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July 27, 2009

Readers’ Guide to the Education Funding Announcement

"$52 MILLION IN RECOVERY FUNDS NOW AVAILABLE FOR VERMONT TO SAVE JOBS AND DRIVE REFORM," says the headline of today's press release from the Federal Department of Education (www.ed.gov/news/pressreleases/2009/07/07272009.html). "Application for Part 1 of Vermont's State Stabilization Funds Approved Today," the subhead explains.

This is formula money, money we knew we were going to get as long as we filled the form out correctly; still, it's nice to know that we DID fill the form out correctly (you can read it at www.ed.gov/programs/statestabilization/stateapps/vt.pdf). Vermont's method for funding local schools is unique and we had a lingering nervousness that someone somewhere in Washington wouldn't understand and that might cause complications in getting our money.

The $52 million is the first installment of $77 million that Vermont will receive to help with funding of K-12 and public institutions of higher learning over the two year life of the stimulus bill (aka American Reinvestment and Recovery Act or ARRA). Actually, though, we prudently budgeted half of this for each year so won't draw down all that we can from the feds until later. BTW, the rules only allow you to draw down this money immediately prior to sending it to the schools so we can't just get it all and put it in the bank to earn interest.

This money is NOT a windfall to the schools who will receive it (but there is a windfall coming, see below); it is aid to the State so that it doesn't have to either cut its level of support for schools or take money away from somewhere else – that's why it's called "state fiscal stabilization fund". The money will probably make up part of the September money the State sends to school districts, but, other than the new reporting requirements that come with this federal money, that really won't make any difference to the districts. They'll get what they would've gotten anyway.

There are strings besides the reporting requirements. For one thing the State has promised to do no less than level fund the schools at the higher of the 2008 or 2009 levels for 2010, 2011, and 2012. That was part of our application. But note that the stimulus money only lasts two years. Unless the economy has come roaring back by then, we're going to have a hole to fill and cutting aid to the schools, for 2012 at least, won't be an option. It's not clear constitutionally how this binds the future legislature which makes the budget for 2012, but let's not go there now.

Other strings include all kinds of reports and commitments to improving education in ways we've already committed to improving it.

The press release goes on to say "To date, Vermont has received [sic] nearly $46 million in education stimulus funds—representing a combination of funding for Title I, IDEA, Vocational Rehabilitation Grants, Independent Living Grants and Government Services funds. On April 1st, Vermont received [sic] nearly $13 million in Title I funding and more than $14 million in IDEA funding.  This represents 50 percent of the Title I and IDEA funding Vermont is eligible for in total." It is NOT accurate to say Vermont has RECEIVED this money; in fact, we haven't although most has been approved and we can draw it down. Applications are available to schools at http://education.vermont.gov/new/html/dept/recovery_act.html and that page also has links to district-by-district allocations.

The Title I and IDEA funds go to school districts by formula and DO represent a substantial increase over the funding schools usually receive under these programs – but only for two years. So schools are going to have to be very careful not to ratchet up expenses on these programs to a level that will not be sustainable when the ARRA tap is shut.

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