Who Signs Your Paycheck?
Federal influence on State Education Agencies
Are state education officials focused on their own state’s needs or are they preoccupied with federal mandates? A review of who is paying state education agency (SEA) salaries suggests that many employees within these bureaucracies have competing priorities—and may have to spend more time meeting federal requirements than serving the students in their states.
While the federal government pays for only a small fraction of public K–12 education expenses around the country, new data reveal that federal funding pays for a significant portion of SEA salaries. In fact, on average, the federal government funds nearly half—41 percent—of the salary expenditures at state education departments in the 34 states for which comprehensive data are available (see Figure 1).
Figure 1. Share of state education agency salaries paid with federal and state funds
Source: State departments of education provided salary data for 2014 unless otherwise noted. Arizona data are from 2012. Vermont data are from FY 2015.
I gathered these data by asking SEAs for salary information on their employees. Thirty-four agencies responded with information that allowed me to calculate how much of an employee’s or position’s salary had been paid with federal or state taxpayer funds in fiscal year 2014. Public-school student enrollment in these states accounts for 71 percent of student enrollment in the U.S.
Though some SEAs did not provide the share of total salary expenditures funded with federal money, they still offered other pertinent information. The Michigan Department of Education, for example, indicated that 67 percent of their full-time equivalent positions (FTEs) were funded all or in part with federal funds. Such responses suggest that the states I was unable to include in my analysis are probably similar to the states I have studied here.
Federally-funded positions at SEAs take various forms, but positions that include the title “consultant” and “program specialist” are common. For example, in California, federal funds pay for all or part of five “agricultural educational consultants” and 14 nutritional consultants. Mississippi has 13 accountant/auditors and 10 positions dealing with “education and school food services” paid with federal funds. Wisconsin has 83 positions listed as “education consultants” partially or fully funded with federal money. Arizona has 25 positions called “Education Program Specialist” partially or fully funded with federal money. Generally, the staff in these positions administer federal programs that distribute federal funding to school districts and ensure that districts comply with federal rules. For all intents and purposes, they are federal employees.
Federal policy created SEAs
The substantial federal footprint within SEAs is hardly new. Washington has funded SEAs for more than 50 years, a process that began well before President Carter elevated the federal Office of Education to a cabinet-level agency.
The first iteration of the Elementary and Secondary Education Act (ESEA), enacted in 1965, directed substantial funds to state agencies to handle the distribution of federal education funds to local districts.  In particular, Title V (“Grants to Strengthen State Departments of Education”) outlined Washington’s commitment to “assist [state education] agencies in the establishment and improvement of programs to identify and meet the educational needs of states.”
As Congress and successive administrations reauthorized federal education statutes, Washington levied new requirements on states. SEAs had little choice but to align their organizational charts to federal programs. In Arizona, for example, the agency’s organizational chart has specific offices devoted to Title I, Title II, and 21st Century Community Learning Centers—all components of ESEA.  The original Title V aimed at strengthening SEAs has been eliminated, but most major federal funding streams now permit states to set aside a share of the funds that would otherwise go out to school districts for administrative costs.
Research from the American Enterprise Institute and Center for American Progress from 2014 notes the growing responsibilities of SEAs in recent decades, saying that today, “Heightened attention to issues such as turning around low-performing schools, fixing state data systems, and improving teacher evaluations all require state education officials to play a new and far more demanding role, often under the scrutiny of the media spotlight.”  States did not volunteer for these assignments, however; the federal government created them.
Diane Bishop, Arizona’s state superintendent from 1987 to 1995, has observed the evolution of the agency from an office that had more authority to oversee state-level programs to one focused on federal compliance. “We were always looking for something that would give districts the opportunity to try new things or something that we thought would be of use or helpful in raising the bar,” she says of her time in office.
Yet, in recent years, Bishop, who now works for an Arizona-based charter school network, says complying with federal rules counts as success at the department. Officials “focus…on following federal mandates. You’ve got to do a plan and get it in on time,” Bishop says, referring to the requirement that every state submit a plan to Washington explaining how the state will comply with the Every Student Succeeds Act (ESSA), the latest iteration of ESEA.
