Home AdvocacyPolicyWashington Notes2003 Jan-Feb

• Appropriations Update
• Budget Update
• E-Rate Update

Appropriations Update

Congress Finally Passes FY03 Appropriations
Last week, after months of negotiations and debate, Congress completed action on the FY03 Omnibus Appropriations bill, which incorporates 11 Appropriations bills, including the Labor, Health and Human Services, and Education Appropriations. The Senate passed the bill by a 76–20 vote, and the House passed the bill 338–83. The President voiced strong support the bill and is expected to sign it into law in the next few weeks.

Since the beginning of the 108th Congress, the Senate and House Appropriations Committees and the Administration have been working to resolve differences in order to reach a final compromise on FY03 Appropriations. The House Appropriations bill would have level funded the education technology block grant program ($700.5 million), but would have eliminated funding for the Preparing Tomorrow's Teachers to Use Technology (PT3), the Star Schools and the Community Technology Centers (CTC) programs. The House bill also provided no funding for the Regional Technology Centers (RTECs). Conversely, the Senate bill provided level funds for the education technology block grant and provided funding for the smaller education technology programs. The programs funded include $62.5 million for PT3, $32.5 million for CTC, and $27.5 million for Star Schools. Additionally, the Senate bill level-funded the RTECs at $10 million.

The Conference Committee’s compromise version moves closer to the Senate’s view on overall education funding, supporting large increases on major education programs, and tracks the Senate version’s interest in preserving PT3, CTC, Star Schools and the RTECs. The compromise version approved by the House and Senate provides $53.1 billion for education, an increase of $3.1 billion over FY02. Although most education programs will be subject to an across-the-board cut of 0.65%, which was needed to offset funding increases for Title I and IDEA, the overall outlook for education technology in the bill is positive. Without taking the across-the-board cuts into account, the major education technology programs received at least the same amount of funding as they did in FY02: the education technology block grant received $700.5 million, PT3 received $62.5 million, CTC received $32.5 million, Star Schools received $27.52 million, and the RTECs received their full $10 million allotment. Given the state of the economy and the Administration’s continued efforts to eliminate these small education technology programs, level funding for them in FY03, minus a small across-the-board cut, represents a significant victory for education technology.

Here is a list of FY03 program funding levels (totals with the across-the-board cut):
Title I—$11.75 billion, $1.4 billion increase ($11,673,625,000)
Title II-Teacher Quality—$2.95 billion, $100 million increase ($2,930,825,000)
Education Technology—$700.5 million, level-funded ($695,946,750)
21st Community Learning Centers—$1 billion, level-funded ($993,500,000)
Preparing Tomorrow’s Teachers to Use Technology—$62.5 million, level-funded ($62,093,750)
Community Technology Centers—$32.5 million, level-funded ($32,288,750)
Star Schools—$27.52 million, increase of $20,000 ($27,341,120)
Ready to Learn—$23 million, $1 million increase ($22,850,500)
Ready to Teach—$14.5 million, $2.5 million increase ($14,405,750)
RTECs—$10 million, level-funded ($9,935,000)

Budget Update

Administration Releases FY04 Budget Request
Earlier this month, the Administration released its FY04 budget proposal which, though it would increase education funding by $2.8 billion, again proposes the elimination of all national education technology grant programs. As in its FY02 proposal, the Administration’s FY04 proposal seeks to eliminate the Preparing Tomorrow’s Teachers to Use Technology (PT3), the Community Technology Centers (CTC) and the Star Schools programs and to level fund the state education technology block grant at $700.5 million. Overall, the President's FY04 budget raises education funding levels by 4%, but does so by increasing funding for only those few programs that the President considers priorities: Title I, reading and school choice programs, including vouchers.

The Administration’s FY04 budget also signaled the Administration’s desire to use program evaluations in determining funding allocations for future budgets. For example, the 21st Century Community Learning Centers program sustained a 40% cut (from $1 billion to $600 million) in the Fy04 proposal after an evaluation of the program indicated that the “centers funded in the program’s first three years are not providing substantial academic content and do not appear to have a positive impact on student behavior.” Many observers of the appropriations process speculate that the Administration’s use of evaluations to determine whether a program should be funded will likely become more prevalent for the programs within NCLB.

Even though the President’s budget will have an impact on the FY04 appropriations process, it may not prove to be central to forthcoming FY04 budget discussions. Historically, Congress has used the President’s budget as a guiding document for the creation of the budget and appropriations bills. However, because the budget request was released before Congress completed negotiations on and passed the FY03 Omnibus Appropriations bill, there is a growing consensus that the FY03 Omnibus Appropriations bill will be used to guide the FY04 appropriations process as opposed to the President’s budget request. One major reason for this belief is that the President’s proposal recommends funding levels that would be far lower than FY03 Appropriations, making reliance on his FY04 proposal politically unpalatable for many members of Congress. For example, the Administration’s FY04 request for the Title II Teacher Quality block grant is some $80 million lower than Congress approved for FY03.

Here is a list of the Administration’s proposed FY04 funding levels (increases and decreases are based on FY03 funding levels:
Title I, Education for the Disadvantaged—$12.35 billion, increase of $676,375,000
Title II, Teacher Quality—$2.85 billion, decrease of $80,825,000
Title II Part D, Education Technology Block Grant—$700.5 million, increase of $4,553,250
Title II Ready to Learn—$22 million, decrease of $850,500
Title IV, Part B, 21st Century Community Learning Centers—$600 million, decrease of $393,500,000
Higher Education Act, Preparing Tomorrow's Teachers to Use Technology—Eliminated (-$62,093,750)
Title V, Part D, Community Technology Centers—Eliminated (-$32,288,750)
Title V, Part D, Star Schools—Eliminated (-$27,341,120)
Regional Educational Laboratories—Eliminated ($-67,061,250)
Regional Technology in Education Consortia—Eliminated (-$9,935,000)

E-Rate Update

After a flurry of articles and activity in December and early January related to E-rate waste, fraud and abuse issues, the past several weeks have been relatively quiet. The only action on this front has been the quiet launch of an investigation by the House Commerce Committee’s Subcommittee on Oversight and Investigations, chaired by Rep. James Greenwood (R-PA), into program integrity issues. To date, neither Rep. Greenwood nor House Commerce Committee Chairman Billy Tauzin (R-LA) has called for hearings on these issues. Additionally, there have been no articles published recently about specific allegations of E-rate waste, fraud, or abuse and no further declarations from the FCC Inspector General’s office of widespread malfeasance in the program. Senate Commerce Committee Chairman John McCain (R-AZ) has also not elected to make any statements or announce any hearings on this issue.

Although press and Capitol Hill activity has been light, E-rate action at the Schools and Libraries Division is proceeding apace. On February 6, the Year 6 application window closed and the expectation is that this will be another heavy application year for the program. Additionally, SLD continues to process Year 5 applications. It has thus far committed $1.753 billion in E-rate discounts and mailed twenty-two waves of funding commitment letters. SLD has not announced when it will complete work on Year 5 applications. However, the beginning of the Year 6 application processing period coupled with the House investigation is likely to slow the Year 5 process even further.