Duncan Says States Playing "Shell Games" with Stimulus Risk Future Funding

WASHINGTON, June 19 — U.S. Department of Education (ED) Secretary Arne Duncan warned states that playing "shell games" with stimulus funds may put them at a competitive disadvantage when the department invites applications for a $4 billion discretionary grant fund to spur innovation and school reform.

The warning came in a June 18 letter to Pennsylvania Governor Ed Rendell after the state senate voted to reduce the state's spending on education and use that money to cover holes elsewhere in the state budget. The state, like several others, is counting on its share of a $48 billion stabilization fund to offset the state cut. ED officials have condemned the practice in the past, but this is believed to be the first time a department official has delivered such an admonition in an official letter.