How Many Teachers Will $10 Billion in Additional Stimulus Rehire?

On August 11, President Obama signed a $26 billion jobs bill to aid state payrolls. $10 billion of was targeted for schools. Not counting bank bailouts, over $1 trillion in stimulus money has been authorized, most of it already spent wasted.

The Washington Post comments ...

All told, according to a recent paper by economists Alan S. Blinder of Princeton University and Mark Zandi of Moody's Analytics, Congress has authorized more than $1 trillion in fiscal stimulus. Rescue efforts for the financial system, including the Troubled Assets Relief Program and actions by the Federal Reserve, are not included. The authors -- supporters of the stimulus -- estimate that the ultimate cost to taxpayers for all federal actions in response to the recession will be around $1.6 trillion.

Despite those expenditures, the economy continues to struggle. The prospect of layoffs or tax increases by state officials who are almost uniformly required to balance their budgets remains a major worry. The package approved Tuesday represents less than a quarter of the $116 billion shortfall that states face over the next two years, according to the National Governors Association. "This isn't plugging the hole. This is helping to transition," said David Quam, NGA director of federal relations.

Schools have been particularly hard hit. With the start of school just a few weeks away, class sizes have been on the rise across the country, school bus routes have been cut and a plethora of programs, including summer school, arts, physical education, and health and counseling services, have been slashed. Some school systems even trimmed the length of the school year to make ends meet. As of this month, it remained unclear exactly how many workers had been let go.

How Will $10 Billion Be Spent?

The goal of this recent stimulus effort was to save the jobs of 160,000 furloughed teachers and other employees. Inquiring minds are wondering how many teachers will actually be recalled.

The New York Times addresses the issue in Given Money for Rehiring, Schools Wait and See.

As schools handed out pink slips to teachers this spring, states made a beeline to Washington to plead for money for their ravaged education budgets. But now that the federal government has come through with $10 billion, some of the nation’s biggest school districts are balking at using their share of the money to hire teachers right away.

With the economic outlook weakening, they argue that big deficits are looming for the next academic year and that they need to preserve the funds to prevent future layoffs. Los Angeles, for example, is projecting a $280 million budget shortfall next year that could threaten more jobs.

“You’ve got this herculean task to deal with next year’s deficit,” said Lydia L. Ramos, a spokeswoman for the Los Angeles Unified School District, the nation’s second-largest after New York City. “So if there’s a way that you can lessen the blow for next year,” she said, “we feel like it would be responsible to try to do that.”

The district laid off 682 teachers and counselors and about 2,000 support workers this spring and was not sure it would be able to hire any of them back with the stimulus money. The district says it could be forced to cut 4,500 more people next year.

In New York City, Mayor Michael R. Bloomberg committed to no teacher layoffs this year in exchange for not offering raises. A spokeswoman said the city’s budget had already taken the federal aid into account.

In New Jersey, where about 3,000 teachers were let go in May, Gov. Christopher J. Christie’s administration worries that the federal aid will only forestall difficult decisions later, and it is unclear how much will be spent immediately.

In the nation’s fifth-largest district in Clark County in Las Vegas, administrators are eager to hire some teachers, though they wonder what they will do when the federal money runs out.

“We’re a little wary about hiring people if we only have money for a year, but we know that’s the intent of this bill,” said Jeff Weiler, chief financial officer for Clark County schools.

“We can’t stand by and do nothing while pink slips are given to the men and women who educate our children or keep our communities safe,” President Obama said last week. “That doesn’t make sense.”

Piss Poor Economics

The president is mistaken. What doesn't make economic sense is throwing money at unions when unions are the problem. The very best thing we can do for our nation is to get rid of collective bargaining, unions and their bloated salaries and pensions.

Throwing money at problems may be good campaign tactics but it is piss poor economics.

Agony for Naught?

By not rehiring furloughed workers, school districts are making a wise decision. Why go through all this agony of cutting expenses just to do it again next year, fighting the same battle over again?

In the case of New York City, the money was budgeted and spent in advance.

Moreover, summer recess is nearly over, and plans about class sizes, student teacher ratios, number of classes, were already set.

With concerns about next year looming large and the school year about to start, does it make sense to disrupt revised schedules?

Clearly the answer is no. Thus, the best thing to do with that $10 billion this year is nothing. Gratefully, it seems for the most part nothing will be done.

Who is Blame for Lost Jobs?

Not a single teacher, police, or firefighter job had to be lost in this recession.

All the unions had to do to save jobs was renegotiate salaries and benefits. Since they refused, the unions are 100% responsible for every public sector job lost.

So, if furloughed teachers, fire fighters, police officers, and transit workers want to bitch, they should take their grievances to "union hall" and complain the union threw them under the bus because that is exactly what happened.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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