Last week, I wrote about how the recent $10 billion in stimulus aid from the federal government, which was earmarked for states to spend in schools, hasn't necessarily led to rehiring teachers who'd been laid off thanks to budget cuts.
Some states are going even further, and are looking for ways to spend that federal cash outside the school system altogether. From the Huffington Post:
Crippled by budget deficits, states officials have been eying money in the $26 billion federal jobs bill that's intended for schools. State leaders in California and Oregon have expressed interest in taking their fraction of the federal money from the $10 billion Education Jobs Fund and stashing it away for rainy day funds or using it to retire state debt. In Texas, Rep. Lloyd Doggett added a state-specific amendment to the federal legislation to prohibit precisely this behavior.
States techically can't use the money to reduce debt. But there are ways to skirt that restriction.
In California, legislators, including state Sen. Darrell Steinberg, have proposed using the $1.2 billion in federal money designated for the schools to help offset the state's $19 billion deficit. Steinberg has since backed off those statements under public pressure.
In Oregon, Governor Ted Kulongoski told superintendents to be "judicious and prudent" with the $118 million expected from the federal-aid bill, as the state's deficit has grown an estimated $200 million to $500 million this year, according to The Oregonian. A superintendent quoted in the The Mail Tribune said the budget shortfall "effectively erases the federal funds."
Zach Patton -- Executive Editor. Zach has written about a range of topics, including social policy issues and urban planning and design. Originally from Tennessee, he joined GOVERNING as a staff writer in 2004. He received the 2011 Jesse H. Neal Award for Outstanding Journalism
E-mail: zpatton@governing.com 
From regulations to spending, the federal government can be a huge thorn in the sides of state and local governments. Written by Ryan Holeywell, GOVERNING FedWatch monitors all the money spent and all the mandates required by the federal government that effect states and localities.
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