Education Stimulus

Secretary Duncan Announces Race to the Top Finalists

July 27, 2010

Today, U.S. Secretary of Education Arne Duncan announced the finalists for Round Two of the Race to the Top competition – 18 states and the District of Columbia. Race to the Top is a $4.35 billion program created by the American Recovery and Reinvestment Act that provides competitive grants to states to implement education reform programs. The 19 finalists will have a chance to present their Race to the Top proposals to a panel of judges. Final scores will be assessed after the presentations and the top states will receive grants. There is $3.4 billion available for this round of awards after Delaware and Tennessee received a combined $600 million in Round One. Secretary Duncan said that he expects to make 12 awards to states.

For the most part, the 19 finalists are no surprise. Favored states like Georgia, Florida, and Illinois, which have solid records for reform, all made the cut. These states ranked third, fourth, and fifth in the Round One scoring, further solidifying their reputations as reform-focused states. In fact, the states that scored third through sixteenth in Round One all made it in the finalist list for Round Two (Delaware and Tennessee, the Round One winners, ranked first and second, respectively).

But there were some surprises. Arizona, which ranked 40th in Round One with 240 points, made it into the Round Two list of finalists. According to news reports, all Round Two finalists scored above 400 (out of a possible 500), which means that Arizona gained at least 160 points between the first and second rounds. Unfortunately, the Department of Education has not yet made score breakdowns for each state available so we don’t know what about Arizona’s new proposal improved its score so significantly.

Wild card California also made it on the Round Two finalist list, despite a Round One score of 336, placing the state 36th. However, California’s Round Two application differed significantly from its Round One application. The state chose to focus on a few large school districts including Los Angeles Unified, rather than seeking to gain more universal buy-in from its more than 1,000 school districts. Secretary Duncan specifically ok’d this plan for California, inspiring some vocal dissent for the plan.

Hawaii and New Jersey are also unlikely finalists. Both states scored below 400 in Round One, ranking 18th (New Jersey) and 22nd (Hawaii). Maryland, which didn’t apply in Round One, also made the list. And there are some states that didn’t make the cut, like Utah and Oklahoma, which were expected to make it through in Round Two.

Of course, without further details on how each state scored in this round, we cannot speculate one who the final 12 or so winners may be. And the Round Two Race to the Top process is far from over. States still need to present their proposals to the judges, which could further change rankings from where they currently stand.

Similarly, Secretary Duncan will have to determine how he will negotiate the distribution of funds among states to maximize the impact of the program. For example, if large states like California, Florida, and New York all receive grants (at a maximum of $700 million each), there will be far less left for the smaller states. Conversely, if none of these states receive a grant, there will be a lot more to go around for the smaller finalists like DC, Hawaii, and Rhode Island.

Luckily for the finalists, the entirety of the current Race to the Top funding is likely to remain intact – cuts to the program passed in a House spending bill were rejected by the Senate. And Race to the Top may continue past the current competition as well – both the House and the Senate Appropriations subcommittees included some amount of Race to the Top funding in their 2011 bills.

Check back with Ed Money Watch more details on Race to the Top.

Congress Makes First Steps in the Federal Education Budget Process

July 20, 2010

Last Thursday the House Appropriations Subcommittee on Labor, Health and Human Services, and Education passed its fiscal year 2011 funding bill – the first step in the annual appropriations process that will determine funding levels for all but a few federal education programs. Fiscal year 2011 begins October 1st, 2010. Overall, the chairman’s mark included total funding of $176.4 billion, $1.5 billion less than the president’s 2011 budget request. This includes $72.0 billion for the Department of Education, $1.5 billion less than the president’s request and $7.7 billion more than the current year funding level.

The Subcommittee’s mark up provides more funding for education programs than the fiscal year 2010 appropriations bill in all but a couple occasions. The largest increase (in terms of percent of funds) went to the Promise Neighborhood program, which the subcommittee provided $60 million up from $10 million in 2010. However, the Promise Neighborhood increase provided in the mark up dwarfs the president’s requested funding level of $210 million for the program.

The subcommittee mark up also includes a significant increase for Innovation and Improvement programs, which would receive $2.4 billion in 2011, up from $1.4 billion in 2010. The Innovation and Improvement increase over 2010 levels can be attributed almost entirely to Race to the Top and the Investing in Innovation fund, which received no appropriation in the 2010 fiscal budget. These programs, which were created by the American Recovery and Reinvestment Act of 2009 and funded at a combined $5 billion, have become favorites of the Obama Administration for their emphasis on education reforms. The president requested $1.5 billion for Race to the Top and $500 million for Investing in Innovation for fiscal year 2011. However, the subcommittee mark up provides $800 million for Race to the Top in fiscal year 2011 and $400 million for Investing in Innovation.

