Watson warns federal education dollars would go to other states
The chair of Tennessee’s Senate Finance, Ways and Means Committee is issuing a warning that rejection of federal K-12 education funds would send Tennessee taxpayer money across the nation.
Sen. Bo Watson, a Hixson Republican, said he is comfortable making a thorough review of federal requirements attached to education funds, nearly $1.9 billion in this year’s budget, but he has a word of caution as well.
Watson told a Hamilton County group over the weekend he sees “no harm in evaluating” the use of federal dollars.
“But what everyone needs to understand is that federal tax dollars that come back to Tennessee are Tennessee taxpayer dollars, and so if you elect not to take those dollars, which we could do, you have to realize you’re sending that money somewhere else, and that’s Tennesseans’ tax dollars,” Watson said Tuesday.
The legislature and Gov. Bill Lee are turning down more than $1 billion a year already by refusing to expand Medicaid to serve more than 300,000 uninsured and underinsured people across the state. Lawmakers killed a proposal by former Gov. Bill Haslam called Insure Tennessee to expand Medicaid, and Lee has declined to renew the idea despite Democrats’ pleas.
Watson’s comments come as a group of House and Senate members is set to study federal education funding, the mandates placed on the state to receive the money and potentially a recommendation to reject it.
House Speaker Cameron Sexton, R-Crossville, broached the idea early this year, before he and Lt. Gov. Randy McNally, R-Oak Ridge, opted to form the panel for a review this fall.
The state received nearly $2.5 billion from the federal government in fiscal 2021-22 when the nation was at the height of the pandemic and more than $1.9 billion last fiscal year. The fiscal 2023-24 budget contains federal funding of $1.89 billion, most of which goes toward nutrition, Title I programs for low-income children and special needs students as part of the Individuals with Disabilities Education Act.
More than a third of Tennessee’s $56.2 billion budget comes from the federal government.
Sexton said recently the state has to spend money to make sure it is handling the federal dollars properly, raising questions about whether the state can operate more efficiently.
Concerns about federal education funds and the regulations attached to them are longstanding, Watson said. Conservatives have been trying for decades to eliminate the U.S. Department of Education.
During the August special session on public safety, Watson raised concerns about a “hole in the budget” when lawmakers spent about $110 million on a variety of programs.
Tennessee’s revenue report for the first two months of fiscal 2023-24 showed the state came up short of projections, more than $7 million in September, mainly because business tax collections were weaker than expected, not because of a shortfall in sales tax collections.
Despite the weak revenue report, Watson declined to express those same reservations about rejecting federal education funds, saying it’s important to make the study first. “My interest in this deep dive is more about … what are the requirements attached to those dollars, and then the discussion is do we want to accept or reject those requirements, which then leads to the discussion of, well, can we afford to reject those requirements or can we reject some of the requirements and some of the money but keep others,” Watson said.
The group is set to hold a handful of meetings the first two weeks of November before it makes a recommendation. Watson predicted the governor’s budget plan for fiscal 2024-25 will contain the federal K-12 funds and any other federal dollars the state typically receives.
But if lawmakers decide to forgo the funds, it would be up to him and House Finance Chair Patsy Hazlewood, R-Signal Mountain, to direct the legislature in finding a way to offset the loss of that money. It’s too early to say where money could be shifted to replace federal funds, Watson said.
The panel should be able to find out how much of the federal money makes it to the classroom, Hazlewood said Tuesday.
“That would determine the additional cost for the state to take on this role,” she said in a text statement. Then, the legislature would be able to decide what action to take.
The state accepted billions in federal funding during the pandemic, including $4.2 billion for K-12 education through three congressional acts, one approved under President Joe Biden and two under former President Donald Trump. The money went to efforts to improve literacy and help students rebound from time out of the classroom, as well as a math textbook adoption and online learning resources, innovative high schools, mental health support, professional development and improving the state’s teacher pipeline.