Reading, writing, rollbacks as stimulus ends

07/05/2011 01:17 pm ET | Updated Sep 04, 2011

RACINE, WI -- The public school system in this city hugging the shore of Lake Michigan is running low on money and options for educating its 21,000 students as federal stimulus cash dries up.

Anticipating this summer's end to the $10 million boost it received from the stimulus, Racine Unified held a referendum in April asking to replace some of the lost cash with local property tax dollars. Voters said no.

Facing its own budget troubles, Wisconsin is slashing more than $16 million in state funding for the district, and a state-imposed voucher system could drain even more money if parents pull students out of the district.

With the recession decimating the coffers of states, cities and schools and pushing up the unemployment rate, the government in 2009 began pouring $830 billion into the economy in the hope of creating or saving jobs like those of teachers.

Now that the flood of federal money has ended, cities and school districts like Racine must come up with new ways to cover expenses for the most basic services, including policing, healthcare, schooling and other day-to-day operations.

Racine Unified adhered to a main stimulus tenet of preserving jobs and also made one-time investments with the funds, according to David Hazen, the district's chief financial officer.

But now it must lay off about 60 employees, mostly teaching assistants, as part of its plan to close a projected $25 million budget deficit that depended mainly on salary freezes and higher employee contributions to healthcare and pensions.

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