Innovation and Improvement programs also include teacher-centric programs like the Teacher Incentive Fund, school choice programs like Charter School Grants, and subject-specific programs like Teaching American History grants. The president’s budget request included a substantial reorganization of these programs including several consolidations and a few eliminations which would have brought total Innovation and Improvement spending not include Race to the Top and the Investing in Innovation fund funding to $4.5 billion. The relatively low appropriation for these programs included in the subcommittee-passed bill suggests that the Democratic majority on the subcommittee has chosen to ignore the President’s proposed program consolidations in this budget cycle, likely so they can be considered during the reauthorization of the Elementary and Secondary Education Act next year.

The subcommittee mark up also includes $23.1 billion for Pell Grants, $5.7 billion more than the 2010 appropriation. In contrast, the president requested $0 in discretionary spending for Pell Grants because he proposed making it a mandatory spending program. Congress rejected this proposal. But the $23.1 billion in the mark up is not enough to maintain the current maximum grant level of $4,860. Congress also passed a reconciliation bill earlier in 2010 that provides an additional $13.5 billion for Pell Grants. Combined with the $23.1 billion in 2011 spending, these funds will cover the full $35.1 billion cost of the program.

Title I Grants to School Districts and Individuals with Disabilities Education Act (IDEA) Grants to States also received increases in the subcommittee mark up. Title I would be funded at $14.9 billion under the chairman’s mark, $400 million more than in 2010 and than the president’s requested level. IDEA would be funded at $13.0 billion, $412 million above the 2010 level and $153 million more than the president’s request.

The subcommittee mark up also provides $5.3 billion for School Improvement Programs, $30 million less than the 2010 funding level but $2.2 billion more than the president’s requested level. School Improvement Programs include Improving Teacher Quality State Grants, Educational Technology State Grants, State Assessment Grants, and other programs aimed at improving education services. The president’s budget request made dramatic changes to these programs including some consolidations and eliminations that would have resulted in a total appropriation of on $3.1 billion. However, the subcommittee’s mark up maintains near 2010 spending levels for these programs, suggesting that they have chosen to ignore the president’s requested changes.

Unfortunately, the subcommittee has only made a summary table of its mark up available to the public – instead of the full text or a comprehensive table. The summary includes very few program-specific funding levels, making it impossible to determine how much a program like the Teacher Incentive Fund would receive in 2011 based. That said, the House subcommittee mark up represents a large increase in education funding for 2011 over 2010 levels, though it does not quite reach the president’s request. This increase is sure to be unpopular with deficit-sensitive legislators once the bill reaches the full Appropriations Committee and is later considered on the House Floor (which might not be until after the November election). Check back with Ed Money Watch for updates on this process.

More Information on the Expenditure of ARRA Funds

July 15, 2010

At Ed Money Watch we have been tracking the expenditure of funds from the American Recovery and Reinvestment Act of 2009 (ARRA) as closely as possible. Until now, the best source of information on this topic has been Department of Education accounting data that track the obligation and outlay of funds under each ARRA program. But this data only tells us when the ARRA funds leave the federal coffers and are disbursed to states. It doesn’t indicate when the school districts actually spend the funds.

Of course, there is also recipient reported data on ARRA spending which was mandated by the legislation. While these data do provide more information on expenditures at the district level, they lack the detail and reliability needed for in-depth analysis.

Today, however, the Center on Education Policy (CEP) released a new report that provides some new information on how districts have spent ARRA funds and what those funds have meant for school districts. The report, titled “Teaching Jobs Saved in 2009-10 But Teacher Layoffs Loom for Next School Year,” draws conclusions from a survey administered in the spring of 2010 to a nationally representative sample of 233 districts from 590 states. Luckily for us, the survey included questions about when districts expect to run out of ARRA funds, a question that we have thus far been unable to answer from the available sources.

The CEP survey found that 60 percent of school districts expected to spend all of the State Fiscal Stabilization Fund (SFSF) monies they have already received by the end of the 2009-10 school year. The SFSF is a new program under the ARRA intended to help states stave off budget cuts. Given that the 2009-10 school year ended in June, this means that 60 percent of the nation’s school districts could have already spent all of their SFSF. However, this does not account for districts that have not yet received their full allocation of SFSF. For example, some states have yet to have their phase two SFSF applications approved by the Department of Education. Districts in these states are likely to receive another, though much smaller, allocation in the coming months, providing them additional funds for the 2010-11 school year.

In all, it’s not surprising that a good proportion of districts have used all of their SFSF monies, particularly those in states facing significant budget shortfalls like California. Ed Money Watch’s previous analyses of Department of Education data show that these states tend to outlay their SFSF monies more quickly than those states facing smaller shortfalls.

An additional 37 percent of surveyed districts said that they expect to use all of their SFSF monies by the end of school year 2010-11 and only 4 percent said they expected to use all their funds by the end of school year 2011-12. School districts must spend all of the SFSF monies by September 30, 2011, the day before fiscal year 2011 ends (though one month into the 2011-12 school year). However, any SFSF monies not obligated by the states by September 31, 2010 must be distributed to school districts through the Title I funding formula rather than through a state’s primary education funding formula.

