Putting Race to the Top $ into Perspective

Monday, August 30th, 2010 at 8:50 am by

I’ve been fielding questions about when districts might receive funding from the state’s Race to the Top grant and how much.

The short answer is I don’t know and it will likely take some time to resolve.

A longer answer might begin, “We all have other things to focus on while the financial details of the Race to the Top grant get worked out.”

As we tried to indicate to school district leaders considering whether to sign memoranda of understanding in support of the state’s application in January and again in June, the primary reason for doing so should be that the grant would provide financial support for valuable state-level initiatives not available from any other foreseeable source, not for its impact on district finances.

Here are some observations:

  • The $696 million grant which the state won is to be received over a four year period.
  • The state must still negotiate some details of the grant with the U.S. Education Department over the next 90 days.
  • By law, states must allocate one-half their grant amount to local education agencies (LEAs — school districts and charter schools) according to shares under the federal Title I, Part A program.
  • The $348 million required to be allocated to LEAs looks like a big number, but in the world of statewide school district finances it is not so big – the cut in state-funded School Aid this year was more than three times as large.
  • Because of the requirement to allocate these funds according to Title I shares, New York City could receive about 70 percent of the half that must be distributed to LEAs.  A preliminary, “ballpark” estimate of a grant for an individual district might be derived by multiplying its Title I, part A grant by 30 percent. Actual grants might be somewhat higher, because not every district signed a memorandum of understanding agreeing to implement provisions of the state Race to the Top plan.  Here is a link to a table of estimated Title I allocations for 2010-11.
  • Whatever a district’s grant figure, it is the total amount the district will be eligible to receive over the four year period.  Districts would NOT receive that grant amount each year for four years.
  • Here is an excerpt from SED’s Q&A issued with its June MOU request to districts:
  • “Grant funds will be distributed to participating LEAs using the standard grant process employed by NYSED for all federal grants (i.e., the FS-10/25/10F process). This process enables LEAs to draw down funds as needed to pay program costs while minimizing the time that elapses between the draw and disbursement by the subgrantee. Participating LEAs will be accountable for meeting annual performance goals and timelines. USED will award RTTT Phase 2 funds to states in September 2010. States will then have a four-year project period from the time of the award in which to implement their plans and spend their grant money. A similar timeframe will apply for participating LEAs.”
  • The funds will only be allowed to be used to support initiatives in the state’s Race to the Top plan, not general ongoing operating costs.
  • New York’s application promised that the state would use $129 million from its half of the grant to make additional grants to LEAs for specific initiatives. These funds will be allocated primarily through competitive processes and so no district funding estimates are possible at this time. Districts not receiving Title I, part A funds could receive funding through these initiatives.
  • While the $348 million required to be allocated to districts is modest when measured against annual swings in School Aid, the $219 million to be used for direct state purposes is comparatively huge.  The Education Department now receives only $42 million in state tax dollars to support its operating budget (staff salaries, travel, equipment, supplies, and contractual services).  The part of the grant to be retained for direct state purposes exceeds the entire budget from all funding sources for SED’s office handling preschool through high school.

As we suggested in our statement on the state’s winning application, the Race to the Top grant provides an “otherwise unobtainable boost” to efforts to update and improve the infrastructure of the state’s education system – standards, assessments, curriculum, training for teachers and school leaders, data systems to track student progress, and programs to turn-around chronically struggling schools.

Details on the planned expenditures from the state’s grant are available here, starting on the page numbered “348 of 449″ or page 353 of the “PDF.”

This entry was posted on Monday, August 30th, 2010 at 8:50 am and is filed under Finance, National Policy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.