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Education Funding

Stimulus Details: States Must Share with Higher Ed

By Michele McNeil — February 12, 2009 1 min read
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When it comes to the stimulus package, the devil’s in the details. And we have some important details from House Democratic aides.

The $39.5 billion in the state fiscal stabilization fund for schools must first be used by states to backfill any cuts they have made to both K-12 and higher education, up to fiscal 2008 or 2009 levels. If a state doesn’t have enough money to make K-12 and higher ed whole, then the money must be spread proportionally between the two. Money will flow to states based on the state’s population, ages 5-24. Any leftover money after backfilling cuts will flow to K-12 districts based on existing Title I formulas and can be used for a host of things, including school modernization. New construction is not envisioned. House aides say it’s hoped the money will go out before July 1.

States also must put in their own money (called maintenance-of-effort) to fund schools up to fiscal 2006 levels. But states can seek a waiver from the U.S. Department of Education in cases of severe financial hardship.

The $5 billion incentive fund, which will be under the control of education secretary Arne Duncan, will include $650 million for innovation grants to school districts that could serve as models for best practices. The innovation money will go to local districts, nonprofits, or consortia of school districts. The rest of the $5 billion incentive fund will go to states to fund projects such as improving assessments and equitable teacher distribution.

In all, the department will have a whopping $95 billion over two years to dole out once Title I, special education, teacher grants, higher education and other funding is factored in.

UPDATE:Check out the final bill at the House Appropriations Committee’s Web site here.

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