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Education Funding

Why States Aren’t Rushing to the Stimulus Stabilization Fund

By Michele McNeil — May 27, 2009 1 min read

The U.S. Department of Education has been quietly, and now more openly, grousing about how slow states have been in applying for state stabilization funds under the economic stimulus package. Other folks are taking note and also questioning states’ slow progress.

The deadline for applying for stabilization funds is July 1. So far, 19 states have been approved. At least 30 applications have been received. (UPDATE: That 30 figure includes the 19 applications that have already been approved.)

Well, late last month, the National Governors Association hosted states’ stimulus czars from across the country, and I got to pose this question to a few of them: What’s taking you guys so long? They laughed, as if the federal officials just don’t get it. Here are some of the reasons it’s taking so long, according to these czars:

* Legislative sessions have only recently started wrapping up, and most of those sessions involve budget work and serious discussions about what to do with stimulus money. In fact, the National Conference of State Legislatures session calendar shows that most states didn’t start adjourning until late April or this month. Some go into June. Its hard to fill in budget numbers on the stabilization fund application if the budget isn’t done.

* Governors, who must apply for the funds, have to promise things in these applications, such as making progress on data collection and removing charter caps. Apparently, governors are taking these promises seriously. Plus, governors are responsible for a lot more stimulus funding--education- and non-education-related--than just the stabilization funds.

* While school districts might want the money this very minute, states might not have the same sense of urgency. They probably wouldn’t be applying the stabilization fund money until their fiscal 2010 budgets. Most states’ budget years start July 1. That’s still weeks away.

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