The American Recovery and Reinvestment Act (HR 1): What’s In It? What’s Next? Prepared by: Campaigns & Elections, Education Policy and Practice, Government Relations, and Public Relations

2  Signed ARRA into law on February 17.  President Van Roekel and CEA President Bev Ingle at bill signing.  “Because we know America can’t outcompete the world tomorrow if our children are being outeducated today, we are making the largest investment in education in our nation’s history. It’s an investment that will create jobs building 21st century classrooms, libraries, and labs for millions of children across America. It will provide funds to train a new generation of math and science teachers, while giving aid to states and school districts to stop teachers from being laid off and education programs from being cut.”

 Overall package = $787 billion  Spending totals = $575 billion  Tax cuts = $212 billion 3 Overall Funding Totals

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 New White House Website:  White House Fact Sheets: ◦ Education: _Education_2-17.pdf ◦ Employment Numbers By State: _state-by-state_jobs_2-131.pdf  USED state funding tables: 9arrastatetables.pdf 6 Hot New Information!

 Education and related programs (including tax credit bonds) = $ billion  U.S. Department of Education discretionary funding = $96.76 billion ◦ Current funding = $59.18 billion ◦ ARRA increase = 164%!  NEA national, state, and CD funding tables available at: 7

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 “In the coming days, the Department of Education will post specific guidelines and a timetable for each funding stream included in the Act.”  “Our goal is to get half of the money to the states within 40 days and the second half within six months, conditioned upon receipt of a comprehensive reform plan.” 9

 Funds for current programs generally available for school years and  “…in order to begin expenditures and activities under this Act as quickly as possible consistent with prudent management, the Secretary of Education may- ◦ (1) award fiscal year 2009 funds to States and local educational agencies on the basis of eligibility determinations made for the award of fiscal year 2008 funds; and ◦ (2) require States to make prompt allocations to local educational agencies.” 10

 If funds evenly split between two years, federal spending on K-12 education will increase from 9% share to between 14.8% and 15.5%  ECS estimates ARRA will provide an average additional $ per student nationally per year for the next two years  ECS estimates ARRA will create or save 267,355 teaching positions and an additional 40,000 instructional staff this year 11 Education Funding Totals

Funding Totals: ESEA  Title I Grants to LEAs = $10 billion (+72%) ◦ “Conferees expect States to use some of the funding provided for early childhood programs…”  School Improvement Grants = $3 billion (+611%) ◦ Grants to LEAs with schools in school improvement, corrective action, restructuring ◦ Funds per school = $50,000 - $500,000 ◦ SEA allocates 95% of funds to LEAs ◦ Conferees “direct the Department to encourage States” to use 40 percent of funds for middle and high schools 12

13  NCLB requires that LEAs with any school “in need of improvement” must spend an amount equal to 20% of their Title I allocation.  $10 billion increase = $2 billion MORE for SES and choice.  Secretary probably has authority to waive this based on general NCLB waiver authority.

 Education Technology State Grants = $650 million (+243%)  Teacher Incentive Fund = $200 million (+206%) ◦ Unclear if funds will go to current 34 grantees or new awards ◦ Requires “the Institute for Education Sciences to conduct a rigorous national evaluation of TIF to assess the impact of performance-based teacher and principal compensation systems” 14

 State Data Systems = $250 million  Impact Aid school construction = $100 million  Education for homeless children = $70 million (+109%) 15

16  Maintenance of Effort (MoE) requires that a school district’s education expenditures for the prior year must be at least 90% of the 2 nd previous year amounts.  Secretary of Education may waive MoE requirement if there is: an exceptional or uncontrollable circumstance, such as a natural disaster, or there’s a precipitous decline in resources in that school district.  Federal funds may not count toward MoE, except for state stabilization funds.

17  A State educational agency or local educational agency shall use Federal funds received under [Title I] only to supplement the funds that would, in the absence of such Federal funds, be made available from non- Federal sources for the education of pupils participating in programs assisted under [Title I], and not to supplant such funds.