The story for ARRA Title I and ARRA Individuals with Disabilities Education Act (IDEA) is somewhat different than for SFSF. Only 21 percent of districts reported that they would spend all their ARRA Title I funds by the end of the 2009-10 school year, and only 19 percent reported they would do so with their IDEA funds. In contrast, the vast majority of school districts, 71 and 70 percent, respectively, reported that they would spend all of their Title I and IDEA funds by the end of the 2010-11 school year. All of the ARRA Title I and IDEA funds have been available to states since the summer of 2009, meaning that school districts should have access to all of them now.

Again, it does not come as a great surprise that school districts would not use all of their Title I and IDEA ARRA funds until the end of next school year. Department of Education data also show that states have been slow to outlay these funds, perhaps because they have greater restrictions on how they can be used. Additionally, school districts had to spend their regular 2009 and 2010 Title I and IDEA appropriations in the same time frame as their ARRA allocations of those funds. This double duty could have further slowed the rate at which the funds were spent.

The CEP report confirms what we have suspected. Some school districts will soon be running out of SFSF monies, leaving them in a tight budget situation for the coming school years. However, these same districts do have ARRA Title I and IDEA funds remaining to help support specific programs targeted at low-income and special education students. While these funds can help fill a budget void, school districts will have to start making some difficult decisions, like cutting teaching staff or programs, to make ends meet. Absent further federal support, the coming school year is going to be an exercise in flexibility and creativity for these school districts.

Keeping Higher Ed in the Debate on State Education Spending

July 13, 2010

The Education Jobs Fund, a $10 billion program passed in the House to support state K-12 education budgets, has been a common topic of conversation in the policy world. Debates surrounding proposed cuts to Race to the Top to pay for the program, along with discussions about whether the Education Jobs Fund is even necessary, have dominated recent media publications. But little has been said about the condition of higher education spending at the state level, a sector explicitly excluded from the version of the Education Jobs Fund passed in the House – though earlier House and Senate versions of the proposal included funding for higher education. Should we be concerned that higher education funding has dropped off the Congressional radar?

According to the Education Commission of the States, higher education spending accounts for an average of 23 percent of total state spending for education purposes. But the degree to which the economic downturn has affected public institutions of higher education varies greatly from state to state. For example, budget cuts to higher education in California resulted in a 32 percent increase in tuition at University of California campuses. Similarly, Florida’s Board of Governors and legislature passed a combined 15 percent tuition increase at the state’s universities. And in Wisconsin, a shortage of resources for higher education resulted in a 5.5 percent increase in tuition at University of Wisconsin campuses.

Ed Money Watch analysis shows that states have relied on State Fiscal Stabilization Funds (SFSF) provided as part of the American Recovery and Reinvestment Act of 2009 to maintain higher education spending in addition to K-12 spending. According to its State Fiscal Stabilization Fund phase one application, Louisiana planned to spend 59.7 percent of its total SFSF allocation on higher education spending. Colorado planned to spend 48.6 percent of its SFSF allocation on higher education and Arizona planned to spend 43.1 percent. On average, states planned to use 17.3 percent of their SFSF monies on higher education purposes.

Despite all this, the House recently chose to exclude institutions of higher education from the Education Jobs Fund. Any funds provided through the program must be used on K-12 salary and benefits expenses. However, higher education spending is still included in the maintenance of effort provision included in the pending proposal. States would be required to maintain both K-12 and higher education spending or proportion of total spending at 2009, 2010, or 2006 levels, depending on which option of the maintenance of effort provision they are eligible for. The decision to include higher education in the maintenance of effort requirement is somewhat perplexing. It seems questionable that Congress would require certain levels of higher education spending from the states if states are not able to use Education Jobs Fund monies to support higher education.

A new resource from U.S. News & World Report provides more details on the future of higher education funding in the country given current budget woes. U.S. News & World Report compiled data on each state’s probability of facing a recession in the next six months, estimated budget shortfall, estimated change in tax support for higher education, and typical per-pupil support from state tax dollars and created a map that shows whether a state’s public education system faces high or low financial pressure in 2011.

For example, the map shows that California has a 30 percent change of a recession in the next six months and is estimated to face a 9.1 percent budget shortfall in 2011. The state’s tax support for higher education is estimated to drop 8.6 percent and typical per-pupil tax support for higher education is $6.928. California’s higher education system is considered to face “very high” financial pressure in 2011.

In contrast, Arkansas’ higher education system is considered to face a “negligible” amount of pressure in 2011. The state has a 15 percent change of recession and faces a 0.0 percent budget shortfall for 2011. The tax support for higher education is estimated to increase by 2.9 percent and typical per-pupil tax support for higher education is $7,955.

