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The federal government has been pushing states to overhaul the way teachers are evaluated, saying it's critical to improving instruction. But disputes with teachers unions are delaying the rollout of new evaluations.

As NPR's Larry Abramson reports, those disputes now threaten federal grants that are meant to encourage education reform.

LARRY ABRAMSON, BYLINE: New York State has a lot of failing schools. Those schools got more than $100 million in federal School Improvement Grants. In exchange, districts promised to phase in new evaluation systems.

But John King, state commissioner of education, says they haven't followed through. So he may have to take the money back.

JOHN KING: Their grants would be suspended. There ought to be a process in place to rigorously evaluate teachers and principals. They understood that at the time they applied for the grants.

ABRAMSON: The issue shows just how tough it is to come up with something everyone agrees is needed - a better way to assess teachers' performance. The unions say they back this in principle. But Carl Korn, with New York State United Teachers, says these plans would link a teacher's future to how students do on a standardized test.

CARL KORN: I don't think anybody out there would want their career determined by how 25 8-year-olds did on one two-hour test over the course of a year. That's just not fair.

ABRAMSON: The unions say the commissioner could simply ask the federal government for more time so districts can negotiate, but Commissioner John King says students can't wait.

KING: And it would be inconsistent with the vision of the School Improvement Grants program but also inconsistent with the best interests of students in the schools.

ABRAMSON: Today, the chancellor of the New York City schools sent a letter to the state, saying he doubts the city will be able to resolve the issue. He blamed the union for insisting on an elaborate appeals process for teachers who get an unsatisfactory rating. Low-performing schools in New York City alone stand to lose $50 million. A similar deadlock in Hawaii threatens a $75 million grant from another federal program called Race to the Top. To get that grant, Hawaii committed to a number of changes, including new teacher evaluations. Those reforms are stalled, so Justin Hamilton of the federal Department of Education says the state could lose that money.

JUSTIN HAMILTON: A state will not get money for reneging on promises.

ABRAMSON: Education Secretary Arne Duncan has placed the state's Race to the Top money in the high-risk category. Negotiations with the union went on for months and have been suspended. Stephen Schatz of Hawaii's Education Department says notice from Washington has served as a wakeup call, and he wants to resume formal talks.

STEPHEN SCHATZ: We realize that in order to right the ship, we're going to need to sit down together as partners and figure this thing out.

ABRAMSON: Other states have run into similar roadblocks. Tennessee Governor Bill Haslam has ordered a review of that state's new evaluation system, after teachers complained it is intrusive and takes time away from instruction. These disputes come as states are particularly hungry for funds, due to tight budgets. Carl Korn of New York State United Teachers says his state is using that fact as a pressure tactic.

KORN: This Education Department is choosing brinksmanship and politics to threaten to disrupt services to New York's neediest students.

ABRAMSON: More grief may lie ahead, as the process labeled education reform by its proponents continues to require painful sacrifices.

Larry Abramson, NPR News.

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