Educational Provisions of the American Recovery and Reinvestment Act

The American Recovery and Reinvestment Act (ARRA), also known as the stimulus package, is described as having four purposes: (1) To preserve and create jobs and promote economic recovery; (2) To assist those most impacted by the recession; (3) To provide investments needed to increase economic efficiency by spurring technological advances in science and health; (4) To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits; (5) To stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases.

Under “General Principles” for the use of ARRA funds, the law states: “The President and the heads of Federal departments and agencies shall manage and expend the funds made available in this Act so as to achieve the purposes specified in subsection (a) [described above], including commencing expenditures and activities as quickly as possible consistent with prudent management.”

While the ARRA provides broad latitude to heads of federal agencies, the emphasis on using ARRA funds to compel educators and state and local authorities to adopt the Obama administration’s agenda for education goes beyond what explicitly appears in the ARRA legislation and is possibly contrary to the explicit purpose of the law, that is, to stimulate the economy.

Approximately $100 billion of the stimulus package’s $787 billion is devoted to education programs. While the Association for Supervision and Curriculum Development (ASCD), the national-level association for K-12 educational administrators, recognizes that the ARRA is aimed at “stimulating” the economy and “helping states address their deficits (of which education is one of the largest state expenditures) and forestalling teacher layoffs at the local level,” it also emphasizes another feature of the stimulus. In the ASCD brief entitled “Eligible Education Activities for Funding,” the association observes that, “Education Secretary Arne Duncan has, however, signaled a third priority for this unprecedented federal infusion of education funding: reform.” Duncan demands the funds be used for activities he determines “promote student achievement.”

The one-time nature of the stimulus funding (all of it is to be spent by September 2011 at the latest) encourages expenditures on activities that do not result in ongoing or recurring expenses beyond that date, after which districts will be solely responsible for the costs. Neither the law nor federal policy regarding the disbursement of funds addresses how meeting a main stated objective — forestalling teacher layoffs for example — will not result in “recurring expenditure.” In the words of the ASCD, the Department of Education dictates funds be used to “elevate the quality of the teaching profession by using a significant amount of the stimulus funds for professional development activities.” These activities, it should be noted, will have little impact on “stimulating the economy” although they will serve to enrich for-profit providers of professional development services (the value of which has long been questioned by educators), especially those “approved” by the U.S. Department of Education or state agencies.

Major Areas of Education Funding Within the Stimulus

Most of the nearly $100 billion for education activities will be delivered to states and districts through one of four distinct mechanisms: through the existing Title I and Individuals with Disabilities Education Act (IDEA) formulae, the state’s primary K-12 funding formula, and competitive grants under the auspices of the Secretary of Education. Both the $5 billion in competitive grants (“Race to the Top” funds) and the more than $50 billion in state fiscal stabilization funds (the largest portion of the ARRA money targeted to education) require application (from school districts and state governors, in the case of stabilization funds), with funds released to each state and district on the condition that the Secretary of Education judges their efforts to be in compliance with President Obama’s vision for education “reform.”

Title I, Part A—$10 billion

Title I is prominent feature of federal K-12 education funding. According to the ASCD: “The $10 billion of stimulus funds earmarked for Title I over the next two years are in addition to the regular appropriation for fiscal year 2009 of $14.5 billion.” Half of this money is being made available immediately (April, 2009), with the other half to be dispursed during the summer and fall of 2009, pending Secretary Duncan’s approval of state spending plans, record keeping and reporting. In addition, 95 percent of these funds must be allocated to districts for “school improvement” activities such as professional development as well as extension of the school day and school year.

In visits to numerous states, Duncan has suggested that states and districts that adopt governance mechanisms that eliminate unions (such as Colorado’s “Innovation Schools Act” providing waivers from collective bargaining agreements) and reduce or eliminate public control of school districts (such Secretary Ducan’s call for mayoral control of urban school districts) will be more likely to receive more ARRA funds than states that are less aggressive in adopting such measures.

Duncan’s model of education, as evidenced in his support of KIPP charter schools and similar charter programs across the U.S. that effectively ban teachers unions, require teachers “who are willing or able to work long hours for low pay” according to an article in Slate magazine. These schools run 10 hour programs during the week, half day programs every other Saturday, and require teachers to be available for hours in the evening for assistance with homework. Not surprisingly, these schools have high rates of teacher turnover, and despite monopoly media reports, do not perform better on state tests.

