PHENOM Files Complaint about Stimulus Funds

The waiver will allow the state to forgo rules stipulating how the $813 million in education stimulus funding received by the Commonwealth should be spent in the second and third year of the funding.

Through the waiver, which was granted Monday by the U.S. Department of Education, the state is no longer bound by stimulus strings that dictated the Commonwealth, in fiscal year 2010 (which begins at the end of the month) and 2011 must fund its 29 institutions of higher education at levels at least equal to fiscal year 2006 support.

Some of the education stimulus money will be used to offset the state’s budget deficit.

And PHENOM members said without these clauses, they see large student fee hikes on the horizon.

“They’re pushing the costs onto the students and parents,” said Max Page, an organizing member of PHENOM. “They’re beating up on higher-ed again because they think they can.”

State’s view

Jonathan Palumbo, spokesman for the executive office of education, said the state’s budget crisis is forcing officials to use stimulus money to offset a severe drop in state revenue.

The governor has outlined a $4 billion budget deficit. About $412 million in stimulus funds will be used to offset the most recent $1 billion budget gap: $322 million from the education stimulus pool and $90 million in discretionary stimulus funds controlled by the governor, Palumbo said.

“We are in extremely difficult budget times. We clearly wish that the budget would resolve itself and we’d have additional funds that we could invest at a greater level in early childhood and K-12 and higher education, but the facts are the facts,” Palumbo said.

“Had the federal government had issue with it (the waiver) as PHENOM appears to, there wouldn’t be an option to apply for a waiver and they wouldn’t have approved our application,” Palumbo added.

The state is no longer bound by the stimulus to fund higher education at FY06 levels in the next two years. Still, in its waiver application, Secretary of Education Paul Reville, who filed the petition for the governor, states the governor anticipates the percentage of the total state revenues used to support public education in fiscal year 2011 will be at least equal to the percentage of support in the previous year.

Meanwhile, the state is still hammering out a budget for fiscal year 2010 and public higher education is in line to receive about $160 million from the stimulus – an amount PHENOM members said is adequate.

Ferd Wulkan, organizing director at PHENOM, said he hopes the complaint filed with the Obama administration against the state will reconsider the waiver.

“Our ultimate hope is that the U.S. Department of Education will find that Massachusetts is not using the funds appropriately and the state will have to re-look at this,” Wulkan said. “We recognize the state is in a dire situation – we’re not blind to that, but the law is pretty specific about what these funds are for.”

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