Education Stimulus

The U.S. Chamber of Commerce, with Center for American Progress and Rick Hess of the American Enterprise Institute, on Monday released the report "Leaders and Laggards: A State-by-State Report Card on Educational Innovation." The report evaluates states based on several indicators of innovation including school management, finance, and technology and identifies significant shortcomings in nearly all categories. In fact, most states received Cs and Ds with a few exceptions that earned As and Bs in one or two categories. In all, it paints an underwhelming picture of the status of education innovation in the United States public education system.

The National Journal on Wednesday released a brief video about the report and challenges states face in using federal stimulus funds for innovative purposes. The video examines states' use of the State Fiscal Stabilization Fund (SFSF), which was mostly used to save jobs, and draws lessons from that experience to illuminate expectations for the upcoming Race to the Top (RttT) competitive grant program. In the video, Ed Money Watch's Jennifer Cohen commented on what we can expect from states and districts for RttT.

Yesterday the Department of Education released the finalized applications for Phase 2 of the State Fiscal Stabilization Fund (SFSF). The SFSF, a major component of the American Recovery and Reinvestment Act (ARRA), provides $48.6 billion in federal funds to states so that they can fill gaps in their education budgets. States that successfully complete the Phase 2 application process will receive the remaining 33 percent of their SFSF monies (unless the state was eligible to receive more than 67 percent during Phase 1). Much like the Phase 1 applications, the Phase 2 applications require state governors to sign off on a series of promises surrounding four areas of reform outlined in the ARRA. The Phase 2 promises center on the collection and public availability of data and information on each state's progress towards the reform areas.

When Congress passed the American Recovery and Reinvestment Act (ARRA), they included extensive data reporting requirements so that the public could closely track expenditures. Now that the recipient reported data on expenditures is publically available, tracking education funds should be easy. But as we discussed earlier this week, data reported by school districts and institutions of higher education is lacking in comprehensive information and is difficult to decipher. Unfortunately, state-level recipient reported data does not match previously available Department of Education (ED) reported data for many states, further undermining the value of the data. If the point of the data collection process was to provide accessible data on the progress of the stimulus, this data falls short of that goal.

ARRA recipients reported the total amount of federal stimulus funds they had received as of September 30^th, 2009 for all stimulus programs (except Pell Grants). This data can be compared to data ED reported on the amount of funds disbursed for the same programs. To do this comparison, we aggregated the recipient reported data on total ARRA funds received by state and compared it to ED's reports on funds it disbursed after subtracting any disbursements related to Pell Grants. We found a fair number of discrepancies between the recipient and agency reported data.

Last Friday, the first round of recipient reported Recovery Act grant and loan data was made available on the Recovery.gov website. Much like the previously released federal contract data, this wave of data lacks the comprehensive information needed to truly determine how the funds are being spent and from what source. The data are both difficult to decipher and include several instances of human error.

While working with the data we discovered several issues that make the data difficult to understand.  For example, less than half of all education-related data are tagged with the funding agency name "Department of Education." Other possible funding agencies include "Federal Student Aid," "Impact Aid Programs," "Office of Elementary and Secondary Education," "Office of Higher Education Programs," "Office of Special Education and Rehabilitative Services," "Office of Postsecondary Education," and "Office of Vocational and Adult Education."

State education agencies across the country just completed the first round of reporting for the American Recovery and Reinvestment Act (ARRA) programs, an onerous and massive undertaking. Unfortunately, the quarterly reporting process is not likely to get any easier for states from here - on December 1^st, 2009 the Department of Education (ED) will require districts to report local and state expenditures at school-level for the 2008-09 school year, the first time such data has ever been required for any program. Rather than tracking federal funds like the majority of ARRA reporting, the school-level data will show baseline state and local funding at schools in districts that receive federal Title I Part A funds. As a result, this data could help determine whether districts and schools are using federal funds to supplement, rather than supplant, state and local funding.