Title I School Improvement Grants—$3 billion

The School Improvement Grant subprogram under Title I funds “turnaround activities” at schools identified as “in need of improvement” based on the arbitrary testing requirements of the No Child Left Behind Act (NCLB). Since 2004, under former Chicago School Chief Executive Officer Arne Duncan, many neighborhood schools in African American and Latino communities have been closed despite public opposition. These schools were subsequently either turned into selective enrollment schools for the wealthy or over to outside “turnaround” specialists leading to corporate charter status. Closing “low performing” schools has been described by Department of Education officials as a key part of “school improvement grants” issued under ARRA.

IDEA Part B— $11.3 billion

Federal funding through IDEA helps “defray the additional costs of states and districts associated with educating students with disabilities” according to the ACSD. The stimulus funding of $11.3 billion essentially doubles the $11.5 billion for IDEA state grants in the fiscal year 2009 appropriation. “Additionally, the stimulus provides $400 million for the IDEA preschool program and $500 million for the IDEA infants and toddlers program.” As with Title I funds, half of this money is being made available immediately. In order to receive the remaining Part B recovery funds, a state must submit, for review and approval by the Department of Educaiton, an amendment to its fiscal year 2009 application to address the recordkeeping and reporting requirements under the ARRA.

Aside from the potential uses of IDEA stimulus dollars below, it is important to note that under the existing IDEA rules, local districts can reduce their state and local expenditures by up to 50 percent of any federal increase received under the normal IDEA appropriation and apply it to ESEA activities. The U.S. Department of Education is encouraging districts to take “advantage of this flexibility to focus the freed-up local funds on one-time expenditures such as the equitable distribution of effective teachers and the quality of assessments.” The move encourages state reliance on federal funding and thus increased federal executive control over state education systems.

State Fiscal Stabilization Fund for Education—$39.8 billion

$48.3 billion is earmarked for state use under the State Fiscal Stabilization Fund and is allocated to states by formula: 61 percent on the basis of relative population of 5–24-year-olds and 39 percent on the basis of the relative share of the total population. The money is divided into two pots for use within states. The largest pot, $39.8 billion, must be used to restore (in equal proportions) both a state’s K-12 and higher education funding to either fiscal year 2008 or fiscal year 2009 levels, whichever is higher. States must distribute these funds to local districts based on the state’s primary education funding formula. If any funds remain after K-12 funding restoration, such a surplus will be distributed to districts on the basis of the Title I formula (but is not required to be used for Title I activities).

This method does not take into account actual state and district financial needs, serving to exacerbate inequalities between states and regions. For example, states such as Texas, Alaska and Wyoming have not cut K-12 funding, yet they will nonetheless receive stimulus funds aimed at restoring educational funding. Rural districts will receive relatively little ARRA funds as a result of this calculation. States such as California and Florida will not receive enough funds under this formula to achieve the stated aim of “restoring funding” to previous levels.

The second pot, the remaining $8.5 billion, is to be used for “public safety” and other government operations and may include K-12 services (or the renovation/repair of school facilities—but not new building construction). At the district level, there are specific provisions related to the use of education funds, which can be used for any activities under No Child Left Behind, IDEA, the Adult and Family Literacy Act, or the Carl. D. Perkins Career and Technical Education Act (Perkins Act).

To receive the initial 67 percent of the State’s allocation under the State Fiscal Stabilization Fund, a Governor must submit to the Department of Education an application that includes assurances that the State will commit to advancing education reform in four specific areas:

(1) Achieving equity in teacher distribution;
(2) Improving collection and use of data;
(3) Enhancing the quality of standards and assessments; and
(4) Supporting struggling schools.

Secretary’s Innovation Fund—$5 billion

The most direct and obvious stimulus investment in education reform is a $5 billion fund overseen by the Secretary of Education to promote his four reform priorities. The “Race to the Top Fund” is $4.35 billion worth of competitive grants to states “making the most progress” in reform as determined by the Secretary.

The Investing in What Works and Innovation Fund is $650 million in competitive grants to Local Education Authorities (LEAs) and nonprofits that “have made significant gains in closing achievement gaps and are models of best practices. Because the grants are awarded on a competitive basis and are also somewhat contingent on state and district use of other stimulus funds, the government will award these grants last. The 2010 awards will be made in two rounds, first in late fall 2009 and then again in summer of 2010,” according to the ASCD.

Education Technology State Grants— $650 million

The stimulus plan provides $650 million for the Enhancing Education Through Technology (EETT, or E2T2) state grant program beyond the fiscal year 2009 appropriation of $270 million. The program helps districts utilize technology to improve teaching and learning to increase student achievement and technological literacy. States must use 25 percent of stimulus funds distributed under this program for professional development.

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