Tennessee Lawmakers Hold First Hearings on Rejecting Federal Education Funds

The Department of Education in Washington on July 22, 2019. Alastair Pike/AFP via Getty Images

Over the past two weeks, a group of lawmakers in Tennessee have held committee hearings discussing a controversial proposal to reject federal education funding, citing certain “strings” that are attached to the federal dollars.

Lawmakers and experts explored the intricacies of federal funds, their impact on local education, and the role of state legislatures in overseeing these funds.

The joint working group on federal education funding, appointed in September by Tennessee’s House Speaker Cameron Sexton and Lt. Gov. Randy McNally, both Republicans, is set to report its findings in January when the Tennessee General Assembly comes into session for 2024.

While representatives from the U.S. Department of Education were set to testify to the committee, Chairman Sen. Jon Lundberg said on the morning they were set to appear that they would instead answer questions in writing.

Mr. Lundberg said the department informed the committee they were unable to attend the task force meeting because they could only offer “technical assistance” to them and asked members to submit questions in writing—adding they would be included in their January report if they were received in time.

Tennessee relies on approximately $1.8 billion in federal program grants annually to support various educational services, including those for economically disadvantaged students, students with disabilities, career and technical education, and school nutrition.

These federal funds directly benefit nearly 1 million students, along with over 100,000 teachers and school staff across the state.

During the working group’s meetings, no specific federal funding areas to reject were proposed or discussed. Mr. Lundberg has emphasized that the group’s efforts are not aimed at cutting any specific programs.

“I want to correct, I think, what some people have as a misperception of people … who think we’re here to cut education funding,” he said. “There is no word in any document, and I don’t think any plan from any member of this working group, to cut $1 of spending. There is discussion about what comes with federal dollars that we receive, and what we’re looking at is, are we not only getting the bang for the buck, but what kind of onus comes on the state when we receive those federal dollars?”

He said it was “obvious” that if the state decided to reject federal funding, the “onus would be on” Tennessee to replace those funds.

New Territory

In the first week, the committee focused on the practical implications of rejecting federal education funding, such as the impact on local school districts.

Republican state Rep. John Ragan raised questions about staffing and administrative requirements in schools as well as whether Tennessee could gain more control over its educational policies by refusing federal funds.

In many occasions, he received an answer akin to the witness saying they didn’t know because of the unprecedented nature of what the lawmakers are debating.

“Specifically, I think that would be one of those questions that would sort of go beyond my understanding,” Austin Reid, a federal education policy analyst at the National Conference of State Legislatures, said at one point. “And again, this would be sort of new territory. So I’m not sure if anybody has a great answer for that question as there’s not a lot of precedent for this.”

Steve Johnson, a fellow at the Center for Practical Federalism, provided insights into the opportunity cost associated with federal funding.

He pointed out that while federal funds may provide financial support, they also come with a significant burden of paperwork and compliance.

In particular, he mentioned the challenges faced by special education teachers in creating individual education programs (IEPs) for students. These IEPs aim to provide personalized learning plans for special needs students, but the extensive paperwork requirements consume valuable teaching time.

Mr. Johnson highlighted that teachers often spend hours filling out paperwork and focusing on compliance, and less time directly engaging with their students. This, he noted, is an opportunity cost, where educators could be more effectively utilizing their time for teaching.

Federalism and Innovation

As for independence costs, he said that when a state accepts federal funds, it often entails relinquishing certain freedoms and autonomy.

Mr. Johnson provided an example from the Every Student Succeeds Act, which mandates that high schools must provide colleges and military recruiters with the contact information of all their students.

The U.S. Department of Education building is seen in Washington on July 21, 2007. Saul Loeb/AFP via Getty Images

This raises privacy concerns, he said, as parents may want to control the dissemination of their child’s information. However, the federal government does not allow an opt-in option, forcing schools to comply with this mandate.

Mr. Johnson argued that accepting federal dollars entails giving up aspects of independence and self-determination as a state, as these funds often come with strings attached that limit local decision-making.

“So those are the types of things that you lose when you take those federal dollars,” he said. “It’s not just the monetary costs, which is important to note, but it’s also those opportunity costs and the independence costs that you lose.”

Mr. Johnson emphasized what he said was the “beauty” of federalism, where states serve as “laboratories of democracy.”

In a federal system such as ours, he said, each state has the opportunity to experiment with different approaches and policies to address various issues.

However, when federal funds come with strict mandates and regulations, it limits states’ flexibility to innovate and adapt to their unique circumstances.

Mr. Johnson argued that by rejecting federal funds, Tennessee could regain the freedom to innovate and tailor educational programs to better suit the needs of its students.

“If you were to turn down these federal funds, it would allow you to innovate in a way that no one else does right now,” he added. “Because you have the money to backfill, it’s not a question of number of dollars, it’s a question of, are the rules that are tied to it worth it? Or could you or local school districts do it in a better way, because they actually know their students, more than some bureaucrat in D.C. would.”

Florida Rejection of COVID-Related Funds

Witnesses testifying to the committee spoke of a prior instance of the state of Florida rejecting some COVID-related funding.

Sal Nuzzo, senior vice president of the Florida-based James Madison Institute, shared insights into how Florida handled a similar situation of rejecting federal funds in the past.

He also cautioned the lawmakers to look at their job as not only looking at what “strings” may be attached to federal dollars during the current and upcoming school year, but to consider that the strings and conditions attached to federal dollars are not static.

“They can and do change at the discretion of the federal government and the bureaucrats in charge there, regardless of whether or not they serve our students’ best interests,” he said.

In 2021, he said, Florida had calculated that the costs to accepting post pandemic educational funding to the tune of $2.3 billion outweighed any benefits and they passed on the opportunity.

He said while the U.S. Department of Education said the quality of education in Florida would be “hampered” by the rejection of funds, the governor stated no district had articulated “a need for funding” that could not be met by state dollars.

Florida’s decision to reject federal COVID funds for schools was influenced by the federal government’s bypassing of state law by directly sending money to schools that defied state laws about masks and in-person learning, he said.

This move was seen as a way to incentivize schools to continue COVID-era practices, even when the state made masks optional. Despite being the only state to do so at the time, Florida chose to walk away from the third installment of federal funds.

Florida passed a significant K–12 educational choice program this spring, leading to improved student achievement rates, he claimed.

In 2020, the state’s fourth and eighth graders achieved their highest-ever rankings on national assessments, and there was notable progress in closing achievement gaps for at-risk students, including Hispanic students, black students, and those with disabilities, who ranked in the top 10 in various categories.

“So clearly, we aren’t suffering for having passed on $2.3 billion in federal education funds,” he said. “I would argue quite the contrary.”

Criticisms and What’s Next

The group has yet to set its next meeting date, but members of the committee said it would likely be after Thanksgiving.

Some groups representing those with disabilities as well as parents have criticized the lawmakers for not allowing them to testify during the last two weeks of hearings.

The Tennessee Disability Coalition said in a social media post that the committee “refused to hear from the disability community,” while linking to an online petition.

The group claims that the rejection of federal education dollars could put important programs for disabled students as well as low-income students “on the chopping block.”

Mr. Johnson also highlighted the need to coordinate with the Department of Education to understand funding application timelines.

“It would be helpful to know, ‘Hey, when are you going to apply for these dollars?’ When should the Legislature, if we’re going to do something, when do we need to make that decision,” he quipped.

The committee will submit its report in January.