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School & District Management

Economic Stimulus: Questions—and Answers

March 03, 2009 10 min read
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Public education is among the biggest winners in the American Recovery and Reinvestment Act of 2009, in line for some $115 billion in federal aid. Educators have plenty of questions about how that aid will be distributed, and Education Week Politics K-12 bloggers Alyson Klein and Michele McNeil have been gathering answers. Here are highlights from some of their recent blog posts.

(Klein and McNeil continues to answer more questions. See round two of Q&A.)

Q: How much will my state/district/school be getting from the stimulus?

A: The U.S. Department of Education has state-by-state estimates for Title I, the Individuals with Disabilities Education Act, and the state stabilization fund available on its Web site. The department is expecting to put out official guidance to states and districts on accessing the money as soon as this week. Department officials have also said that the first set of money will be available within 30 to 45 days.

Q: Are there funds to support school modernization and construction in the stimulus bill?

A: This was a bone of contention in Congress as the package was being crafted. It goes back, yet again, to the state stabilization dollars that aren’t being used to backfill state cuts. Within that fund, the $39.5 billion slated for school districts can be used for a host of education-related programs, including school modernization and repair. And the state stabilization fund also includes another $8.8 billion that goes to governors. They can use it for pressing needs, such as public safety, but can also direct it to education, including school modernization, renovation, and repair. It’s important to note, however, that new school construction is not supposed to be paid for using stimulus dollars. In a separate part of the stimulus package, there is additional money for school bonding—$22 billion in tax credits for school construction bonds and $2.8 billion to expand the existing Qualified Zone Academy Bonds program, which is used for renovation and repairs.

Q: How will teacher salary be linked to student academic performance under this package? How will this impact “highly qualified” teacher criteria?

A: There’s no explicit language in the stimulus package linking salary to student performance. However, the stimulus does provide an additional $200 million for the Teacher Incentive Fund under the U.S. Department of Education. This now-larger pot of money will be used, as it was before, to fund pay-for-performance programs in school districts. As to the second part of the question, one of the “assurances” that governors have to make to receive their chunk of the state stabilization money is to take steps to address equitable distribution of “highly qualified,” experienced, and in-field teachers across all schools, including in very poor schools. This has been a provision under the No Child Left Behind Act that hasn’t been very well enforced. Finally, the equitable-distribution requirement also asks states to “improve teacher effectiveness.” Although there are no details on how states should address teacher effectiveness; this is potentially a new direction for the federal government, which has not referenced the issue before.

Q: What are the specifics on the innovation fund? (It’s being lumped in with the incentive funds in a lot of stimulus coverage.)

A: The innovation fund is part of the $5 billion from the state stabilization fund that will go to the Education Department and be under the direct control of Secretary Duncan, who will award incentive and innovation grants and who is referring to the $5 billion as the Race to the Top fund. The innovation fund is worth $650 million. The recipients will be local school districts, partnerships between a nonprofit organization and one or more school districts, or a nonprofit and a consortium of schools. The awards will be given to districts or other eligible entities that have made gains in closing the achievement gap, according to the law. School districts must also have met annual state performance measures for at least two years in a row, have demonstrated academic achievement improvement for all groups of students, and have made progress in other areas, such as graduation rates and high-quality teachers. The districts must also demonstrate that they can get matching funds through partnerships with the private sector. Mr. Duncan has said he wants to use these awards—and the entire $5 billion fund—to push the “reform agenda.”

Q: Are states supposed to restore spending to fiscal 2008 or fiscal 2006 levels? The law says different things in different places.

A: To qualify for state stabilization funds, states must be able to use their own money to fund schools to the level at which they were doing so in fiscal 2006. Then, they must use their federal stabilization money to backfill any cuts they made below those levels and to restore funding to fiscal 2008 levels. This is an issue for Florida, which will seek a waiver from that 2006 “maintenance of effort” requirement.

Q: My school district, like many, is interested in getting training in some continuous improvement initiatives to help advance student performance and hold down costs. The problem, of course, is getting the money for the training. The question is, will the new stimulus package provide monies for grants for schools to get innovative training to better their operations? If so, who would we contact, what would that type of grant be called, what is the range of the grant award, and when will it be available?

A: This question illustrates that there will be a lot of money out there that can be used for a lot of different things. Ultimately, once the money trickles down to the district level, school districts will have a lot of discretion to decide how to spend the money. Some may choose to hire or rehire teachers, some may purchase technology, or others may do the kind of professional development you’re talking about. More specifically, your district may be able to tap the new, $650 million innovation fund.

Q: Title II is referenced in the “School Improvement Programs” section. I would appreciate any explanation.