Though it looks unlikely that the Education Jobs Fund (if it passed the Senate and is ultimately signed into law) will ever include higher education spending, public higher education is still an important part of the dialogue on greater education spending. Unfortunately, the current debate ignores the role higher education plays in state budgets and the education pipeline despite information available through the U.S. News & World Report map and news coverage of state level higher education budget decisions. Ed Money Watch hopes Congress incorporates higher education spending more explicitly into the debate for the sake of current and potential students and the on-going success of the nation’s public higher education system.

Comparing Education Jobs Fund and Race to the Top Allocations

July 8, 2010

Yesterday, Ed Week’s Michele McNeil published an interesting analysis comparing states’ potential allocations under the Education Jobs Fund to their potential maximum winnings under Race to the Top. The Education Jobs Fund is a $10 billion program pending in Congress to help states avoid K-12 teacher layoffs, while Race to the Top is a $4.4 billion competitive grant program enacted in 2009 to support states implementing reform initiatives. A bill that passed the U.S. House of Representatives last week and now awaits Senate consideration cuts $500 million from the remaining $3.4 billion for Race to the Top to help offset the costs of the Education Jobs Fund. However, several Senators and the President have both expressed disapproval of any bill that would take money away from Race to the Top.

In her analysis, McNeil suggests that for some states, like those who decided not to apply for Race to the Top or who have little chance of winning any of the money (Race to the Top is a competitive grant program), the House-passed Education Jobs Fund is more attractive. As a result, these states should be in favor of the proposed cuts to Race to the Top and passing the Education Jobs Fund. At the same time, for states that are highly likely to win Race to the Top funds, any cut to the program is unlikely to affect them because, even with the cuts, they will receive funds from both programs.

As a result, the tradeoff between the Education Jobs Fund and Race to the Top only truly matters for states at the margin of winning Race to the Top. In other words, there are likely two or three states that will win a Race to the Top grant if Congress doesn’t approve the $500 million cut from the program, but will not win a Race to the Top grant if Congress does decide to make the cut. For all states but California and Illinois, their potential winnings under Race to the Top are larger than any allocation they would receive under the Education Jobs Fund.

To get a sense of which states might be most affected by this tradeoff, Ed Money Watch has extended McNeil’s analysis to include all 50 states, Puerto Rico, and the District of Columbia. The table below shows each state’s potential allocation under the House-passed Education Jobs Fund, and maximum potential winnings under Race to the Top if they applied in round two. Additionally we have included each state’s previous ranking under round one of the Race to the Top competition and a marker of whether the state is considered a wild card under round two of Race to the Top.

Using this data, we estimated which states are most likely to win funds during round two of Race to the Top using both their previous rankings and incorporating some of the potential wild cards into the theoretical winners circle. These wild card states, which have received media attention for their dramatically altered round two Race to the Top applications, include California, Colorado, Maryland, Ohio, Oklahoma, Rhode Island, and Wisconsin. It is important to note, however, that these estimates are purely conjecture based on the available information.

If the outcome of round two of Race to the Top is identical to round one and Race to the Top funds are not cut, we estimate that 10 states will win awards totaling $3.3 billion (those states that ranked 3rd through 12th in round one). These states are Georgia, Florida, Illinois, South Carolina, Pennsylvania, Rhode Island, Kentucky, Ohio, Louisiana, and North Carolina. However, if Congress passes and the President signs the Education Jobs bill, only $2.9 billion would be available under Race to the Top. In this situation North Carolina, which is ranked lowest, would not receive a $400 million Race to the Top grant. While North Carolina would receive $295.3 million under the Education Jobs Fund, it would lose a net $104.7 million.

If some of the wild card states that have dramatically improved their Race to the Top applications do win awards in round two, the lineup of winners will be somewhat different. Under this situation, we estimated two potential scenarios – one in which California does win a $700 million grant and one in which it does not win such a grant. Under the first scenario with $3.3 billion in total winnings, the potential winners are Georgia, Florida, Illinois, South Carolina, Rhode Island, Wisconsin, California, Colorado, Oklahoma, and Maryland. Should the total Race to the Top pot be limited to $2.9 billion, two or three of those wild card states like Wisconsin, Colorado, Oklahoma, and Maryland could be on the chopping block. For these states, Race to the Top would also provide greater funding than the Education Jobs Fund.

If California does not win in round two of Race to the Top, we estimate that the potential winners totaling $3.4 billion in winnings could include Georgia, Florida, Illinois, South Carolina, Rhode Island, Ohio, Pennsylvania, Wisconsin, Colorado, Oklahoma, and Maryland. Under the $2.9 billion Race to the Top scenario, the wild card states would again be threatened with no Race to the Top winnings.

In the end, and in purely monetary terms, it seems that the trade off between the Education Jobs Fund and the proposed Race to the Top cut only affects a few states – those at the margin of winning Race to the Top like North Carolina, Wisconsin, Colorado, Oklahoma, California, and Maryland. For states like Florida, Georgia, Louisiana, and South Carolina, Race to the Top seems to be in the bag and any cuts to the program will not affect them. In fact, they will come out ahead with hundreds of millions of dollars from both the Education Jobs Fund and Race to the Top. Similarly, for states that have chosen not the participate in Race to the Top at all, like Texas, Alaska, and Minnesota, the Education Jobs Fund makes financial sense because they are guaranteed an allocation.