Former Nevada Superintendent of Public Instruction James Guthrie also struggled to use the agency to raise the bar for the state. “It’s been a long time since we have had a state education department that can do something significant,” he says.
Federal funding levels vs. federal requirements
Taxpayers pay for only about 10 percent of all K–12 education spending nationwide, but lawmakers have argued for years that federal requirements are disproportionate to the federal contribution.  In a 2011 hearing before the U.S. House Committee on Education and the Workforce, then-Representative John Kline said “the federal government imposed 41 percent of the administrative burden [on states] yet paid just 7 percent of the total cost.”  Later that year, the U.S. Department of Education asked state and local education officials for ideas of how to “reduce the burden” of complying with federal requirements—an admission that the agency had levied too many. 
This sentiment still drives the discussion over the changes to federal law under ESSA. Over the last two years, Washington officials have claimed that the new federal education law is less burdensome and have extolled its “flexibility.”  At his confirmation hearing in 2016, U.S. Department of Education Secretary John King said the “locus of decision making…is rightly shifting back to states and districts,” an idea that policymakers of all stripes have reiterated since. 
What does this mean for ESSA?
ESSA remains young, and the U.S. Department of Education has only recently approved most state plans.  As of April 2018, 13 are still under consideration. Officials are still deciding how much states will reserve for administration in the coming years. Ignoring the debate over whether—and how much—these set-asides result in less money being provided to districts, the fact remains that federal funds come with federal responsibilities. With Title I’s “School Improvement Grants,” for example, SEAs must oversee the turnaround efforts of the lowest-performing 5 percent of Title I schools in the state (schools due for “comprehensive support and improvement,” or CSI).
Districts create CSI interventions, but the SEA is tasked with monitoring implementation and is involved with assessing the school’s needs, approving and monitoring the interventions, and deciding how long a CSI must be classified as such.  These interventions are not scheduled to go into effect until later this year and into next year, so, again, we must wait to see if the federal allowance for administration is commensurate with the state agency’s responsibilities.
Trimming the size of SEAs may appeal to fiscal hawks, but if federal requirements are not cut, too, then lawmakers may be setting a SEA up for failure and frustration.
“A 10 percent, across-the-board cut may make you feel great,” says former Virginia and Florida state chief Gerard Robinson, “but who’s responsible when there’s a problem with a federal grant?”
Still, these responsibilities are one indication that circumstances remain similar to those that generated Representative Kline’s comments above and the U.S. Department of Education’s request for comment on how to reduce federal regulation in 2011. SEAs use federal money from education appropriations in order to satisfy federal requirements. As the AEI/CAP analysis put it: “While vital to SEAs, federal funding arrives at the agencies with restrictions. It is exclusively tied to specific programs and employees, and the chief has little control over how the funds are allocated. For instance, offices within the agency are often siloed, with little to no interaction between federal- and state-salaried employees.” 
Under ESSA, reducing the number of federally-funded employees—and the number of federal requirements these employees are tasked with implementing—remains a challenge.
On average, federal money pays for 41 percent of the salary expenditures at state education departments in states that contain more than 70 percent of the nation’s K–12 students. In some states, like Florida, federal funds pay for more than half of salary expenditures at the SEA.
Federal policymakers say the latest version of ESSA gives state officials the ability to make more of their own decisions, but the federal government still maintains a significant presence in SEAs. In fact, a Center on Education Policy at George Washington University survey of state department of education officials found that respondents in 23 states said their agency “had a heavier workload under ESSA than under NCLB,” which challenges the notion that ESSA has fewer federal regulations than previous iterations of the federal K–12 law.  State education officials may have modestly more flexibility in some areas, but the federal government continues to set the agenda.
The ability to comply with Washington’s mandates should not be an indicator of a state department of education’s success. Former Arizona Superintendent Bishop says, “If [submitting a report to Washington is] the most outstanding thing that [a superintendent] can say, ‘Look what I’ve done,’ I find that discouraging,” Bishop says.
