Education Stimulus

Rewarding excellent teachers and swiftly removing bad ones is a relatively new concept in public education. Current labor union contracts and teacher salary schedules typically prevent differentiated compensation based on anything beyond years of experience and academic credentials. And the concept of "tenure" or "permanent status" for teachers makes quick removal nearly impossible. But a recent report by The New Teacher Project (TNTP), The Widget Effect, hopes to change that by encouraging states and school districts to dramatically improve teacher evaluations and link them to teacher pay, increased responsibilities, and dismissal.

The Widget Effect refers to how teachers are currently treated like identical inputs into education, rather than individuals with particular strengths, weaknesses, and skills. The authors claim this is due to the broken teacher evaluation system currently in place in most school districts. Teacher evaluations are infrequent and lack rigor. Principals often do not receive evaluation procedure training and rarely provide guidance and feedback to struggling teachers.

The Department of Education recently approved the State Fiscal Stabilization Fund (SFSF) applications of five more states - Idaho, Massachusetts, North Carolina, Virginia, and Washington. These states join the 16 that have already begun to receive funds. As of May 22nd, nearly $773 million in SFSF monies have been disbursed to states. (Previous posts analyzing the applications of the first 16 states can be found here and here.)

These five additional states make up another $4.0 billion in Education Stabilization funds and $886 million in Government Services funds. According to the Center for Budget and Policy Priorities, Massachusetts is expected to face the largest budget deficit as a percent of total state spending in fiscal year 2009 - 14.2 percent - while Virginia will experience the smallest - 6.7 percent.

The Department of Education recently approved the State Fiscal Stabilization Fund applications of three more states - Indiana, Rhode Island, and Tennessee. These states join the 13 that have already begun to receive funds. As of May 15^th, nearly $565 million in SFSF monies have been disbursed to states. (A previous post analyzing the applications of the first 13 states can be found here.)

Indiana, Rhode Island, and Tennessee comprise an additional $1.7 billion in Education Stabilization funds and $386 million in Government Services funds. Of the three states, Rhode Island is expected to face the largest budget deficit as a percent of state spending - 11.4 percent - while Indiana is expected to face the smallest - 8.0 percent.

News reports suggest that some schools and school districts have started receiving at least the beginning of the $44 billion in stimulus funding made available on April 1^st. This money flows through three programs in particular - No Child Left Behind Title I Part A, Individuals with Disabilities Education Act (IDEA) Part B, and the State Fiscal Stabilization Fund (SFSF). While all 50 states and the District of Columbia have received at least 50 percent of their Title I and IDEA allocations, only the 13 states whose SFSF applications have been approved have received any of that available money. Below we discuss how some school districts have decided to use the funds.

As we've discussed previously, guidance states that the stimulus funds are to be used for two primary, and potentially conflicting, purposes. The first, saving and creating jobs, is an inherent goal of the stimulus bill particularly for states experiencing severe budget deficits. The second, supporting reforms to improve student academic achievement, will likely be sidelined in many districts as they work to keep their schools open and teachers in their classrooms. However, some districts have attempted to do both.

UPDATE: Updates on State Fiscal Stabilization Applications can be viewed here.

The State Fiscal Stabilization Fund (SFSF) is the largest source of education funds from the American Recovery and Reinvestment Act (ARRA). This fund is intended to help states fill the gaps in both their K-12 and higher education budgets caused by the recent economic climate. Although most states are in the process of submitting or waiting for approval of their State Fiscal Stabilization Fund applications, 13 states have already started to receive funds. Below we discuss the applications that these states submitted for how they intend to use the SFSF funds they have been allocated.

In the application, each state is required to present how much of the Education Stabilization funds (81.8 percent of the total SFSF allocation) it will use in fiscal years 2009 and 2010 for K-12 and higher education separately and how much money will remain for use in 2011. Additionally, states are required to describe how they will spend their Government Services funds (18.2 percent of the SFSF allocation).

