Stimulus Deal Reached; More than $140 million for

 

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U.S. congressional negotiators announced a deal on February 12 for a federal stimulus package of approximately $787 billion that includes between $75 - $85 billion for pre-K – 12 education funding.  The amount of education funding is a compromise between the House and the Senate, the former having authorized up to $140 billion and the upper chamber having approved $80 billion for education (including higher education).  The funding will flow through to a variety of programs, including early education, Title I districts, special education, state “flex” money, and emergency relief for school budgets.  The stimulus package is additional funding on top of an annual appropriations bill the U.S. Congress has yet to pass.

 

According to preliminary estimates, Vermont’s education system will receive at least $140 million in federal stimulus, although millions more may be available depending on how certain discretionary funds are allocated. Reporter Sam Dillon of The New York Times described U.S. Secretary of Education Arne Duncan’s new authority.  Tt=

 

“Most of Mr. Duncan’s unusual power would come in disbursing a $54 billion stabilization fund intended to prevent public sector layoffs, mostly in schools.  The bill sets aside $5 billion of that to reward states, districts and schools for setting high standards and narrowing achievement gaps between poor and affluent students.  The law lets Mr. Duncan decide which states deserve awards and which programs merit special attention.”

 

“This represents a once-in-a-life-time opportunity to do something dramatically better,” Secretary Duncan told reporters in a conference call on the 13th.  Duncan said that a key goal of the bill is “pushing a significant reform agenda,” and he highlighted money for programs in the measure embraced by the reform community, including the Teacher Incentive Fund, which would get $200 million.

 

81 percent of the $54 billion stabilization fund is earmarked directly for education and will be administered by the U.S. Department of Education; the remainder is a flexible block grant under each state’s control (in Vermont, $17.2 million). The stabilization fund money will be available for the current fiscal year (FY2009) as well as FY2010 and FY2011.  As a condition of receiving stimulus money, states must continue to provide education aid to local school districts at a minimum of current lawful levels, known as a “Maintenance of Effort” clause. As of press time, it is unclear how the MOE will work in Vermont; we will report on the details a future newsletter.

 

Districts can spend their stabilization grants on school renovation, repair, or modernization.  School construction funding was among the most contentious provisions, having been stripped from the Senate bill, although renovation money was restored in this limited, flexible form in the final version.  Title I schools will have an additional $3 billion funding stream for school improvement.  No stimulus funds will be available for new school construction.

 

According to the Congressional Research Service, at a minimum, Vermont will receive the following in federal education stimulus funds.

•   $77.2 million in state fiscal-stabilization funds earmarked for K-12 and higher education;

•   $33.8 million for Title I schools;

•   $25.6 million for K-12 special education;

•   $900,000 for pre-K special education;

•   $2.1 million for ages 0 – 3 special education;

•   $3.2 million for educational technology state grants.

 

According to Education Week and the NSBA, the total pre-K-12 education portions of the stimulus bill break down as follows.

•   $53.6 billion for a state fiscal-stabilization fund, including:

 $39.5 billion that local school districts and higher education institutions could use to avert layoffs and programmatic cutbacks;

 $5 billion for the Secretary of Education to disperse as bonuses to states for meeting performance measures;

 $8.8 billion in flexible funding for states to use for “critical services”;

 Leftover money in the stabilization fund would be distributed to Title I schools.

•   $13 billion for Title I schools including $10 billion for programs and $3 billion for school improvement for schools failing AYP;

•   $12.2 billion for special education;

•   $5 billion for early education, including $1 billion each for Head Start and Early Head Start;

•   $680 million for rehabilitation services and disability research;

•   $650 million for education technology;

•   $300 million for states to address teacher shortages and provide financial incentives for teachers who raise student achievement;

•   $250 million in competitive grants for states to develop data systems that analyze individual student data;

•   $100 million for impact aid construction;

•   $70 million for the education of homeless children.

 

The roughly $100 billion package for K-12 and higher education represents a significant increase from the U.S. Department of Education’s current annual discretionary budget of approximately $60 billion.  Discretionary spending is that spending which is not mandated by entitlements such as Medicaid.  This is a huge some of money available to a Department that as of press time had not filled dozens of top posts including deputy secretary, under secretary, and chief of staff.  The stimulus has the potential to greatly enhance the federal government’s role in shaping education policy, as states vie for competitive education grants according to federally defined guidelines. In doling out incentive funds, Secretary Duncan has indicated he would favor districts and schools that improve student achievement, tie teacher pay to classroom performance, and offer innovative educator training programs. 

 

When the final votes were tallied, there was minimal Republican support for the stimulus package.  The U.S. House ratified the agreement on a vote of 246 to 183; no Republican members voted in favor of the bill and nine Democrats also opposed the legislation in its final form.  The Senate passed the bill 60 – 38, with three Republicans supporting the package. President Obama signed it into law on February 17th.

 

Reporting from the Center on Budget and Policy Priorities, the Congressional Research Service, Education Week, the National School Boards Association, and The New York Times were sources for this article.