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Russo!

What Obama's stimulus plan will do for your district. And what it won't.

By Alexander Russo | March/April 2009

interested in what you're reading here? Then read more at This Week In Education!

 


A few months ago, it was unclear if schools were going to be a part of the federal effort to reinvigorate the economy. Yet education ended up being a major part of the final version of the bill that was passed in February. Roughly $100 billion for schools is on its way. But how much will arrive, when, and for what programs remain to be seen.

There’s little doubt that schools need help against budget cuts. States are projected to cut $80 billion (18 percent) in education spending over the next three years, or roughly 574,000 publicly funded jobs, according to a recent report. That’s before the stimulus, but doesn’t count local funding, which is almost guaranteed to decline.

In the face of these cuts, the stimulus (officially known as H.R. 1, the American Reinvestment and Recovery Act) is a much-desired windfall for schools. The largest federal funding bill in history is a “once in a lifetime boost” for federal education funding levels, according to Jim Kohlmoos of the Knowledge Alliance, a Washington-based education group.

In one fell swoop, the two-year legislation nearly doubles the U.S. Department of Education’s existing $59 billion budget, with items like $25 billion for school modernization bonds, $13 billion for Title I, $12 billion for idea, and nearly $16 billion for Pell grants. There’s also $250 million for statewide data systems and $640 million for education technology. These are major increases that could create a new base funding level for federal education support.

In the short term, however, the challenge will be for the Department of Education to allocate the funding quickly and for districts to put it to good use. There is tremendous potential for confusion, disagreement, and delay. And the funding will come with increased scrutiny, due to the perception that the bailout for the banking industry has included misspent funds. Here are some of the future challenges:

-No one knows exactly how the $3 billion school improvement fund will be distributed. This pot of funds gives Secretary Duncan an unprecedented tool when it comes to rewarding states for achievement gains or efforts. But who will get the funding—or even what is required to be eligible—isn’t entirely clear.

-At an even larger scale, there are uncertainties surrounding the new $54 billion “State Fiscal Stabilization” Fund that was created to help states avoid cutting back education and other services.

-The law requires states to maintain 2006 funding levels, allocate 80 percent of funds to K–16 programs, and promise to undertake a variety of activities such as improving teacher effectiveness and assisting struggling schools.

-Some states like Florida that have cut education spending are already seeking a waiver in order to remain eligible. Other states anticipate disagreements between state ed chiefs and governors over how funding should be spent. The final version of the bill includes no direct funding for new school construction.

It’s also possible that states will try and divert the funding. Governors sought—and won—a degree of flexibility when it comes to the education sections of the new law, and could decide that public safety or health programs are more important than education in the short term. “There are enough trapdoors in the language right now ... that it would be easy for them to flush the money around,” said former House education staffer Charlie Barone in a recent Education Week article.

To add to the delay, states still have to prove that they are eligible for increased funding for programs like Title I and IDEA, which also require that they don’t swap out state dollars when federal dollars become available.

No doubt, the influx of federal funds will help offset tough budget cuts for schools and school districts. But it will take quick, smart work on the part of the Feds, the states, and districts before it gets into schools.

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