What happens when the stimulus money runs out?

Jo Egelhoff asks the question as it relates to school districts over at Fox Politics (no, it’s not related to Fox News; Jo lives in the Fox River valley in northeast Wisconsin), and she doesn’t like the answers. While she focuses specifically on Wisconsin, there are lessons for the rest of the country.

The stimulus act focuses most of the money on expansion of programs with money that will cease to exist in 2 years. Wisconsin Rapids Public Schools Superindendent Bob Crist said, “It’s great news, but it’s only for one or two years. You can’t put a huge program in place and then not be able to substantiate that in two years, so you have to be somewhat cautious on how you spend the funds.”

Wisconsin State Senator Mike Ellis (R-Neenah) issued a warning that is based on the state’s experience with creating unfunded future mandates: “Don’t use these funds to enhance or create ongoing programs that will need continued funding after the federal funds go away. To the extent that they can, school boards should use these one-time resources to build up rainy-day funds and to pay for other one-time needs. Otherwise, if they follow the state’s lead, we could have 426 local structural deficits all across Wisconsin.”