Special Report

Pots of Education Stimulus Cash May be Found in Unlikely Spots

By Michele McNeil — March 10, 2009 4 min read
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Buried within the $787 billion economic-stimulus package are pots of federal money—beyond the $115 billion in direct education aid—that creative district business managers and education advocates think can be tapped to benefit schools.

The American Recovery and Reinvestment Act passed by Congress last month will provide money for community and rural health centers, workforce-training programs, and a tax-credit bonding program that has helped charter schools build or renovate facilities, among other assistance.

Some of that aid is available through programs administered by the U.S. Department of Education. Other money can be obtained through agencies such as the U.S. Department of Agriculture and the U.S. Department of Labor. All of it has the potential to benefit schools, finance officials and advocates say.

Financial Wellspring

In addition to the roughly $115 billion in education aid and $25 billion in school construction bonding wrapped up in the federal economic-stimulus package, states and school districts may be able to tap other pots of money that are more indirectly linked to K-12.


SOURCES: Association of School Business Officials International; National Alliance for Public Charter Schools

Such support would be in addition to the money explicitly set aside for education in the stimulus legislation, which in the next two years will mean extra aid to Title I programs for disadvantaged students, more special education funding, aid for school bonding, higher education assistance, and money for general K-12 budgets.

“People are waiting in line like Baskin-Robbins to collect this money,” said John Musso, the executive director of the Association of School Business Officials International, based in Reston, Va.

His group is trying to get the word out to school districts nationwide to think creatively about what could be a once-in-a-lifetime infusion of extra federal funding, and to seek money outside the typical sources of K-12 funding.

Workforce Training

Take the $3.95 billion in workforce-training dollars that will be administered by the Labor Department—$500 million of it set aside for adult employment and training, which school districts could use for adult education programs.

What’s more, $1.2 billion of those workforce-investment funds are reserved for youth activities, including summer jobs. Districts could use that money to help provide summer training opportunities or career exploration.

“I’ve got schools everywhere who are always interested in programs over the summer,” Mr. Musso said. “This is for districts that can really quickly put some money to use.”

According to the legislation, that $1.2 billion pot of money also would encompass year-round youth activities, especially for young people who have been “disengaged” from education or the labor market. That could mean new or expanded programs for high school dropouts, or unemployed recent graduates.

And $50 million of the workforce-training money is set aside for YouthBuild, a program in which low-income, at-risk youths work toward their high school diplomas or General Educational Development credentials while building or renovating affordable housing in poor communities. The program has garnered $700 million in federal funding since 1994, and has programs in 226 communities.

Given the importance of spending the stimulus money quickly, Alisha Hyslop of the Association for Career and Technical Education predicts that districts with programs already up and running—such as those with YouthBuild—will reap the biggest benefits.

“If schools were already utilizing this money, then they’ll be in a prime position to get more,” said Ms. Hyslop, the assistant director for public policy for the Alexandria, Va.-based group.

She also pointed out that the stimulus measure includes money for energy-related programs, which districts might be able to obtain if they are able to turn it into career-preparation programs in energy fields. For example, $500 million of the larger pot of workforce-investment money is set aside for programs that prepare people for jobs in energy efficiency and renewable energy.

In addition, a new “recovery zone” bonding program will provide $25 billion through 2010 to states based on their share of job losses. States can choose to use the bonds on infrastructure, job training, and education in areas with significant poverty, unemployment, or home foreclosures.

Health Centers, Charters

Some districts that offer social services such as health clinics may also be eyeing $500 million set aside for community health centers.

According to the latest count, done in the 2004-05 school year by the National Assembly of School-Based Health Care, about 17 percent of school-based health centers nationwide are sponsored by community health centers.

Divya Mohan Little, the group’s spokeswoman, said her organization hopes that school-based health centers will be eligible for the additional dollars. But, like most advocates in the field, her members are waiting for guidance from federal agencies on how exactly the funding will work.

Another source of money under the American Recovery and Reinvestment Act may benefit charter schools, which unsuccessfully fought during congressional negotiations for a line item in the stimulus measure to help them pay for facilities.

The measure expands the New Markets Tax Credit program, which benefits those who donate to federally designated “community-development entities” that make investments in low-income communities. Charter schools have been one of the beneficiaries of that bonding program, since it’s geared to entities that do not have their own taxing or bonding authority.

The stimulus package raised the amount of New Markets Tax Credits to a total of $5 billion a year in both 2008 and 2009, an increase of $1.5 billion each year. The 2008 increase would allow those entities that turned in applications last calendar year, but were turned down, to potentially share in the bigger pot.

“Charters have taken advantage of that program in the past,” said Brooks Garber, the federal-policy director for the Washington-based National Alliance for Public Charter Schools. “For the facilities challenge, charters typically have to cobble together a number of different things to get a facility financed, so we try to get as many tools out there as possible.”

A version of this article appeared in the March 11, 2009 edition of Education Week as Pots of Education Stimulus Cash May be Found in Unlikely Spots


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