I’m not a fan of saying, “How high?,” when the federal government says, “jump,” and waves around a bunch of money. It’s also detrimental to begin seeing federal dollars as some sort of cost-free windfall.
That said, the Race to the Top matter has brought forward the true face of labor unions and highlighted their strategies and motivation:

Recently, union officials have told Gist they want her to intervene in union-management strife in Central Falls and East Providence. While those two disputes continue, they said, they can’t support the aggressive reforms Gist says are needed to fix failing schools. Gist and other state officials have said repeatedly that they cannot intervene. In Central Falls, the union local is fighting plans by Supt. Frances Gallo to terminate the entire teaching staff of the low-performing high school and hire back only 50 percent. In East Providence, the union is outraged the local school committee unilaterally cut teacher salaries and forced teachers to pay more into their health insurance. Both cases are currently in the state’s courts.

“You want that $75 million? Well, make these two little problems go away. Make it clear who runs the show around here.” (Not an actual quotation, by the way.)
Rhode Island’s educational system is failing children and costing residents far too much — to the point that, in combination with other factors, it’s strangling the state’s economy. The law will decide what local remedies are allowed. To unions, though, that’s not good enough. Any chance to extort for the result they want is legitimate, in their eyes.
And that, in case you needed further example, is why it’s so dangerous to look toward consolidation and the movement of governing authority to higher tiers of government.