It should also be said that a $400 million Race to the Top grant comes with a different set of requirements and restrictions than a $400 million Education Jobs Fund allocation. Race to the Top winnings must be used to implement highly structured reform activities outlined in a state’s application. In contrast, the Education Jobs Fund monies must be used to support local salary and benefits expenses to keep teachers and other school personnel in their jobs. Thus, Race to the Top does not mean simple, fungible dollars in the state’s budget in the same way that the Education Jobs Fund would.

This discussion also ignores the political implications of the pending Education Jobs Fund and Race to the Top. Many legislators and policymakers view the House-passed Education Jobs Fund unfavorably because they consider it wasteful spending that allows schools to maintain the status quo. For these stakeholders, the Education Jobs Fund is a no-go even if it means great financial gain for their state. At the same time, some legislators and policymakers have soured on Race to the Top because they believe it is supporting the wrong types of reform initiatives and giving too much power to the Obama Administration. These critics favor cuts to the program even if it could potential hurt their states.

And in many cases, legislators subscribe to both schools of thought and would like to see an end to the Education Jobs Fund and Race to the Top. As a result, the discussion in Congress and elsewhere over these two programs has little to do with potential financial gain for states – even in those that need it most – and more to do with politics.

To download a PDF of these data, click here

More Twists in the Education Jobs Fund Saga

July 6, 2010

Much has happened since Ed Money Watch wrote about the Education Jobs Fund last Thursday. First and foremost, the House passed the amended version of the war supplemental bill that included $10 billion for the Education Jobs Fund. This program would provide additional funding to states to save jobs in K-12 education. The passed version also includes $800 million in education program rescissions including $500 million from Race to the Top, $200 million from the Teacher Incentive Fund, and $100 million from Charter School Grants.

But the move to pass the new version of the Education Jobs Fund has riled some intense opposition. U.S. Secretary of Education Arne Duncan balked at the cuts to education reform programs and offered to work with House leaders to find other education programs to cut. The Obama Administration notified House leaders that it would recommend a veto of the supplemental bill if it included the rescissions to Race to the Top and other programs. And a group of 13 moderate Democrats in the Senate submitted a letter to Chairman of the Senate Appropriations Committee, Daniel Inouye (D-HI), decrying the House bill’s cuts to important education reform programs.

Some state education leaders are also less than pleased with the proposed $500 million in cuts to Race to the Top. Ed Week talked with officials from South Carolina, Louisiana, and Florida who all expressed dismay that Race to the Top funds could be cut, potentially limiting the number of states that would receive awards. All three of these states submitted round two applications for Race to the Top because of the large amount of money remaining for the program.

One state, Texas, has been singled out in the Education Jobs Fund bill language for extra special treatment. Last Friday, the House passed an amendment to the Education Jobs Fund that would place restrictions on the use of funds in Texas. According to Congress Daily, Texas House Democrats crafted the amendment to ensure that the state of Texas does not misuse this new round of funding like they claim the state misused State Fiscal Stabilization Fund (SFSF) monies in the past.

Specifically, these legislators claim that Texas used SFSF monies to supplant state spending for education, padding the state’s rainy day fund instead of supporting the state’s schools. To combat this, the amendment would require that Texas distribute Education Jobs Fund monies via the Title I formula, rather than the state’s primary education funding formula. Additionally, Texas Governor Rick Perry must certify that K-12 education spending in fiscal years 2011, 2012, and 2013 will remain at the same proportion of total state spending as was determined for fiscal year 2011 before the passage of the Education Jobs Fund. Unless the Governor agrees to both of these requirements, no allocation shall be made to Texas.

Of course, the situation surrounding this Texas provision is far from straight forward. Some Texas officials claim that the state used SFSF monies in the same manner as all other states and is being singled out because it chose not to participate in Obama Administration programs like Race to the Top. They claim that the Texas-specific provisions in the Education Jobs Fund will actually hurt Texas’ schools and students by depriving them of the federal money if the state is unable to comply with the requirements.

Between the unpopularity of the Education Jobs Fund in the Senate, disagreement surrounding the education program rescissions, and the new controversy with the Texas provision, the conference committee on the supplemental funding bill is likely to be drawn out and contentious. It seems unlikely that any of these provisions will make it out of conference unchanged. And if they do, the President seems unlikely to sign a bill that cuts spending for Race to the Top and other programs. Check back with Ed Money Watch for updates.

