Senator Schumer releases unofficial district allocations from federal Education Jobs Fund — UPDATED

Tuesday, August 10th, 2010 at 9:15 pm by

U.S. Senator Chuck Schumer has released estimates of allocations from the federal Education Jobs Fund for New York State school districts.

The U.S. House of Representatives approved legislation creating the fund today; it was passed by the Senate last week.

New York State’s share of the $10 billion authorized nationwide is $607 million.

The Senator’s estimates are unofficial; the state must adopt an allocation scheme.  There are reports that the State Assembly and Senate could be called back next week to take actions necessary for the state to expend the federal aid.

You can see the Senator’s estimates here.  Again they are unofficial.

The Senator presumes that the state would use the methodology which the State Legislature used to allocate its proposed state budget restoration to School Aid — reducing each district’s Gap Elimination Adjustment (GEA) as proposed by Governor Paterson by an equal percentage.  Senator Schumer’s estimates assume each district’s GEA would be reduced by 43.055 percent

Senator Schumer’s news release says that the estimates were prepared with the assistance of New York State United Teachers.

Governor Paterson vetoed the Legislature’s School Aid restoration and other additions to his proposed budget when Legislators initially failed to approve a contingency plan for addressing a feared shortfall in federal Medicaid funding for the state.

Last week the Legislature did approve a contingency plan which provides for equal percentage across-the board reductions in most areas of state spending, including School Aid, in the event federal Medicaid is less than assumed in the state budget.

The same federal legislation creating the Education Jobs Fund also authorized continuation of some additional Medicaid help for states.  This action reduced but did not eliminate New York’s projected Medicaid funding shortfall, leaving a gap of about $280 million.

Given School Aid’s share of state spending subject to the contingency plan reductions, schools could face current year reductions in state aid totaling in excess of $100 million, partly offsetting the benefit of the federal school jobs money.

The federal statute provides that districts may use the jobs money

“…only for compensation and benefits and other expenses, such as support services, necessary to retain existing employees, to recall or rehire former employees, and to hire new employees, in order to provide early childhood, elementary, or secondary educational and related services.”

Also, schools are prohibited from using the aid for, “…general administrative expenses or for other support services expenditures as those terms were defined by the National Center for Education Statistics…”

Schools may not put their allocations in reserve to save jobs in next year’s budget, nor may the state put any of the aid into a “rainy day” fund.

UPDATE:  The U.S. Education Department is now saying that while districts would be expected and encouraged to use Education Jobs Fund money in 2010-11, federal law would permit districts to use it in 2011-12.

States are prohibited from putting any of the aid into a “rainy day fund,” or using it to pay down existing state debt.

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