Published: 1/5/2010 11:54:00 AM
The U.S. Department of Education (USDOE) has now approved the applications for initial federal stimulus funding under the American Recovery and Renewal Act of 2009 (ARRA) for 49 of the 50 states; [1] Pennsylvania, which has been involved in a protracted dispute with federal officials over funding for state-related universities, is the only state whose application is still pending approval. The information the states have submitted raises serious questions about whether the stated purposes of the Act -- stabilizing education funding, facilitating the continuation of equity and adequacy formula adjustments and promoting education reforms to boost student achievement -- are being met.
States received 67% of their education stimulus money upon initial approval; the balance will be made available upon approval of their phase II application.[2] Proposed regulations regarding the Phase II applications were released last week. Those applications require the states to compile and submit extensive data on levels of student performance and state initiatives in a number of education reform areas that have been deemed priorities by USDOE. The deadline for Phase II applications has yet to be released.
The stated purpose of ARRA education funds is to stabilize the education budgets of the states, allow states to continue to fund equity and adequacy initiatives in state funding formulae, and to “boost student achievement.” The last aim is to be achieved by commitments from each state accepting the federal requirement to promote four essential areas of reform: 1) improving teacher effectiveness; 2) making progress toward college and career-ready standards and rigorous assessments; 3) enhancing data systems to track educational practice; and 4) improving achievement in low-performing schools.
Under the Recovery Act, USDOE will be distributing to states, school districts, and higher education institutions in all 50 states approximately $100 billion over the next two years. This amount is more than twice the Department’s current annual appropriation for all of its programs. The largest pot of money is the approximately $48.3 billion earmarked for the State Fiscal Stabilization Fund, which is intended to avoid severe cutbacks in funding for public schools and public postsecondary institutions.[3] The Act will also provide the states an additional $13 billion for educationally disadvantaged children under Title I of the Elementary and Secondary Education Act and an additional $12.2 billion in funding under the Individuals with Disabilities Act over the next two years. States are also eligible to compete for a portion of an additional $5 billion in discretionary grants that the Department will be distributing under a “Race to the Top” Incentive Fund and a separate Innovation Fund. (Proposed Regulations concerning the Race to the Top Funding were also released last week.
In their Phase I applications, states were required to indicate how the state intends to use the funds allocated under the Education Stabilization Fund (ESF) and the Government Services Fund (GSF) of the SFSF Program, and governors were required to provide personal assurances that the state will take actions to improve the state’s performance in the four priority education reform areas listed above.
ESF funds must first be used to restore state levels of support for elementary, secondary, and post-secondary education in FY 2009 and FY 2010, respectively. The statute also specifies that where applicable, the federal funds should be used to allow existing state formulae increases for those years to go into effect, and specifically to allow “funding for phasing in State equity and adequacy adjustments, if such increases were enacted pursuant to State law prior to October 1, 2008.” Remaining funds must then be used to restore state support for elementary, secondary, and post-secondary education in FY 2011. Any funds that remain after restoring state support in FY 2009 – FY 2011 are to be allocated to Local Education Agencies (LEAs) as subgrants based on the LEAs’ proportionate shares of funding under Title I, Part A.
As part of its “Stimulating Equity?” project, the Campaign
for Educational Equity at Teachers College, Columbia University, has compiled
the essential data from all of the approved state Applications for Initial
Funding into a single chart and has undertaken an initial analysis of what this
basic information reveals. The chart
provides a wealth of significant information about how each of the states
intends to use its stimulus funds. The data in the chart must, however, be read
with caution, because it is clear that some of the numbers are based on
projections made several months ago which have been superseded by recent events
(The Center on Budget and
Policy Priorities reports that three weeks into the new fiscal year, five states
had not yet adopted budgets for 2010, and at least 13 of the states that
had adopted budgets were faced with new shortfalls.) In addition, some states
failed to supply information requested in certain categories, some answers were
ambiguous and some were clearly erroneous.
Nevertheless,
despite these cautions, the chart as a whole tells an important story about the
first stage of implementation of ARRA funding. Of the three stated educational
goals of the Act -- stabilizing education funding, allowing continuation of
equity and adequacy reforms, and promoting education reforms to boost student
achievement -- only the first seems to have been substantially achieved.
Virtually all of the states have stabilized their funding levels for FY 2010 at
the previous year’s level, with the application of the federal stimulus funds. (
In many instances, however, this “flat funding” will nevertheless result in
substantial cuts in educational services since mandatory cost increases will
not be covered.)
The extent to
which the momentum of existing equity and adequacy advances has been maintained
is, however, less clear. Although a number of states have used the federal funds to fund existing
statutory funding increases, at least five states have acknowledged that they
will not meet statutory formula funding levels, even with the addition of the
federal stimulus aid, and in several of these cases, equity and adequacy
enhancements called for under existing state statutes clearly are not being
funding. Most of the small amount of funds that will be left after stabilizing
the FY 10 budgets will be used to
stabilize funding for the FY 11 fiscal year, leaving little if any money for
new initiatives in the priority reform areas to boost student achievement.
Our initial
analysis indicates that stabilization may in some cases have been unduly
emphasized at the expense of the equity and reform goals of the ARRA, as some
states apparently increased their anticipated education deficits upon learning
that substantial federal funding for education was in the offing in order to avoid
planned cuts in other areas of the budget. Although some officials might argue
that such maneuvers represented prudent budget planning, these stratagems clearly
raise serious legal issues given the statutory intent of the ARRA and the
constitutional pre-eminence given to education in most state
constitutions. Indeed, Secretary
of Education Arne Duncan indicated his grave concerns regarding such strategies
in a letter
he sent last month to
The “Stimulating
Equity? Project” of the Campaign for Educational Equity intends to analyze
closely each of these issues over the coming months. We will report our interim
findings from time to time on this “Stimulating Equity?” page of the Equity
Campaign website. Our over-all findings, together with reports and analyses
by other groups that are investigating
issues related to the implementation of the ARRA, will be presented at a major
symposium we are planning to convene in February.
In sum, the major trends revealed by the information contained in the states’ initial applications for educational funding under the ARRA are as follows:
I. Stabilization
Of the 50 states[4] whose
Applications for Initial Funding have been approved, 18 plan to use the entirety of their ESF funds to restore state
support for elementary, secondary, and post-secondary education in FY 2009 and
FY 2010. These states are
Of these states:
II. Equity
and Adequacy
Twenty-two states indicated that statutory provisions in
effect prior to October 1, 2008 required formula increases to support elementary
and secondary education, or to phase in state equity and adequacy adjustments.
Sixteen of these indicated that the amount of state funding they intended to
provide in FY10, together with the federal stimulus funding they planned to
apply to that year’s budget, would be sufficient to fully fund the state’s
formula increases for FY10. These states are
The data in the applications does not indicate the extent to which these shortfalls in meeting statutory formula levels undermine specific adequacy and equity goals. It is reasonable to assume, however, that any reduction in spending levels that a legislature had already determined to be necessary to properly fund education would mean that children, and especially children in low income and predominantly minority districts with low local tax bases, would not be receiving all of the resources needed to provide them an adequate and equitable education.[5] We do know from other sources that New Jersey’s budget shortfalls do specifically undercut equity and adequacy adjustments called for by the statutory formulae, and that Georgia’s shortfall was heavily concentrated on an “equalization” program in the state budget that provides extra funding for poor districts. Moreover, some states appear to have provided misleading or erroneous information on their applications. For example, New York reported in its application that it would use virtually all of its stimulus funding in FY 2010 to fully implement the equity and adequacy adjustments called for in the statutory formula, but, in fact, the state used only half of its available federal funding in FY 10, and voided virtually all of the scheduled formula increases.
III. Funding for Reform Initiatives
Thirty-two states will have ESF funds remaining after restoring state support for education in FY 2009 and FY 2010. These states are (in order of increasing surplus as a percentage of the state’s ESF allocation) New York, Maine, Texas, Iowa, Kansas, Massachusetts, Minnesota, Indiana, Wisconsin, Louisiana, Missouri, North Carolina, Colorado, South Dakota, New Mexico, Delaware, Connecticut, Tennessee, Kentucky, Oklahoma, New Hampshire, Vermont, Ohio, Mississippi, Montana, Maryland, Nebraska, the District of Columbia, West Virginia, Wyoming, Arkansas and Alaska. Of these states:
IV. Breakdown
of funds between K-12 and higher education spending
Of the ESF funds that have already been allocated by the states to restore support for education in FY 2009 and FY 2010, 42 states are using more than 50% of those funds to restore support for elementary and secondary education, while 6 states (Arkansas, Colorado, Louisiana, Montana, Tennessee and Wyoming) are using more than 50% of those funds to restore support for post-secondary education. More specifically:
V. Government Services Fund (GSF)[7]
At this
time, four states have committed to
using 100% of their GSF funds over which governors have broad discretion for
education purposes –
There are 23 states that have not currently
apportioned any of their GSF funds for education purposes. However, several of these states have
indicated that the use of some portion of the GSF funds is currently
“Undetermined,” so this may change. The
states that have not currently apportioned any GSF funds for education are
Of the states that have thus far apportioned GSF funds for
education purposes, sixteen intend
to use the majority of those funds for K-12 purposes. These states are
[1] The
application of the
[2] Upon request and a showing of immediate need, states were able to receive up to 90% of their total education stimulus funds even before submitting their Phase II applications.
[3] States must devote $39.5 billion of this amount toward stabilizing educational funding ; these funds are known as the “education stabilization funds ( ESF). The remaining $8.8 billion, known as the “government services fund ( GSF), may be used by the governor for public education or for other governmental services, at his or her discretion.
[4] More
precisely, 49 states plus the
[5] Moreover, it should be noted that the fact that 28 states did not have statutory formula increases in effect on October 1, 2008 does not mean that reasonable equity and adequacy levels are being achieved in those states. These states generally re-consider budgetary levels on an annual basis. Normally, funding increases necessary to cover mandatory cost increases, to assure adequate funding, and to provide greater funding equity are reviewed as part of this process. The fact that most states have been able to achieve flat funding at the previous year’s level, therefore, does not mean that reasonable adequacy and equity needs are being met; on the contrary, flat funding more likely means that in many cases programs will need to be cut since the increased costs for maintaining them are not being met.
[6] While the Application for Initial Funding requires states to indicate the amount of ESF funding that will be used to restore support in FY 2009 and FY 2010, the application notes that the USDOE will collect data on the funds to be used in FY 2011 and as subgrants to LEAs at a later date. Therefore, most states did not provide data on the use of funds remaining after restoring support for FY 2010 at this time.
[7]
In the Application for Initial Funding, states are
required to indicate what percentage of the GSF funds will be used for various
purposes, including education. States
also have the option of indicating that the use of these funds is
“Undetermined” at this time.