A: This part of the stimulus bill sets aside $650 million for Title II D, which is the Enhancing Education Through Technology program that helps districts train teachers on technology. The money will be distributed through the existing formula that uses Title I to distribute grants to states, which then must distribute at least 95 percent of it to local districts. Note that this is not the $3 billion teacher-quality-formula state grant program.

Q: How will the stimulus package address funds for Title IV (Safe and Drug-Free Schools)?

A: Unlike Title I grants for disadvantaged students and money for special education, there isn’t a specific line item in the bill under the office of safe and drug free schools. But once cuts are taken care of, the rest of the money in the $53.6 billion state stabilization fund flows to districts through the Title I formula. Districts are allowed to use it for any activity authorized under a number of federal education laws, including the No Child Left Behind Act, which governs the safe and drug-free schools program. That means those excess state stabilization dollars can go to that program. But districts would have to deem it a higher priority than any of the other possible uses.

Q: Will the stimulus package offer any additional funding specifically for the Even Start Family Literacy Program (Title I, Part B)? Additionally, will the package include any additional funding for adult literacy and/or parenting education?

A: As with the safe and drug-free schools program, there isn’t a separate pot of money in the stimulus for Even Start, but, since it’s authorized under NCLB, districts can use a portion of their leftover money from the state stabilization fund for Even Start activities. That money can also be used for adult literacy programs authorized under the Adult and Family Literacy Act.

Q: In Arizona, full-day kindergarten was cut. Will the stimulus help offer that again?

A: The state stabilization money is supposed to be used first to backfill any cuts made to education. In general, states are supposed to restore funding levels through their school funding formulas, so if full-day kindergarten is part of your state’s formula, then it would likely get restored. If full-day kindergarten is a separate line item, then it becomes a little more unclear. Regardless, any leftover money after cuts are backfilled will be distributed to school districts based on the Title I formula, so there may be leftover money for other programs, too.

Q: Where can nonprofit organizations get more information with regard to this $650 million fund for school districts or districts in partnership with nonprofit groups?

A: This goes back to that $650 million innovation fund. It’s important to note that the nonprofits that receive these funds must partner with one or more districts and schools. It seems that Mr. Duncan and his team want to focus on efforts that can be researched and “scaled up.” As to which nonprofits are eligible, that’s a question that the education secretary may answer when he releases guidance on how to apply for the fund.

Q: Many school districts have cut transportation in an effort to keep the cuts away from the classroom. Can stimulus money be used to restore (backfill) transportation cuts?

A: Advocates for local districts flag this as a concern since transportation is not authorized under any of the federal education laws that are supposed to govern state stabilization dollars. The Education Department as of last week had yet to give specific guidance on this.

Q: How can districts, states, and others get access to funds from the “Race to the Top” pot? Will there be a proposal process? What types of initiatives can this money be used for?

A: In addition to the the $650 million innovation fund, the rest of the money will be awarded as “incentive grants” to states. Governors will apply and must show progress in four areas: maintaining state funding for education at 2006 levels; achieving equity in teacher distribution; improving data collection and use; and improving standards and assessment. Governors must “assure” they’ll make progress in each of those areas when they take their education stabilization fund money. U.S. Secretary of Education Arne Duncan has said he’ll use the smaller incentive grants to hold states accountable in those areas. The department hasn’t yet spelled out how districts and states can access these funds, which the law says shall be made available in fiscal 2010.

Q: Is there anything in the stimulus package to help charter schools?

A: Much of the money flows through existing formulas, such as Title I or IDEA, so any public charter school that benefits now from the formula will get a piece of the stimulus. The stabilization fund is used first to backfill cuts through the state’s school funding formula, so as long as the charter school gets money through the state’s funding formula, it would get money through the stabilization as well. Given the nature of the Education Department’s innovation fund, it’s likely charter schools would be good candidates for those grants as well. Charter schools may also be eligible for school bonding monies.

Q: There’s money for “school improvement” that the National Education Association is breaking down to show how much will go to each state. What can that money be used for?

A: The school improvement money is part of a program originally authorized under the No Child Left Behind Act that’s meant to help states revamp schools that are struggling to meet the goals of the law. Like Title I and IDEA, it’s a formula program, so everyone gets a piece. In doling out the money, states are supposed to give priority to districts that have the greatest need and a commitment to closing the achievement gap. The program received $3 billion in the stimulus package, and it’s slated to get about $500 million under the fiscal 2009 spending bill working its way through Congress this week. That’s a whole lot of cash, considering that the program wasn’t funded at all until fiscal 2007. In fiscal 2008, it got just $491 million total.

A version of this article appeared in the March 04, 2009 edition of Education Week as Economic Stimulus: Questions—and Answers


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