Details on the New House Version of the Education Jobs Fund

June 30, 2010

Last night the House Committee on Rules released a new amendment to a supplemental appropriations bill to fund overseas military operations. Democratic Leaders, including Appropriations Committee Chairman David Obey (D-WI), have been working to get a bill that can pass in the House after an early version failed to win support in committee when some Democrats balked at spending for domestic programs in the bill. (The Senate passed its version in May, without any of the contentious spending provisions.) The latest amendment includes a revamped version of the Education Jobs Fund.

The Education Jobs Fund, funded at $23 billion for the 2010-2011 school year in an earlier version of the bill, would have provided additional funds to help local education agencies and public institutions of higher education save jobs. This most recent version of the program is funded at $10 billion and only provides funds to local education agencies to help save K-12 education jobs, not colleges and universities. The mechanism by which it is distributed to local education agencies (LEAs) is also different – it can be distributed via primary state funding formula or based on each LEA’s share of a state’s Title I Part A allocation. And this Education Jobs Fund comes at a cost to other education programs – the new amendment includes $800 million in rescissions to other Department of Education programs.

The new version does include several provisions to ensure that the money is made available quickly, unlike its predecessor – the State Fiscal Stabilization Fund that was enacted under the American Recovery and Reinvestment Act of 2009, and earlier proposed versions of the Education Jobs Fund. For example, each state’s governor must apply for the funds, but the application cannot require more information than is necessary to ensure that a state is in compliance with the law. Similarly, if a governor does not apply for funds within 30 days of the law’s passage, the U.S. Secretary of Education can allocate the funds to another state entity like a state Department of Public Instruction. The U.S. Secretary of Education must award the funds within 45 days of the law’s passage. Additionally, local education agencies do not need to submit new applications for the funds if their State Fiscal Stabilization Fund applications have already been approved. All of these provisions appear to be in direct reaction to the way the U.S. Department of Education and the State Education Agencies administered the State Fiscal Stabilization Fund which likely slowed the rate at which funds were allocated and spent.

The new version of the Education Jobs Fund also includes a very different Maintenance of Effort provision than what was included in the State Fiscal Stabilization Fund (SFSF). Under that provision, states were required to maintain 2006 levels of spending for K-12 and higher education to receive SFSF monies. Under the proposed Education Jobs Fund, states can either maintain K-12 and higher education spending at 2009 spending levels; maintain K-12 and higher education spending levels at the same proportion of state spending as they did in 2010; or if tax collections in 2009 were lower than tax collections in 2006, maintain K-12 and higher education spending levels at either 2006 levels or in the same proportion of state spending as they did in 2006. While this gives states several options for complying with the Maintenance of Effort provision, the inclusion of higher education spending levels is somewhat counter-intuitive. If states cannot use the Education Jobs Fund to maintain higher education jobs, then why must they maintain higher education spending levels to receive the Education Jobs Fund monies?

But this new version of the Education Jobs Fund won’t be funded entirely through the deficit. Congressional Democrats needed to find $800 million in offsets (or cuts to other programs that have already been allocated funding but have not yet spent it) to gain political traction for the program. This includes a $200 million rescission in unspent funds from the Teacher Incentive Fund program, a $500 million rescission from the Race to the Top program, and a $100 million rescission from charter school grants under No Child Left Behind. The text of the amendment does not specify the fiscal year from which funds would be rescinded.

Clearly, House Democrats are willing to make some serious concessions to gain passage of the Education Jobs Fund. They have significantly lowered funding levels, narrowed the scope of the program, and sacrificed funding for the Obama administration’s favorite reform programs for the cause. But this fight is far from over. The House has not yet voted on the supplemental appropriations bill, or this latest amendment. Should the House pass the bill with the Education Jobs Fund intact, the program would still have to make it through conference committee with the Senate, and the Senate did not include any education funding in its passed version of the supplemental appropriations bill. Check back with Ed Money Watch for more updates on this process.

Better Understanding Federal K-12 Teacher Programs

June 29, 2010

We’ve been hearing a lot lately about teachers. State budget crises have forced school districts to pink slip thousands of teachers across the country and teacher union contracts require inexperienced teachers to be let go first. This has left many, primarily low-income, schools to increase class sizes or rely on substitutes to fill teaching gaps.

At the same time, much media attention has been focused on the two Obama administration one-time competitive grant programs signed into law as part of the American Recovery and Reinvestment Act of 2009. The $4.4 billion Race to the Top (RttT) program requires that states design programs that improve the distribution of teachers in order to win grants. This requirement has led several states to pass teacher-focused legislation to comply with these requirements. Similarly, the $650 million Investing in Innovation (i3) program includes an “improving teacher distribution” category under which 354 local education agencies and organizations applied for grants.

But RttT and i3 are not the only federal programs that address teachers – despite all of the media attention they have received. In fact, the federal government funds 15 individual programs, run by the Department of Education, that provide either formula or competitive grants to local education agencies, states, institutions of higher education, and partnerships with non-profits, or grants or loans directly to teachers. In 2010, the federal government spent $3.9 billion – 5.9 percent of the Department of Education’s discretionary budget – on programs addressing teacher training, distribution, compensation, and retention.

