Education Stimulus

On Tuesday, Secretary of Education Arne Duncan and Assistant Deputy Secretary for Innovation and Improvement Jim Shelton released proposed priorities and selection criteria for the Investing in Innovation Fund (i3), a $650 million pot of funds intended to support the development and expansion of innovative models to improve student achievement and narrow achievement gaps. 

For those of us interested in creating a high-quality continuum of education programs from the earliest years up through third grade, there is a lot to like in the proposed priority list. But first, some background and broader details from today’s announcement:

i3 was created this spring under the American Recovery and Reinvestment Act (ARRA). Because the program provides a unique opportunity for the Department to invest in the development and scaling up of innovative practices, and because the ARRA legislation left a lot of details to be filled in about how the program will work, many in the education community have been eagerly awaiting further information about how the Secretary intends to implement it.

A recently released study by the Government Accountability Office (GAO) suggests that states have been spending increasingly more money - over $640 million in 2007-08 - on creating and implementing academic assessment tests associated with the No Child Left Behind Act (NCLB). While some federal funds have gone to support these efforts, states have provided most of the funds in the past. The findings from this report have particularly important implications now that Education Secretary Duncan has allocated $350 million of the $4.35 billion for Race to the Top grants for improving standards and assessments and 46 states have joined the effort to develop a common core of standards.

The GAO study found that while states spent anywhere from $500,000 to $83 million on state assessments in 2007-08, the majority of these funds went to outside vendors that developed, administered, scored, and reported the results of the tests. A much smaller fraction of the costs cover salaries for state employees that participate in assessment production. Additionally, it appears that test development, as opposed to scoring or administration, was the most costly part of the process. Due to the fixed nature of costs for test development, smaller states found it particularly difficult to cover these expenses.

In early September the Department of Education (ED) released additional guidance that provides details on how states and school districts can use Individuals with Disabilities Education Act (IDEA) stimulus funds for reform activities. This guidance seeks to ease some of the inherent tension in the American Recovery and Reinvestment Act (ARRA) goals of saving jobs and promoting education reform - a tension that likely has slowed the speed with which states and districts have been able to spend funds. However, one piece of the outlined reform efforts can bridge the gap between these two seemingly opposite goals. Specifically, the guidance provides methods for using ARRA IDEA funds to improve teacher effectiveness and distribution that also have important implications for the teacher workforce.

The guidance lays out four potential ways states and school districts might use ARRA IDEA funds to improve teacher effectiveness and distribution: dual certification, induction and mentoring, using technology in instruction, and assistive technology. Each of these methods seeks to dramatically improve the way teachers instruct special education students by providing them with powerful tools or knowledge.

Last week we examined the rate at which stimulus funds for different programs have been disbursed by states for spending. Despite encouragement from the Department of Education to spend funds quickly, the majority of education stimulus funds have not yet left the bank. However, this is not the case in all states. While some states are moving quickly to disburse their stimulus funds, others have not, emphasizing the lack of connection between the funds allocated to states and their financial need. Today we will explore the disbursement of stimulus funds at the state level with a close look at activity in two particular states.

As of September 4^th, the Department of Education had obligated (made available for spending) $66.5 billion in stimulus funds to the states. However, states had only disbursed $16.6 billion of those funds for spending at the local level. On average, that's just over 25 percent. While some states have disbursed significantly more than 25 percent of their obligated funds, many states have disbursed far less. The story becomes even more interesting when a state's budget deficit is included in the consideration. While logic would suggest that states with particularly high projected budget deficits would have incentive to spend their stimulus funds more quickly, that is not always the case.

Since the release of the Race to the Top grant priorities in late July, states across the country have been scrambling to ensure their eligibility for their share of the $4.35 billion in federal funds to encourage innovation in education reform. Several states, including California, Nevada, Wisconsin, New York, Alaska, Missouri, and Texas, were immediately identified as ineligible for the program due to student data "fire walls" or unwillingness to participate in the common standards process. But California's Governor, Arnold Schwarzenegger, is unwilling to let as much as $500 million slip through his fingers. On August 20^th he called a special session of the legislature to consider a bill that would immediately enact sweeping changes to the state's education system and remove any barriers to the Race to the Top funds. Below, we discuss details of the proposed California bill.

The bill includes six major changes to existing California education law:

It has been nearly seven months since President Obama signed the American Recovery and Reinvestment Act (ARRA) with the hopes of stimulating the economy and encouraging education reform across the states. While some pundits have already declared the bill a failure, others claim that the stimulus funds are hard at work. At the heart of this discussion are both whether the stimulus funds are available to be spent and whether they have actually been obligated and disbursed to states for spending. Below we discuss the major programs funded through the stimulus and the status of their funds as of August 28^th, 2009.

The ARRA provided nearly $97 billion to the Department of Education (ED) through a variety of existing federal k-12 and higher education programs, as well as a new State Fiscal Stabalization Fund. About $55 billion of this funding is currently obligated to states. Despite encouragement from ED for speedy spending, less than one-third of those funds have been disbursed to states. This leaves nearly $40 billion sitting in ED coffers waiting to be spent.

In late July the Department of Education (ED) released the draft priorities for the Race to the Top grant funds for public comment. The document outlined 19 criteria on which states' applications will be judged, including the existence of charter school caps, laws preventing the use of student achievement data to determine teacher compensation, and approved alternative pathways to teacher certification. As of August 28^th, ED received over 1,100 comments, with many stakeholder groups voicing concern that the criteria were overly prescribed and stringent, requiring states to improve public education through specific channels like performance pay and charter schools. According to these groups and individuals, this is in direct contradiction with the administration's previous promise to focus on goals for educational improvement rather than the methods by which those goals are achieved. But the unique structure and competition involved in the Race to the Top grants justifies the priority document's specificity.

Much speculation about state eligibility for Race to the Top funds has been circulating in the education arena since the draft guidelines and priorities for the funds were released in late July (final guidelines will be released in the fall with funds going out in early 2010). Race to the Top, a new competitive grant program authorized by the American Recovery and Reinvestment Act (ARRA), provides $4.35 billion to states to support advances in standards and assessments, state data systems, teacher distribution, and assistance to struggling schools (the four assurances required in the ARRA). The New Teacher Project, a non-profit that focuses on narrowing the achievement gap by improving teacher quality and is not involved in the distribution of Race to the Top funds, recently released a state scorecard (link updated) which analyzes each state's eligibility for funds based on the draft guidelines. This document provides some important insight into the state of education reform across the country.

The New Teacher Project (TNTP) scorecard judges states' eligibility for the Race to the Top funds based on five criteria:

School districts around the country are engaging in some tricky budget tactics to make ends meet during these tough economic times. Current teacher salary schedules, which provide salary increases in "steps" based on experience and credentials, provide obstacles to simply lowering teacher compensation to prevent layoffs. While some districts have been able to use stimulus funds to rehire previously laid-off teachers, many have not been so lucky.

A recently released study by Marguerite Roza from the Center on Reinventing Public Education outlines several options districts can use to balance their budgets. While these provide alternatives to significant layoffs, they often require approval by local teachers unions - a difficult task. Nevertheless, news sources suggest that districts are successfully engaging in many of these options.

Over the past couple of weeks, the Department of Education has approved the State Fiscal Stabilization Fund (SFSF) applications of 14 more states. These states join the 36 states/territories that have already begun to receive funds. As of July 17th, nearly $8.7 billion in SFSF monies have been disbursed to states. (Previous posts analyzing the applications of the first 36 states/territories can be found here, here, here, here, here, and here.)

The full table of all approved states/territories can be accessed here.