Draft Department of Education guidance for the new school-level reporting indicates that any districts receiving Title I Part A funds will have to report school by school expenditures for the 2008-09 school year on:

Late last week the federal government released the first round of data on economic stimulus spending through the new website Recovery.gov. This preliminary data, which is reported by stimulus funds recipients, included data only for federal contracts as opposed to grant and loan programs. Very few education contracts have been awarded thus far because the majority of education stimulus funds go directly through local education agencies and institutions of higher education. However, the data does include information on 16 contracts made through Department of Education programs. Unfortunately, this data is not detailed enough to provide comprehensive information on how the funds are being spent and from what source, suggesting that future waves of stimulus recipient reported data may not be as useful as we had hoped.

These 16 contracts amount to more than $27.7 million in stimulus funding distributed by 11 states including Alaska, Kansas, Massachusetts, Minnesota, Nebraska, Oregon, Pennsylvania, Tennessee, Virginia, Washington, and Wisconsin. Thus far, the contracting organizations have received $1.9 million (6.9 percent) of the total funds. According to the data reported, these funds have either saved or created 162 jobs. (A table containing this information is available here.)

The White House Domestic Policy Council (DPC) with the U.S. Department of Education (ED) this week released the report "Educational Impact of the American Recovery and Reinvestment Act." The report paints a rosy picture of the effect of American Recovery and Reinvestment Act (ARRA) funds on state education spending and reform.

ARRA funds have no doubt helped states make ends meet during the economic downturn. But our work (here and here) suggests that, despite a positive impact on education spending, the full effects of ARRA remain to be seen due to the slow rate at which states have disbursed funds to school districts.

Since the No Child Left Behind Act (NCLB) first came on the scene in 2001, research-based evidence has become a major focus for federal, state, and local policymakers. Despite this, many Bush and Obama Administration policies were not strongly backed by such evidence.  This haphazard attention to research evidence isn't unusual in the policymaking world according to a recent report by the Northwest Regional Education Laboratory (NWREL). In fact, the research-policy gap may be one of the most important factors keeping American academic achievement stagnant and one the Obama Administration will eventually have to come to terms with.

Complaints about this disconnect between research-based evidence and policy most recently came up in the wake of the Race to the Top and Investing in Innovation application guidance released by the U.S. Department of Education. Both documents outlined very clear priorities for reform efforts that were not always backed by concrete, indisputable evidence. Some, such as using student achievement data to evaluate and determine teacher compensation, are based on imperfect and uncertain science. Others, such as relying on charter management organizations to turn around failing schools, lack specificity and allow for significant variation in quality and outcomes.

In late September the Department of Education's (ED) Office of Inspector General released a report warning ED officials that many states may be using certain provisions of the State Fiscal Stabilization Fund (SFSF) in a manner that could prevent the realization of many of the education reform ideals Congress outlined in the SFSF. Specifically, the report warns that states could use the maintenance of effort provision (MOE) in the SFSF to significantly lower state education spending as a percentage of total spending. While education reform is an important outcome under the American Recovery and Reinvestment Act (ARRA), the legislation was primarily intended to address economic, not reform, needs. ED and the Obama Administration will eventually have to decide which is more important - keeping states from bankruptcy or supporting education reform.

The SFSF is a $48.6 billion dollar fund created by the ARRA to help states fill education budget gaps in fiscal years 2009, 2010, and 2011.  The MOE allows states to lower their state spending to fiscal year 2006 levels and use the SFSF dollars to fill in their budgets up to the higher of fiscal 2008 or 2009 levels. Additionally a MOE waiver allows states to spend less than fiscal year 2006 levels as long as education spending makes up the same percentage of total state spending as in the preceding fiscal year.

On Tuesday, The Department of Education (ED) released proposed priorities and selection criteria for the Investing in Innovation Fund (i3), a new $650 million pot of funds created by the American Recovery and Reinvestment Act (ARRA) to support the development and expansion of innovative models to improve student achievement and narrow achievement gaps.

Today's announcement confirms that i3 grants would be made in multiple "tiers" based on the presence of evidence of effectiveness for a particular innovation: