Stimulus Plan — still seeking answers; updated Title I allocations

Thursday, February 26th, 2009 at 6:26 am by

School and state officials share many of the same questions about federal stimulus plan funding, generally boiling down to “how much, when, and what are the strings?”

State Stabilization Funds
For education, the single most clearly helpful element of the plan is the state stabilization fund, which will provide New York almost $2.5 billion in federal aid over two years expressly to avert cuts to education and higher education over the next two years.

The federal law authorizes governors to allocate their state’s shares of stabilization funds, but it seems likely that dividing up New York’s share will be done as part of the overall state budget due to be enacted by April 1, and not before.

Elementary/secondary education is expected to receive over well over 90 percent of New York’s education stabilization funds.

Updated District-by-district allocations
The U.S. Education Department has now posted district-by-district estimates of the increases in Title I funds to be provided by the federal stimulus plan.  These are two-year totals.

There has been conflicting information however, how much of the money will not be available until the second year, but it seems likely that at least one-half will be available in the first year.

The USDE estimates differ some from figures previously released by the U.S. House of Representatives Education and Labor Committee.  The Department numbers are still labeled “preliminary,” but coming from the administering agency, I would regard them as more on target.

The U.S. Department has not yet issued district-by-district IDEA estimates.

Title I, IDEA (special education), and some other education funding increases will be allocated directly by federal formula, leaving states no discretion.  This should result in sooner notification of district-by-district allocations but it is not clear when we might receive final, official estimates of all those allocations.

1st payments — 30 to 45 days
State officials are awaiting official guidance from the U.S. Education Department.  Education Week reports that U.S. Education Secretary Arne Duncan held a conference call with state education chiefs yesterday and advises that the first stimulus payments should actually be available within 30 to 45 days.

The paper also speculates that the first payments are likely to be “formula dollars” such as from the Title I increase, since the allocation formula is already in place.

Federal guidance — next week
Secretary Duncan also advised the state chiefs that written guidance will be issued next week.  It may not directly answer “how much” questions for school districts but should help both state and school officials understand limitations on how funds might be used and what will be required of successful applications.

There are conflicting interpretations of the extent of “supplement, not supplant” restrictions on the use of Title I and IDEA funds, for example.

Accountability demands
We have been hearing a lot about the volume of information that states and schools will be required to compile and report on their uses of stimulus funds.  For example, we can anticipate some requirement to identify the number of jobs created or saved.  Consistent with the President’s emphasis on “transparency,” much of the information may wind up on the recovery.gov website.

Vice President Biden joined the end of Secretary Duncan’s conference call with state education chiefs.  Both stressed that a lot will be expected from education.  The Secretary said, “We’re going to have a much higher bar than other folks [receiving stimulus money].  We need to create jobs, and we need to get dramatically better.”

Obviously there is some tension between, on one hand, providing increased federal support to offset state cuts and preserve jobs, and, on the other, expecting it to leverage dramatically better outcomes.

As we have explained previously, the state is to receive other significant general budget assistance from the stimulus plan.

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