Nine of these programs fall under the Elementary and Secondary Education Act (ESEA), accounting for $3.7 billion in spending. The Obama administration’s proposed program consolidations for ESEA reauthorization would fold these programs with other instructional and leadership initiatives into several larger programs relating to teaching and learning. This would include one $2.5 billion formula grant program for efforts to improve teacher effectiveness and several smaller competitive grant programs targeted at improving teacher quality and instruction in specific subject areas.

Detailed information on these federal programs is not readily available through a centralized source, making it difficult to judge the federal government’s support for teachers. In response, the Federal Education Budget Project (FEBP) has published a Background and Analysis page as part of the FEBP website that explains the size, scope, and purpose of federal programs that support teacher training and development programs. This timely new resource helps provide clarity on the many different federal teacher programs.

The Federal Programs for K-12 Teachers page includes summaries and funding information for the 15 federal teacher programs in the table below.1

K-12 Teacher Programs and Funding
($ millions)

Discretionary Programs 2010 Funding
Improving Teacher Quality State Grants 2,948
Teacher Incentive Fund 400
Mathematics and Science Partnerships 180
Teaching American History 119
Special Education Personnel Development Grants 91
Perkins Loan Cancellation for Teachers and Head Start Instructors* 67
Transition to Teaching 44
Teacher Quality Partnership Grants 43
National Writing Project 26
Troops-to-Teachers 14
Advanced Credentialing/Advanced Certification 11
Teachers for a Competitive Tomorrow 2
Academies for American History and Civics 2
Discretionary Total 3,947
 
Mandatory Programs 2010 Funding
Stafford Loan Forgiveness for Teachers** 130
TEACH Grant 80
Mandatory Total 210
*Perkins Loan Cancellation appropriation; funds teacher loan cancellation and other loan cancellations.
**Estimate.

 

1These programs are labeled as K-12 programs. However, it is often unclear whether they might also apply to pre-kindergarten teachers too. Our colleagues at Early Ed Watch raise that question in a post today.

Mining the Investing in Innovation Grant Data

June 23, 2010

Earlier this week, the U.S. Department of Education (ED) released some detailed data on the Investing in Innovation (i3) grant applications they received last month. The i3 program is a new $650 million program that was created in the American Recovery and Reinvestment Act of 2009 to provide grants to local education agencies (LEAs), partnerships between nonprofits and consortia of schools, and partnerships between non profits and LEAs to fund innovative reform programs. Applications were due on May 12, but more than 2,400 organizations and LEAs submitted intent-to-apply notices on April 1st. These data allow us to get a better sense of the applications that were submitted to ED and compare this information to expectations based on the previous intent-to-apply notices.

In total, 1,698 eligible applications were submitted. Grants can fall in one of three categories: development grants which help implement promising, but relatively un-tested, strategies and programs on a limited scale; validation grants, which require more concrete evidence of success; and scale-up grants that support programs or strategies with strong evidence of success that will be scaled to meet the needs of more students. Of the submitted applications, 1,324 (78.0 percent) were for development grants, 355 were for validation grants (20.9 percent), and 19 were for scale-up grants (1.1 percent). This is slightly different than expected based on the intent-to-apply notices received by ED. Of those, 87 organizations (3.6 percent) notified ED of their intention to submit a scale up grant, 68 fewer than actually submitted such applications.

This change in the number of scale-up grants received verses those expected based on intent-to-apply notices has some interesting implications for the types of proposals that ED might ultimately fund. ED previously announced that it expected to award up to 100 development grants, 100 validation grants, and 5 scale-up grants. Based on those expectations, only 7.6 percent of development grant applicants will receive awards, while 28.2 percent of validation and 26.3 percent of scale-up grant applicants will. Given this disparity, perhaps ED should adjust the number of grants it plans to distribute under each category so that awards more closely reflect the number of applications received in each category.

The average grant proposal was $4.1 million for development grants, $19.4 million for validation grants, and $31.0 million for scale-up grants.

i3 grant proposals were required to fall under one of four “absolute priorities” including programs that address effective teachers and principals, use of data, high standards and high-quality assessments, and persistently low-performing schools. Of the applications submitted, there were 354 (21.9 percent) under the effective teachers and principals priority, 274 (17.0 percent) under the data use priority, 592 (36.7 percent) under the standards and assessments priority, and 394 (24.4 percent) under the low-performing schools priority. Compared to the intent-to-apply notices, a higher percentage of applicants filed under the standards and assessments priority, while a lower percentage filed under the low-performing schools priority, suggesting a slight shift in priorities among organizations and LEAs.

The most development and validation grants - 465 and 123, respectively - were submitted under the high standards and assessments priority, while the most scale up grants – 7 – were submitted under the persistently low-performing schools priority. This distribution suggests that the most evidence of success is available for supporting low-performing schools, while there may be less hard-and-fast evidence supporting practices for improving standards and assessments.

