A financially ailing Ohio school district has joined the ranks of banks and automakers clamoring for a portion of the $700 billion economic bailout package.
Olmsted Falls Superintendent Todd Hoadley said Tuesday that if automakers and big U.S. cities can ask for federal bailout money, schools should be able to follow suit.
"I feel a moral obligation to our taxpayers to make this attempt," said Hoadley, who requested $100 million from the Treasury Department last week. "This is a legitimate request. I’ll be frankly disappointed if something positive doesn’t come out of this."
Hoadley said rising enrollment and strained finances have forced the suburban Cleveland district to take measures such as converting maintenance closets into classrooms.
The district submitted the request to Treasury Secretary Henry Paulson and the Federal Reserve Bank of Cleveland. Paulson has said the Troubled Asset Relief Program, known as TARP, was meant to stabilize financial institutions, and the regional reserve bank told Hoadley the same thing last week.
But Hoadley isn’t giving up — he’s seeking help from Congressman Dennis Kucinich and U.S. Sen. Sherrod Brown, both Ohio Democrats, in obtaining bailout dollars.
Several school associations were trying to determine whether other districts have sought TARP funding. Miami-Dade Schools chief Alberto Carvalho told The Miami Herald last week that Congress should consider bailing out the nation’s schools, but the district didn’t apply for funding.
Olmsted Falls’ total enrollment has swelled by 29 percent over the last decade to 3,800 students. The district would spend half of the $100 million in TARP money on building and renovation projects, while the other half would go toward operating expenses.
Two local ballot issues seeking additional school funding failed last month, and the district projects a deficit of $2.6 million at the end of the 2009-10 school year.
"We’re not looking at this from a bailout standpoint. We don’t want to be lumped in with failing corporations," said Hoadley. He noted that Olmsted Falls has long been one of the state’s top-rated school districts.
Hoadley is encouraging others to make similar requests to the Treasury Department.
"Somebody has to be looking long-term," Hoadley said. "The only way we’re going to dig ourselves out of this economic hole is investing in education."
So far, the Treasury Department has committed about $270 billion in TARP money for banks and another $40 billion for the insurance company American International Group. U.S. automakers are seeking $25 billion in federal loans, and last month the mayors of Philadelphia, Atlanta and Phoenix asked for a share of the bailout funds.
The Treasury Department and the Federal Reserve Bank of Cleveland did not respond to requests for comment.