The first four sessions of the Federal Education Funding Working Group have concluded, leaving some lawmakers with more questions than answers.
The meetings were called by House Speaker Cameron Sexton to look into so-called “strings attached”, or rules, imposed by the federal government on more than $1 billion in recurring funds to state education. Tennessee would be the first state to ever turn down federal education funding, which is what the panel is tasked with deciding.
Between Monday and Tuesday, the 10-member panel, co-chaired by Sen. Jon Lundberg and Rep. Debra Moody, heard from educators and research experts, questioning them on how federal funds are used and allocated. The U.S. Department of Education declined to testify.
The Sycamore Institute reported that districts that are most dependent on federal education funding have the most students in need. Within the 28 most dependent Tennessee school districts, 43% of students are economically disadvantaged, according to the report. Sycamore also noted that 95% of the locales within these school districts are considered rural.
Mandy Spears, Sycamore’s deputy director, warned that legislators would need to develop plans for a smooth transition for districts.
“No one’s ever rejected K-12 dollars, so a lot of this is unknown,” she said.
These dollars are going to our homeless students, they’re going to our students who are learning English for the first time, they’re going to our students who are in poverty...Hank Clay, chief of staff of Metro Nashville Public Schools
Several experts concurred that there were many unknowns, including how the state could resolve conflicts with federal requirements. Some strategies could include requesting waivers, seeking changes to federal law, or working with other states to explore federal law changes, according to Austin Reid, senior legislative director of the National Conference of State Legislatures.
Spears said legislators would need to consider how this decision would affect future state requests for federal funding. There is currently no clear process to opt back into receiving federal funds if Tennessee were to change its mind later on, since no state has ever opted out.
Spears provided data showing that Tennessee’s revenue collections fell short of expectations by $330 million in 2023, a historic low after several years of budget surpluses. However, she added, “There’s still probably about $2.2 billion in recurring revenues that are available before any additional revenue growth for the 2025 budget. So, that would be more than enough to cover the 1.1 billion the state typically receives for K-12 education.”
“How sustainable will this be?”
Some of the most notable discussions came during the third session, during which the panel interviewed four school district leaders including Matt Hixson, director of Hawkins County School District; Marlon King, superintendent of Jackson-Madison County School System; Toni Williams, superintendent of Memphis-Shelby County Schools; and Hank Clay, chief of staff of Metro Nashville Public Schools.
King said that one of his primary concerns with rejecting federal funds is about sustainability.
“How sustainable will this be, when I think long term?” he asked. “If I get down the road five years, and the metric of funding changes, then that puts me in a position where we have to think differently or we have to approach our funding body to support us.”
Rep. Ronnie Glynn asked King if there are “strings required” for state and local dollars in addition to federal. King said, “Absolutely.”
“So there’s strings with any money that you get, pretty much,” Glynn said in response.
Sen. Hensley asked Clay if he thought there would be more flexibility in teaching students if there were no federal rules attached.
“Frankly, I hope that we have a moral responsibility to spend it much in the same way,” Clay replied. “These dollars are going to our homeless students, they’re going to our students who are learning English for the first time, they’re going to our students who are in poverty, our students with disabilities. I hope that we’ll have the moral obligation to do the same thing.”
Clay also said that if there’s money on the table for education, it should be added to education funding.
“It’s supplement, not supplant,” he said. “Our students deserve it.”
Hixson supported this notion, questioning if surplus state funds could be used to “close the gap” between lower-income and higher-income district revenues.
“If there is a potential for evening the playing field or closing that gap, there may be avenues other than looking at just replacing federal funds as a whole, and maybe looking at what our rural or poorer districts that have the biggest needs can get additionally from the state, if we’re talking additional revenues that you’re willing to offer,” Hixson said to the panel.
Sen. Raumesh Akbari agreed.
“If we have extra funding, let's give it to schools instead of rejecting funds we already receive,” Akbari said.
Akbari then asked the four leaders what “strings” they have found attached to federal funds that have made it more difficult for schools to utilize them. None of the four answered.
“That’s an answer,” Akbari said of the lack of replies.
The four leaders also discussed how current education funding in Tennessee is already “pulled so thin,” as Clay expressed it. Issues with school infrastructure and adequate teacher pay were two top concerns for the leaders.
Williams said that over half of the 160 school buildings in her district are over 100 years old. She also said that her district had to close an elementary school after the ceiling fell in, and that they have faced issues with mold.
“Just think about having 160 schools and trying to prioritize when there’s announcements of teacher compensation and pay, and trying to have competitiveness in the market where nationwide everyone’s struggling to compete and retain and keep teachers, versus roofing, HVACs,” Williams said.
Schools currently don’t get building maintenance funds from the state - those funds come directly from local taxes. Hixson said that choosing between having adequate funds to maintain buildings and keeping local taxes low puts school leaders in a challenging position.
“On a state level, if there is any possibility where we have the financial situation to turn down two billion dollars in federal funding, and have to make that up in state funds, surely if we have that level of wealth or excess or surplus, we can actually use those funds to make a difference in these school buildings with a roof that’s 50 years old,” Akbari said. “We say that we lead the nation and we have kids who are in schools where roofs fall in.”
After dismissing the four school leaders, Sen. Lundberg said he was “feeling a little frustrated.”
“I get the feeling that everyone that comes before us is defensive… It’s not about taking this money away, our charge is about what is coming from the federal government,” Lundberg said.
The hearings will conclude next week.
(This story was co-produced with students from the University of Tennessee's Department of Journalism and Media.)
