The reality of Recovery Act funds: They helped!

More teachers will be on the job in Iowa in the coming month and class sizes will be more manageable because Recovery Act funding saved positions in recent years.

Mike Owen
Mike Owen

A new report offers one illustration of the value of funds provided to the states under the American Recovery and Reinvestment Act (ARRA) — also known as the “stimulus” bill.

Aside from political arguments about ARRA, one thing that is undeniable is that it helped Iowa lawmakers get funds to Iowa schools at a time state revenues were coming in short.

IPP Research Associate Andrew Cannon’s report on education in funding in Iowa, “World-Class on a Shoestring Budget?” notes that a decade-long decline in K-12 funding has reversed course (measured in inflation-adjusted dollars), beginning in 2009, the first of three years of the temporary ARRA help. As his report notes:

The American Recovery and Reinvestment Act (ARRA) allowed Iowa, during the leanest years of the recession, to continue funding education at levels comparable to and even higher than prior years. As those Recovery Act funds expired at the end of June, the end of the state’s fiscal year, Iowa lawmakers chose to provide state funds to replace Recovery Act funds.

While it might be expedient to complain about “one-time funds” being used for ongoing expenses in the state budget, that is precisely how ARRA funds were designed to be used. Effective stimulus policy, as the Iowa Fiscal Partnership and others have noted, is supposed to be temporary, timely and targeted. State fiscal relief in times of revenues shortfalls is one of those approaches, and in this case, education funding in Iowa was sustained at more traditional levels than otherwise would have happened. More teachers will be on the job in Iowa in the coming month and class sizes will be more manageable because that funding saved positions in the last few years.

Cannon’s full report — six pages, plus a four-page appendix of data tables on education funding — may be found here.

Part of making Iowa students educational achievers is to encourage critical thinking skills — the skills that will teach them to check the facts about programs such as ARRA before listening to the political talking points.

Posted by Mike Owen, Assistant Director

Author: iowapolicypoints

The Iowa Policy Project is a nonprofit, nonpartisan organization that provides research and analysis to engage Iowans in state policy decisions. We focus on tax and busget issues, the Iowa economy, and energy and environmental policy. By providing a foundation of fact-based, objective research and engaging the public in an informed discussion of policy alternatives, IPP advances effective, accountable and fair government.

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