Education Stimulus

Schools, colleges, and universities are poised to receive billions of dollars in additional federal funding from the proposed stimulus packages put forth by both Congressional chambers over the past few weeks.

But such substantial federal education investment must walk a fine line. On one hand, these funds should provide much-needed support for states, institutions of higher education, and school districts that are struggling to meet massive budget deficits. But the money should not completely supplant local funding.  States must guarantee that the new federal dollars will improve education or infrastructure investment, not maintain the status quo.

To correct for this, both the House of Representatives and Senate versions of the stimulus bill contain a separate fund that let states supplant some of their local assistance with federal dollars, ensuring spending increases or new programs included elsewhere in the legislation will supplement existing budgets.

On Wednesday the House passed its version of the stimulus bill and the Senate reported from committee the text of its version.  Both bills dedicate more than $140 billion to education programming including Title I, IDEA, and school construction.  While each version provides similar funding for most programs, the House passed version includes funding for a number of smaller initiatives that the Senate bill does not.

The House and the Senate fund Title I and IDEA at similar amounts.  They also allocate the same amount for the State Fiscal Stabilization fund which includes the State Incentive Grants and the Innovation Fund. 

Yesterday we took a look at total stimulus funding per student as estimated by the House Education and Labor Committee's stimulus allocation data.  Today, we will take a closer look at the estimated 2009 Title I funding distributions per poor student in each state and the District of Columbia (Puerto Rico is not included in Census estimates).  Title I stimulus distribution is expected to be the same in 2009 and 2010.  To the untrained eye, Title I stimulus funding appears to be allocated randomly, with little connection to student poverty levels.

According to the House stimulus bill, distribution of stimulus Title I funds will be channeled through two Title I funding formulas: 50 percent through Targeted Grants and 50 percent through Education Finance Incentive Grants (EFIGs).  Both of these formulas target funds based on the number of poor students in a state or district as measured by the census.  We used 2007 census data for our analysis.

Since the release of the House Stimulus bill more than a week ago, education stakeholders have come alive with speculation about the distribution of funds.  Today, the Education and Labor Committee released Congressional Research Service (CRS) estimated stimulus allocations to local education agencies (LEAs).  The estimates include 2009 and 2010 allocations for Title I, IDEA, school construction, and total stimulus spending, all of which are based on FY 2008 Title I allocations.  In an effort to make this information as accessible as possible, we turned the CRS data into an excel spreadsheet and performed a few analyses using our Federal Education Budget Project (FEBP) data.

The average stimulus allocation per district can be found in the table below.

Our first analysis examined the stimulus allocation by state including the District of Columbia and Puerto Rico.  We summed all of the district allocations at the state level for both 2009 and 2010 and merged in select data from the FEBP database including total students, free and reduced priced lunch participation, special education participation, and Title I and IDEA allocations for FY 2008. 

After weeks of speculation about education's place in the stimulus bill, details are finally emerging.  Today, the House Committee on Appropriations released a summary of the "American Recovery and Reinvestment Act of 2009." As expected, it includes funding for school modernization, aid to states for K-12 education, and a number of other programs from early childhood to higher education. It also includes an increase in the maximum Pell Grant.

Overall the proposed stimulus bill includes $550 billion for targeted programs and $275 billion in tax cuts.  We calculate that of the total $825 billion in the stimulus bill, at least $68 billion is dedicated to education-related programs. While this is a small proportion of the overall total, it is a massive amount of new funding for education.

Here are some of the proposals included in the bill that distribute funds to education over two years.[i]  Appropriations for FY 2008, where available, are provided in parentheses:

21st Century Classrooms