18  Violation presumed if the SEA or LEA used Federal funds to provide services that the SEA or LEA provided with non-Federal funds in the prior year.  Rebuttable if the SEA or LEA can demonstrate that it would not have provided the services in question with non-Federal funds had the Federal funds not been available.

Funding Totals: IDEA  IDEA = $12.2 billion ◦ Part B Grants to States = $11.3 billion (+104%)  Assuming funds split between and school years, federal share of special ed funding will be 25% in and 24% in ◦ Part B Preschool Grants = $400 million (+107%) ◦ Part C Infants and Families = $500 million (+115%) ◦ School districts can reduce amount of local funds for special education by 50% of any increase in federal funds; local funds can be spent for any purpose under ESEA 19

 Pell Grants = $15.64 billion ◦ With mandatory funding increase, maximum award will increase by $500 to $5,350.  College Work-Study = $200 million  Higher Education Teacher Quality = $100 million (+297%) ◦ New HEA focuses these funds on teacher residency programs 20

 New school modernization tax credit bonds ◦ $22 billion ($11 billion for each of 2009 and 2010) ◦ 60% allocated to States based on share of Title I funding ◦ 40% allocated directly to “large” LEAS  100 LEAs with largest number of children from families in poverty  Up to additional 25 LEAs selected by Secretary of Education ◦ May be used for new construction, repairs, modernization ◦ Federal government pays interest via tax credits = $9.9 billion ◦ Funds must be spent within 3 years of issuance of bond 21 School Construction

 Qualified Zone Academy Bonds (QZABs) ◦ $1.4 billion for 2009 (current amount is $400 million) ◦ $1.4 billion for 2010 ◦ Federal cost = $1 billion  Separate spending program for construction was not included in final package 22

23  Head Start = $1 billion  Early Head Start = $1.1 billion  Child care Development Block Grant = $2 billion ◦ $255 million to improve quality of programs

24  National Science Foundation = $3 billion ◦ Includes $100 million for math/science education, scholarships  National School Lunch Program = $100 million ◦ For needed equipment  Bureau of Indian Affairs = $500 million ◦ For infrastructure including BIA schools

25  Increased federal share of Medicaid spending = $86.6 billion. ◦ Available immediately and through 12/31/2010.  COBRA: new 65% federal subsidy for health insurance premiums--up to nine months for workers and their families laid off between Sept. 1, 2008 and Dec. 31, 2009 ($24.7 billion)

26  Extends until July 1, 2009 moratorium on HHS regulation limiting school-based Medicaid reimbursements for transportation to school for children with disabilities ◦ Regulation would reduce Medicaid reimbursements to schools by $635 million per year

 “ Making Work Pay” refundable tax credit ◦ $400 per person; $800 per family for 2009 and 2010 ($116.2 billion)  “American Opportunity” higher education tax credit ◦ For 2009 and covers 100% of first $2000 in college costs; 25% of next $2000; $2500 maximum credit ($13.9 billion) ◦ Costs now includes books  $250 one-time 2009 payment for retirees ($14.2 billion) ◦ Thanks to NEA, includes state and local employees not eligible for Social Security ($218 million) 27

 State Fiscal Stabilization Fund - flexible funding through existing state education formulas (NEA Proposal) = $53.6 billion ◦ $39.5 billion for general fiscal relief for public school districts and public institutions of higher education 28

◦ $8.8 billion for Governors "...for public safety and other government services, which may include assistance for elementary and secondary education and public institutions of higher education and for modernization, renovation, or repair of public school facilities and institutions of higher education facilities…” ◦ $4.35 billion for State Incentive Grants ◦ $650 million for Innovation Fund 29

 Funds to be allocated to States (Governors) ◦ Change in general federal education policy: Currently federal funds go to State Education Departments, not Governors  State allocations: 61% based on share of population aged 5-24 and 39% based on share of overall population 30

31  Funds available upon enactment and for obligation through end of FY 2010 (September 30, 2010)  No later than 45 days after enactment (April 1, 2009), Governor must certify state will request and use funds  If Governor fails to request funds, state legislature can do so by adopting a resolution