— Jonathan Butcher
Jonathan Butcher serves as Senior Policy Analyst for the Heritage Foundation.
Appendix Table: State Salaries and Federal Funding for Salaried Positions
|State||Total Salary Expenditures (2014)||Federal Funding for Salaries (2014)||Percent of Salary Expenses Funded by the Federal Government (2014)|
Source: State departments of education provided salary data for 2014 unless otherwise noted. Arizona data are from 2012. Vermont data are from FY 2015. Author calculations.
1. See Government Publishing Office, Elementary and Secondary Education Act of 1965, available at https://www.gpo.gov/fdsys/pkg/STATUTE-79/pdf/STATUTE-79-Pg27.pdf (accessed April 5, 2018).
2. Arizona Department of Education, Organizational Chart, available at https:/cms.azed.gov/home/GetDocumentFile?id=596f6e433217e1055804e521 (accessed April 5, 2018).
3. Cynthia G. Brown, et al, “State Education Agencies as Agents of Change,” American Enterprise Institute and the Center for American Progress, July 2011, available at http://www.aei.org/wp-content/uploads/2011/07/StateEducationAgenciesasAgentsofChange.pdf (accessed April 5, 2018).
4. Total spending on K-12 public schools nationwide is approximately $600 billion. See Institute of Education Sciences, Digest of Education Statistics, “Table 236.10: Summary of expenditures for public elementary and secondary education and other related programs, by purpose: Selected years, 1919-20 through 2013-14,” available at https://nces.ed.gov/programs/digest/d16/tables/dt16_236.10.asp (accessed April 5, 2018). The 2018 White House Budget Request included approximately $60 billion for K-12 education. See U.S. Department of Education Fact Sheet, President Trump’s FY 2018 Budget, available at https://www2.ed.gov/about/overview/budget/budget18/budget-factsheet.pdf (accessed April 5, 2018).
5. U.S. House of Representatives Committee on Education and the Workforce Statement, March 1, 2011, available at https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=226697 (accessed April 5, 2018).
6. U.S. Department of Education Press Release, “U.S. Department of Education Solicits Ideas to Improve Federal Recordkeeping and Reporting Requirements,” October 11, 2011, available at https://www.ed.gov/news/press-releases/us-department-education-solicits-ideas-improve-federal-recordkeeping-and-reporti (accessed April 5, 2018).
7. See Jonathan Butcher, “Testing Washington’s Promise of Flexibility Under the Every Student Succeeds Act,” Heritage Foundation Issue Brief, October 13, 2017, available at http://www.heritage.org/education/report/testing-washingtons-promises-flexibility-under-the-every-student-succeeds-act (accessed April 5, 2018).
8. Written Statement of Dr. John King Before the Senate Health, Education, Labor, and Pensions Committee on the Nomination of Dr. John King to serve as Secretary of Education, February 25, 2016, available at https://www.help.senate.gov/imo/media/doc/King8.pdf (accessed April 5, 2018).
9. U.S. Department of Education, “Secretary DeVos Approves Six ESSA State Plans,” Press Release, January 19, 2018, available at https://www.ed.gov/news/press-releases/secretary-devos-approves-six-essa-state-plans (accessed April 5, 2018). At the time of this press release, the agency had approved 35 state plans. See also Alyson Klein, “ESSA Progress Report: How the New Law is Moving From Policy to Practice,” Education Week, April 3, 2018, https://www.edweek.org/ew/articles/2018/04/04/essa-progress-report-how-the-new-law.html (accessed April 5, 2018).
10. Carlas McCauley, “Maximizing ESSA’s 7-Percent Set-Aside for School Improvement,” School Turnaround Learning Community/WestEd, July 21, 2016, available at http://www.schoolturnaroundsupport.org/blog/maximizing-essa%E2%80%99s-7-percent-set-aside (accessed January 17, 2018).
12. Daniel Stark Rentner, et al, “States Reflect on Year One Implementation of ESSA,” George Washington University Center on Education Policy, December 2017, p. 1, https://www.cep-dc.org/displayDocument.cfm?DocumentID=1487 (accessed December 12, 2017).