US warns Wisconsin may lose $1.5 billion in pandemic aid under budget action

MADISON - Federal education officials are warning Wisconsin may lose more than a billion dollars in funding for schools unless the Legislature provides more state support in the two-year budget lawmakers are crafting this summer. 

In a letter Friday, a U.S. Department of Education official told State Superintendent Carolyn Stanford Taylor that action taken Thursday by the Legislature's budget-writing committee puts at risk $1.5 billion in federal pandemic aid for schools. 

The Republican-controlled Joint Finance Committee dedicated $128 million in new funding for K-12 schools and set aside $350 million in a separate fund that GOP lawmakers said would be used for schools but was not yet appropriated as such. 

That means Wisconsin has fallen short in meeting a $387 million K-12 spending threshold in order to receive the pandemic aid under federal rules that require state officials to spend about 35% of state funds on schools.  

"... The $350 million that the State might transfer to the budget stabilization fund may not be considered State support for education at the time of the transfer unless it is actually appropriated for K-12 education for the applicable fiscal year and not 'for any other purpose,'" said the letter from Ian Rosenblum, a top official at the U.S. Department of Education's Office of Elementary and Secondary Education. 

Joint Finance Committee co-chairman Rep. Mark Born, R-Beaver Dam, said the warning amounted to “a political letter” from Democrats and that the committee remains aware of the federal rules for the aid.

Committee co-chairman Sen. Howard Marklein, R-Spring Green, said Thursday that he understands the action at this point creates a risk but suggested upcoming budget decisions could mitigate it. 

"The risk is manageable," he said. 

On Friday, Marklein said his position remains the same. 

“We will continue to consider the potential impact of the (federal rules) for the future, but we will not paralyze our state budget process,” he said in a statement. “We made strategic investments in K-12 and higher education yesterday that will move Wisconsin forward and we will continue to do what is right for the taxpayers of our state.”

Democratic U.S. Rep. Mark Pocan, who released the letter on Friday, said adopting a budget plan for schools that could end up losing more than it adds is "a really risky game of chicken."

"Clearly the federal government is saying what we’re doing is not going to work," said Pocan, a former finance committee chairman. "What I don't want us to do is be so clever that we end up in a place where the funds are no longer there."

Pocan said the federal funds are meant to help schools stay open safely while the pandemic persists and losing the aid could force classrooms to go virtual again. 

Sen. Dale Kooyenga, R-Brookfield, has advocated repeatedly for schools to bring students back into classrooms safely to ensure children are learning as best they can and recovering from academic setbacks during virtual instruction.

Kooyenga, who voted for the budget plan, did not respond to a request for an interview about the potential loss of aid. 

Jill Underly, who will take over as state superintendent in July, said lawmakers "must not rush through an education budget that attempts to replace the state’s obligation to public school funding with federal one-time COVID-relief dollars intended to help children recover from the pandemic."

"The federal dollars were intended to provide access to mental health, more resources for extended learning and after-school programming, and in general academic recovery from this unprecedented crisis," she said. 

Contact Molly Beck at molly.beck@jrn.com. Follow her on Twitter at @MollyBeck.