The Department of Education (ED) recently released a document titled "Using ARRA Funds to Drive School Reform and Improvement" as an addendum to previous stimulus guidance.  The document provides recommendations on how to use the new State Fiscal Stabilization, Title I, and IDEA stimulus funds to encourage reform and student achievement while preventing funding cliffs. Although some of the recommendations present valuable ways for states and school districts to spend the stimulus money, many of them are either overly simplistic or overly complex and distract from the stimulus' goal of saving or creating jobs.

The recommendations are separated into five parts - the first four mirror the four reform goals identified in the stimulus legislation (improving standards and assessments, establishing data systems, increasing teacher effectiveness and distribution, and improving low performing schools) while the final section pertains to improving results for all students.  The recommendations range from simple activities districts should already be doing to pie-in-the-sky education reform efforts that few administrators have been able to master, and everything in between.

The Department of Education (ED) released a second round of guidance documents for the major programs funded in the American Recovery and Reinvestment Act (ARRA) on April 10th. Each document specifies how funds for each program will be distributed, how funds will be disbursed, and how states and local education agencies (LEAs) will be able to use them.  Previously, we discussed the guidance for the State Fiscal Stabilization Fund, Title I Part A, and IDEA Part B.

Today we will take you through the guidance document for Impact Aid funds provided in the stimulus. ARRA provided $39.6 million for Impact Aid formula grants and $59.4 million in competitive discretionary grants, $100 million total.

Since the passage of the stimulus bill in mid February, states and school districts have been curious about the details for the new Qualified School Construction Bond program. To date, the Department of Education hasn't provided many details on the program, perhaps because it is a tax program, not a spending program. Turns out, the Internal Revenue Service (IRS) released guidance and allocations for the program to states and LEAs in mid April.  We review these allocations in the post below[1].

The Qualified School Construction Bond program provides $11 billion face value in tax-free bonds in both fiscal years 2009 and 2010 to help fund school construction, rehabilitation, repair, and land acquisition. It is estimated that the federally-funded bonds will save schools nearly $10 billion in taxes over the next 10 years. Effectively, the federal government is providing interest-free loans to schools and districts to finance school construction efforts. While the schools and districts must repay the loan face value, they do not have to pay interest on it. Stimulus legislation stipulates that 40 percent of the bond face value be distributed to the 100 local education agencies (LEAs) with the most students living in poverty and the remaining 60 percent to other LEAs based on the distribution of Title I Part A Basic Education Grants.

The Department of Education (ED) recently released stimulus guidance intended to clear up some of the questions states and LEAs have regarding fund distribution, allocation, and accounting.  Unfortunately, some uncertainty remains around several issues including how funds will be distributed to charter schools that are also local education agencies (LEAs).  Depending on state law, some charter schools function as their own LEAs for federal funding purposes while others are part of an existing LEA.  Although the guidance clearly states that charter LEAs are entitled to their fair share of State Fiscal Stabilization and Title I funds, the Department has left it up to state agencies to adjust their allocations to account for those LEAs.

In distributing the Stabilization Funds to states, ED provided each state with a share of the total $48.6 billion based on their total population aged 5-24 as well as their share of overall population. In the case of K-12 monies, states are expected to distribute their funds directly to LEAs (both traditional and charter) using the state's primary education funding formula.

The Department of Education (ED) released long awaited guidance documents for the major programs funded in the American Recovery and Reinvestment Act on April 1st. Each document specifies how funds for each program will be distributed, how each governor must disperse the funds, and how states and local education agencies (LEAs) will be able to use them.  Because each document is quite long, we will summarize the guidance in three separate posts.  Last week we discussed the guidance for the State Fiscal Stabilization Fund and Title I Part A.

Today, we take you through the details of the guidance for the IDEA, Part B funds provided in the stimulus.  The stimulus legislation provides $11.3 billion for IDEA, Part B.

Like the Title I Part A guidance, the IDEA Part B guidance is short on information for how states and LEAs can actually spend the new IDEA stimulus funds.  However, it provides extensive information on distribution of funds; the supplement, not supplant provision; and the maintenance of effort provision.