Where to find more money this year

Schools have more than $15 billion in formula-based stimulus funding left to be spent.
Schools have more than $15 billion in formula-based stimulus funding left to be spent.

Although the state budget outlook appears grim for 2010-11, there are a few possible sources of federal money that can help.

One is the remains of the stimulus package. Even though this windfall is running out, there was at least $15 billion in formula-based money left to be spent on education as of press time, according to the U.S. Department of Education (ED). Schools have until Sept. 30, 2011, to spend the rest of the money—and by making smart, one-time investments with the potential to have a lasting impact, schools with unspent funds could use this money to help them ride out the recession.

ED must obligate the remaining stimulus funds by Sept. 30, 2010—including awards for Race to the Top (RTTT), Investing in Innovation (I3), and phase two of the State Fiscal Stabilization Fund (SFSF), said a department spokesman.

Grantees under ED’s formula programs, including SFSF, Title I, and the Individuals with Disabilities Education Act (IDEA), have until Sept. 30, 2011, to make spending commitments with those funds. They will have an additional three months after that deadline to “pay the bills,” provided states have paperwork proving that the expenses are tied to the approved programming, according to ED.

Although schools have slightly more than a year to spend the funds, 57.9 percent of participants in a recent ED webinar said they are at least somewhat worried about spending their district’s stimulus dollars by the deadline. The webinar aimed to help states identify valuable ways to spend their stimulus money.

Stimulus money is still available, but it is finite—so schools must make “smart, sustainable investments,” said Alexa Posny, assistant secretary for special education and rehabilitative services at ED, during the webinar. (For advice on how to spend the money, see “Five ways to make smart ed-tech investments.”)

As of July 7, budget accounts on ED’s Recovery.gov site indicated that states had $7.4 billion left in IDEA funding and about $7.8 billion in Title I funds, including School Improvement Grants. A June 30 ED report showed that, of the $645 million awarded to states for Enhancing Education Through Technology (EETT) stimulus funding, roughly $495 million remained.

That adds up to $15.7 billion in formula-based funding left to be spent. This number doesn’t include unspent SFSF monies, which are intended to help save jobs—the figures for which weren’t available as of press time. It also doesn’t include another $4 billion in competitive grants that ED had not announced as of press time: $3.4 billion in RTTT funding and another $650 million in I3 funds.

Federal officials are hoping that schools see the availability of stimulus funds as a good sign.

“Last year was a challenging one, and the pressure … will continue in 2010 through 2011,” said Cathy Solomon, a special assistant in ED’s Office of the Deputy Secretary, during the department’s webinar. “The good news for 2010 is [that] significant [EETT], Title I, and IDEA funds are still available for use through the school year.”

Another potential source of money is a supplementary spending bill passed by the U.S. House of Representatives on July 1—but as of press time the fate of that bill was very much up in the air.

School districts would get $10 billion in additional funding to help them avoid laying off teachers, and college students would get $5 billion more in Pell Grant money to account for a shortfall in that program, under the bill. But the additional funding would come at a cost to other programs, including $600 million in cuts to broadband stimulus funding and $800 million in cuts to school-reform initiatives.

The changes are part of an $80 billion war spending bill needed to pay for President Obama’s decision to send 30,000 additional U.S. troops to Afghanistan. As of press time, the bill was awaiting action in the Senate, where Senate Republicans were threatening a filibuster because of the non-war additions.

The president has promised to veto the bill over its proposed cuts to his school-reform initiatives, including $100 million in charter school funding, $200 million in Teacher Incentive Fund money, and $500 million from RTTT.

“We do not believe that taking money out of that important investment makes any sense at all,” said Press Secretary Robert Gibbs, referring to RTTT in particular. “The president’s been clear with Congress that that doesn’t make any sense at all.”

The rebuke marks an unusually public clash between the White House and President Obama’s top Democratic allies in the House, including Rep. David Obey, D-Wis., chairman of the House appropriations committee, who introduced the education jobs provision.

The House late last year approved similar legislation to help save education jobs, but it stalled in the Senate.

The National School Boards Association (NSBA) urged Congress to take immediate action on the legislation, which NSBA said would help school districts and states save thousands of jobs that are critical to academic achievement.

“In the face of massive budget shortfalls and layoffs across the country… the Keep Our Educators Working Act would provide funding needed to assist school districts and states as they try to finalize budgets for the next school year,” said Anne Bryant, executive director of NSBA. “… Education Secretary Arne Duncan recently warned that as many as 300,000 education layoffs could occur [this year]. Layoffs of this magnitude would cause additional damage to our fragile economy.”

The Education Commission of the States estimates that at least 300,000 teaching positions could be saved or created for this school year with the proposed funding.

A third potential source of additional funds is the e-Rate, the federal program that provides discounts on telecommunications services to eligible schools and libraries.

A proposal by the Federal Communications Commission (FCC) would adjust the e-Rate for inflation, which would mark the first funding increase for the program since its debut more than a decade ago.

The adjustment would mean that the $2.25 billion-a-year program could increase to $2.55 billion over the next five years.

Some observers note that the 3-percent annual funding increase would produce only $67 million more for 2011—not nearly enough to make up for past years without inflation adjustment.

Still, it’s $67 million more than schools would have had without the FCC’s proposal, which must be formally adopted after the agency reviews comments. And other proposed changes, designed to simplify the application process and extend discounts on internal connections to more schools, could provide relief as well.

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