 State must maintain spending for each of Fiscal Years 2009, 2010, and 2011 at least at FY 06 level  Secretary of Education may waive or modify requirement for each of those years  Fiscal years are as defined by state law 32

 Primary use of $39.5 billion education fund: ◦ Distribute funds through existing state funding formulas to restore school district and public college budgets in FY 2009, 2010, and 2011, to the level of State support to the greater of FY 2008 or FY 2009 levels, and ◦ Where applicable, allow implementation of existing formula increases for elementary and secondary education for FY 2010 and 2011, and funding for phasing in State equity and adequacy adjustments, if enacted pursuant to State law prior to 10/1/08. 33

 If funds insufficient to meet above then Governor allocates funds to K-12 and higher ed in “proportion to the relative shortfall in State support for each sector” 34

 Any remaining funds to be distributed to LEAs via Title I formula  With approval by Secretary, funds may be used by State or LEA to meet maintenance of effort requirements under IDEA, ESEA, other programs  Funds may not be used to provide financial assistance to students to attend private elementary or secondary schools 35

 Funds received by LEAs can be spent for any purpose allowable under ESEA, IDEA, the Adult and Family Literacy Act, the Perkins Career and Technical Education Act, or for modernization, renovation or repair of public school facilities  Institutions of higher education can use funds for education and general expenditures, to mitigate the need to raise tuition and fees, and for modernization, renovation or repair of facilities 36

 States must meet assurances to get funds: ◦ Address inequities in teacher distribution (already required by NCLB) ◦ Establish statewide longitudinal data system including teacher identifiers (new requirement) ◦ Improve quality of NCLB academic assessments (already required by NCLB) 37

◦ Improve State academic content standards and student academic achievement standards so students exit high-school ready for college, the 21 st century workforce, and the Armed Forces without remediation (new requirement) ◦ Comply with corrective action and school restructuring provisions of AYP (already required by NCLB) 38

 $4.35 billion in FY 2010 to States that have made significant progress on assurances  Secretary Duncan decides who gets grants  State must distribute at least 50% to LEAs based on Title I formula  States can use funds to improve student academic achievement  Must include plan for evaluating State's progress in closing achievement gaps 39

 Secretary Duncan: "This represents a once-in- a-life-time opportunity to do something dramatically better…“  Duncan calls this the “Race to the Top Fund”  In awarding funds Duncan says he would consider state standards, assessments, and teacher recruitment and retention  “We really have a chance to drive dramatic changes, to take to scale what works, invest in what works.” 40

 $ 650 million for Innovation Fund  Secretary gives awards to LEAs or partnership of nonprofit organization and either one or more LEAs or a consortium of schools that have made significant gains in closing achievement gap  Funds to be used to: ◦ Expand work and serve as models for best practices ◦ Allow partnerships with the private sector & philanthropic community ◦ Identify and document best practices 41 Innovation Fund

42  Eligibility based on: ◦ Significantly closing achievement gaps ◦ Exceeding AYP thresholds for 2 or more consecutive years ◦ Significant improvement in other areas, such as graduation rates or increased recruitment and placement of high-quality teachers and school leaders ◦ Established partnerships with private sector -- may include philanthropic organizations -- and private sector will provide matching funds to help bring results to scale

43  States receiving Stabilization funds must submit annual report to the Secretary describing: ◦ Uses of funds provided within State; ◦ Distribution of funds received ◦ Number of jobs saved or created ◦ Tax increases averted ◦ Progress in reducing inequities in distribution of highly- qualified teachers, developing longitudinal data system, and implementing valid assessments ◦ Actions taken to limit tuition and fee increases at public institutions of higher education ◦ Extent to which public institutions of higher education maintained, increased, or decreased enrollments of in- State students

44  By March 6, Congress must finish FY09 education appropriations bill  February 26, President Obama releases outline of FY10 budget – details in April ◦ Will there be increases for programs not included in stimulus? (English Language Acquisition State grants, after school, Teacher Quality State grants, Safe and Drug-Free Schools, etc.)  February 2010 – President releases FY 2011 budget ◦ Will increases for Title I, IDEA, Pell, Head Start be sustained?