether or not the Department of Education will stick to its policy guns after it eased its original application guidelines in response to pressure from various anti-reform interest groups. The competition is based on a points system—various reforms are worth different amounts—but there is still some room for interpretation. For example, the RTTT application guidelines call for states to garner buy-in from affected parties, such as teachers’ unions and local districts. But some states like Louisiana have strong applications—but only 28 of the state’s 70 districts have said they’d play along. Many of the reforms that count for big bucks on the RTTT application are unsavory to education status quo interests—teacher evaluations will reduce union membership, raising charter caps will provide more competition for district-run schools—so it makes sense we’d see them push back. But does it also make sense that we rely on the buy-in of these obviously disincentivized interest groups to support reform? We need to see how the department handles these kinds of difficulties.

• It sets a precedent. RTTT is a competition; only 15 states will win, says Duncan. But don’t worry, those who don’t get anything the first round can apply for round two. And round three? Another 15? Not much of a competition when 45 out of 50 states get a prize. The trick to RTTT’s success as a competition will be actually keeping it competitive. Asking for big changes and rewarding the select few who follow through on them. But putting the competition on a yearly schedule (next January, who wants to bet Obama announces he’s asking for a fourth year of RTTT money?) makes competitiveness that much more difficult. And that leads us to the problem of entitlement. As with most federal spending, once the cat’s out of the bag, it’s very hard to stuff it back in. Over time, dollars get built into state and local budgets and taking them away turns into a PR nightmare for the feds. The result: yet another annual federal spending program we can hardly afford, and an easy way out for districts and states in the red. Why balance budgets, track spending, or make unsavory layoffs if the feds will simply step in when the going gets tough?

• It defeats the purpose. Similarly, turning this into a yearly event seems counterintuitive. There’s been quite a bit of worry that once stimulus dollars run out in two years, states and districts will be left high and dry without the funds to continue stimulus-funded programs. (Though stimulus dollars were supposed to plug holes, the fact of the matter is that they were also used to start new programs, hire more folks, or buy new equipment.) There’s been little discussion of how RTTT dollars will be spent once the winners are selected. Will they wind up plugging post-stimulus holes? It hardly seems the appropriate way to keep the cash lines open, especially since the point of the competition was to innovate reform, not support the status quo. Again, we need to see how the Department handles these questions.

• It’s overly optimistic about the federal purse. RTTT has resulted in some huge state legislative breakthroughs. It’s safe to say that many of these improvements were the direct result of Obama and Duncan’s very juicy green carrots. But we’ve also seen an unsettling amount of eleventh-hour compromises that have resulted in less than optimal legislation. Yes, the bills got passed, but along with a whole slew of amendments and last-minute clauses that in some cases took the sting out of the law or sacrificed one reform for another that might be higher on RTTT’s list of priorities. Are we better off now as a result of those changes? Probably. Are they perfect? Definitely not. Federal dollars are a distinctly blunt instrument; we can entice states to do reform, but no amount of guidelines, speeches, or personal visits by Duncan can force a state to do reform well.

• And it’s fiscally irresponsible. For the past 100 years, public schools have largely lived outside the realm of economic reality. Sure, technically, they had a bottom line—a budget that allowed so many people to be on the payroll, so many programs to be in place, so many students to be served—but in the end of the day, when things got tough, education spending kept going up. Taking money away from children is certainly every politician’s worst nightmare. Even during the current fiscal crisis, there haven’t been any big cuts in places that matter. A program was nixed here, a few teachers were fired there. Nothing big. No massive self-evaluation of how dollars were being spent. No complete rethinking of how we staff schools. Extending RTTT is part of this illness. Not because it will ultimately shell out more federal dollars, though that’s worth noting, but because it would be another example of spending without any evaluation of effectiveness. Let’s not sully the good RTTT has done so far by turning it into another federal handout.

RTTT has exceeded many of our wildest expectations, but to ask for more dough before we’ve even gone through the first round is inappropriate. To be clear, the concern is timing. RTTT may prove itself ultimately as a worthwhile, well-managed, and truly competitive program. But until that happens, we shouldn’t be thinking about extending it.

Stafford Palmieri is Associate Editor and Policy Analyst at the Thomas B. Fordham Institute, a Washington, D.C.-based education policy think tank dedicated to education policy reform.