As is to be expected, large states like California and New York had the most applications of any state, 221 and 145, respectively. But both states received fewer applications than expected based on intent-to-apply notices, particularly California which received 120 fewer applications than expected. The District of Columbia, which received a much larger proportion of applications relative to its size, also received almost half as many applications as expected. California, New York, and Texas also dominate the scale-up grant applications. Those three states received 11 of the 19 scale-up proposals, meaning that the recipients of those grant awards could be concentrated in these large states.

The i3 application reviewers certainly have their work cut out for them, especially since winners are expected to be announced at the end of July. It will be interesting to see how awards are distributed among the absolute priorities as well as among development, validation, and scale-up proposals. Given the impressive number of development grants received, we expect the competition to be intense. Best of luck to all the applicants!

UPDATE: Last month, Eduwonk reported that Secretary Of Education Arne Duncan mentioned the possibility of only 70 i3 award recipients. We're guessing that would mean about 50 development grant winners, 15 validation grant winners, and five scale-up grant winners.

ARRA Funds and State Budget Gaps

June 22, 2010

Congress Passed the American Recovery and Reinvestment Act (ARRA) of 2009 almost a year and a half ago, providing nearly $50 billion for education programs like Title I, Individuals with Disabilities Education Act, and Pell Grants. Additionally, the law included $48.6 billion for the State Fiscal Stabilization Fund, a new program meant to help states shore up education budget shortfalls. Since then, state budget shortfalls have continued to grow, causing lawmakers and interest groups to call for additional money to help support state education funding. But little discussion has focused on how much of the ARRA funds first made available to states in 2009 have actually been dispersed on a state by state basis. As would be expected, states with the highest expected budget gaps, for the most part, have dispersed the highest percentage of their ARRA funds. Similarly, some states with the smallest gaps have dispersed less of their ARRA funds. And of course, there are some notable exceptions to both of these trends.[1]

California, with the highest predicted budget gap in fiscal year 2010 at $54.6 billion (or 64.5 percent of the state’s current budget of $85.3 billion), has dispersed 78.3 percent if its ARRA funds, the highest in the country. Illinois, which dispersed 77.4 percent of its ARRA funds, has the fourth highest budget gap for 2010 in the country. Arizona, Iowa, Nevada, New Jersey, and Washington have all dispersed more than 70 percent of their obligated ARRA funds. Three of those states, Arizona, Nevada, and New Jersey, all have predicted state budget gaps above 38 percent of their current state budgets. Iowa and Washington, on the other hand, have relatively low budget gaps at $1.8 billion (or 22.7 percent of a current $7.9 billion budget) and $6.2 billion (or 27.8 percent of a current $22.3 billion budget), respectively.

Several states have dispersed surprisingly low percentages of their allocated ARRA funds. Wyoming, for example, has dispersed only 15.7 percent of its ARRA funds. However, Wyoming has the smallest budget gap in the country at $32 million (or 1.7 percent of the current $1.9 billion budget). Delaware, which has dispersed the second lowest percentage of ARRA funds at 24.7 percent, also has a relatively low budget gap at $557 million (or 17.2 percent of the current $3.2 billion budget). Alaska, the District of Columbia, Maryland, Nebraska, New Mexico, South Carolina, and Virginia have all also dispersed less then 40 percent of their ARRA funds. While 6 of those states have relatively low predicted budget gaps, Alaska, which has only dispersed 25.5 percent of its ARRA funds, has the 9th highest budget gap in the country at $1.3 billion (or 30.7 percent of the current $4.2 billion budget).

Other states have also dispersed the ARRA funds more slowly than would be expected given their predicted budget gaps. New York, for example, has a predicted gap of $21 billion over fiscal year 2010 (or 38.0 percent of the current $52.3 billion budget), the 6th highest in the country. But the state has only dispersed 42.2 percent of its ARRA funds, ranking 41st in the country. Similarly, Rhode Island faced a large budget gap this year but has only dispersed 51.3 percent of its ARRA funds.

Conversely, a couple states have dispersed relatively high percentages of their ARRA funds despite somewhat low budget gaps. Both Massachusetts and Michigan have dispersed more than 60 percent of their ARRA funds even though both states have relatively low budget gaps.

Overall, the 50 states, Puerto Rico, and the District of Columbia have dispersed 57.1 percent of their obligated ARRA funds. While this number seems low overall, states vary widely on the percent of funds they have dispersed, often in keeping with the severity of their budget gaps over fiscal year 2010. Despite this trend, some states have fallen behind in dispersing the funds, while some states are near to running out. This disparity will likely become more problematic as states ramp up for fiscal year 2011 and the 2010-2011 school year. Ed Money Watch will continue to follow these developments.

A PDF of these data by state can be downloaded here.


[1] Budget gap numbers come from the Center for Budget and Policy Priorities: http://www.cbpp.org/cms/?fa=view&id=711
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