‘More questions than definitive answers’ on rejecting federal education funding, TN Senate report says

NASHVILLE, Tenn. (WKRN) — One chamber of the Tennessee General Assembly has released its report on the possibility of rejecting federal education funding.

The Tennessee Senate’s joint working group on the issue released its report, stating there were “more questions than definitive answers” on the feasibility of rejecting billions of dollars in federal education funding.

The idea of rejecting federal funds was first floated by House Speaker Cameron Sexton (R-Crossville) in November 2023.

According to the report, Tennessee took in about $1.29 billion in federal funding for 2023. It is about 10% of the Tennessee Department of Education’s overall budget, according to lawmakers.

MORE: Tennessee could reject $2B in federal education funding

An issue with the federal funding, according to Sexton in November, was the idea that federal funds came with too many strings. The report concluded that there are already prohibitions on federal overreach within the large programs that provide funding for education.

“A key understanding that emerges from these provisions is that the federal government is expressly prohibited from determining what is taught in schools,” the report reads.

Therefore, the report concludes, the state has options already at its disposal to prevent what state lawmakers may deem as “overreach.”

Among the options for consideration for the state, according to the report, is the ability to request waivers for specific requirements, which Tennessee has successfully done before. The report notes Tennessee was approved for a waiver of a component of the No Child Left Behind Act in 2012. At that time, the waiver had to do with reading/language arts and math proficiency requirements.

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Another option for the state would be to seek changes through a reauthorization of federal law, which would likely require the collaboration of the state’s U.S. senators. The report notes the Elementary and Secondary Education Act (ESEA) was reauthorized through the Every Student Succeeds Act in 2015 with the assistance of then-Sen. Lamar Alexander.

Finally, the legislature could enact its own involvement in the grant application process for any federal grant programs.

“The legislature, in collaboration with the Tennessee Department of Education, can implement safeguards to protect the state from unwanted federal overreach,” the report notes.

Additionally, the legislature could opt for implementing a process for “legislative authorization of grants,” something the state of Oregon reportedly does, the report states.

Click HERE to read the full report from the Tennessee Senate on rejecting federal education funding

On the financial side, the report notes that Tennessee could potentially replace federal education funding with recurring state revenues, but it would do so “at the expense of other potential investments.”

According to an analysis of the FY2024 budget, the state has $2.6 billion in recurring state tax revenues that were put toward non-recurring expenses. Even after adjusting for spending changes stemming from the special session of the General Assembly in August, the state will end up with about $2.2 billion in recurring funds.

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“The estimated $2.2 billion is about enough to cover the approximately $1 billion cost of annual routine cost increases and also replace the estimated $1.1 to $1.3 billion in recurring federal funds the state typically receives for K-12 education,” the report reads. “While the state revenues are available, the decision to reject and replace recurring federal funding for K-12 education would come at the expense of other potential investments.”

Ultimately, the Senate joint working group concluded there was not enough known about the consequences, because no state has truly rejected federal funding of education in the country.

“There are more questions than definitive answers about what rejecting federal K-12 dollars could mean for Tennessee’s obligations because no state has ever done so,” the report reads. “Many federal requirements could still apply to Tennessee schools even if the state rejected federal K-12 dollars, creating questions that would likely be resolved in court.”

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Additionally, the report noted, it was “also important to consider that many of the requirements attached to federal dollars align with state policymakers’ goals and/or are integrated into the state’s own requirements.”

“Therefore, many federal grants provide the state with monetary support for policies that the state would likely implement on its own,” the report stated.

Finally, if the state did reject the funding, the money wouldn’t be reduced from the overall education funding budget from Congress, the report noted.

“If Tennessee rejected some or all of the money it receives from these programs, those funds would not result in federal taxpayer savings unless Congress reduced its funding amounts by the same amount. While possible, it seems more likely that those fund would instead be redistributed to other states,” the report concluded.

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