U.S. Department of Education American Recovery and ...

U.S. Department of Education American Recovery and Reinvestment Act

Report: Summary of Programs and State-by-State Data

November 2, 2009

1

Table of Contents

I. Introduction II. National Overview III. State Profiles IV. Reports by Program V. ARRA Reform and Outreach VI. Conclusion VII. Appendices

Appendix 1: ARRA Recipient Reporting Process Appendix 2: FY `09 and FY `10 State Education Budgets; Impact of State Fiscal

Stabilization Fund on K-12 and Higher Education Shortfalls

2

I. Introduction

The American Recovery and Reinvestment Act of 2009 (ARRA, Recovery Act) provided approximately $100 billion to the U.S. Department of Education (Department) with the initial goal of delivering emergency education funding to States. Soon after President Obama signed ARRA into law on February 17th, 2009, the Department acted swiftly to provide a large portion of these grants to States in response to drastic budget shortfalls. Over $67 billion in formula grants were awarded as of September 30th, 2009.

As shown in the table below, the largest portion of ARRA funds, $35.4 billion was delivered through the State Fiscal Stabilization Fund (SFSF). In addition, $23.4 billion in ARRA funding was added to Title I, IDEA, and other formula grant programs, and $8.7 billion was allocated for Student Financial Assistance (Pell Grants and Federal Work Study).

Table 1: ARRA Funding Summary

($ billions)

State Fiscal Stabilization Fund Student Financial Assistance IDEA Title I Additional Formula Grants Discretionary Grants Total

Total

Obligated as Percent Remaining Percent

Appropriation of 9/30/09 Obligated Funds Remaining

$48.6

$35.4

73%

$13.2

27%

$16.5

$8.7

53%

$7.8

47%

$12.2

$12.2

100%

$0.0

0%

$10.0

$9.9

99%

$0.1

1%

$4.4

$1.3

30%

$3.1

70%

$5.7

$0.0

0%

$5.7

100%

$97.4

$67.6

69%

$29.8

31%

As part of the unprecedented transparency requirements of ARRA, the first quarterly public accounting of all expenditures to date was posted by the Recovery, Accountability, and Transparency Board on October 30th, 2009. The data, now available on , indicate that approximately 400,000 jobs have been retained or created through the U.S. Department of Education ARRA grants. They reveal that the rapid distribution of this funding allowed States to fill significant education budget gaps in order to avert layoffs of personnel in public school districts and universities across the nation. Of the reported jobs, 325,000 are specifically education jobs, with the remaining portion attributable to more general public service positions.

A few examples of reported ARRA job numbers from states that faced catastrophic budget shortfalls prior to the infusion of these funds include: 7,849 jobs in Arizona; 80,363 jobs in California; 19,553 jobs in Florida; 16,914 jobs in New Jersey; 6,173 jobs in Oregon; and 6,320 jobs in Wisconsin.

3

II. National Overview

Filling State Education Budget Shortfalls

State and local governments typically provide over 90 percent of the funding for elementary and secondary education in the United States, and about 40 percent of the funding for public institutions of higher education. During the 2007-08 school year, States alone contributed over $300 billion of funding for education nationwide, which represents approximately 46 percent of K-12 revenues and 36 percent of public higher education revenues ().

As the economy slowed in 2008, State revenues declined dramatically and many were unable to fully fund their planned and approved education budgets for the 2008-09 school year. State budgets are a lagging indicator of economic conditions and almost all states found that their projected revenues were insufficient to fund their 2009-10 education plans. In applying for SFSF grants states identified FY 2009 and FY 2010 education budget shortfalls totaling over $33 billion.1

In the face of this economic crisis, ARRA provided a total of $48.6 billion for the State Fiscal Stabilization Fund (SFSF), to be administered by the Department of Education to help sustain and create jobs and advance education reforms. As part of SFSF, $39.5 billion is dedicated to public elementary, secondary, and higher education, and, as applicable, early childhood education programs and services; $8.8 billion is available to support a broader scope of activities, which may include education, public safety, or other government services. To date, $35.4 billion of the SFSF allotment has been obligated by the Department of Education to states and $13.2 billion is expected to be obligated in the coming months.

SFSF funds were able to restore nearly 100 percent of the 2008-09 budget gaps and a significant portion of the 2009-10 shortfalls. Based on state applications for SFSF:

Thirty-one states reported using SFSF to fill emergency shortfalls for FY 2009 (the 2008-09 school year) totaling $13.1 billion.

Forty-eight states reported using SFSF to fill anticipated shortfalls for FY 2010 (the current 2009-10 school year) totaling $20.3 billion.

During the 2008-09 school year, ARRA restored significant shares of K-12 education funding in the states. The ARRA restored 9% of K-12 education funding in California, Indiana, Alabama and Oregon; 12% of such funding in Florida, Wisconsin and South Carolina; and 23% of K-12 education funding in Illinois (see Appendix 2)

A summary of State funding for K-12 and higher education for the two previous and current school years, and the contributions of SFSF funds in restoring shortfalls, can be found in Appendix 2. This information is also available in the section of this report on individual States.

In addition, ARRA funds were used to mitigate tuition increases at public universities in at least 24 states. For example, the University of Massachusetts was able to rebate a $1500 fee increase and instead employ the standard annual increase to cover the cost of inflation. At the University of Minnesota, an expected tuition increase was cut by about half. The Minnesota State College and University System, which includes the states community colleges, reduced a planned tuition increase from 5% to 2%. In Virginia, ARRA funds kept tuition increases to the lowest rate since 2002. This information was obtained from the public websites of Institutions of Higher Education (IHEs), statewide higher education coordinating agencies, and media reports.

Employment Outcomes of ARRA

Jobs created under ARRA grants administered by the Department of Education include both education and non-education jobs. At present, the Section 1512 reporting procedure does not provide a mechanism for specifically identifying job categories such as

1 State SFSF applications:

4

teachers. Neither are states required to distinguish between jobs saved or created. Instead, recipients are asked to provide a narrative describing the types of jobs supported by ARRA funds. These are included in the state profiles of this report. The following methodology was established by the Department for states to use in estimating the number of jobs by sector:

All jobs identified with funding under Title I, Individuals with Disabilities Education Act, State Fiscal Stabilization Fund/Education Grants, Education Technology, Homeless Youth, Vocational Rehabilitation, and Independent Living grants are classified as Education jobs, which may include administration and support in addition to teaching jobs. These grants are designated by statute to support uses of funds limited to education, and a review of the jobs narratives provided by states consistently identifies jobs created for teachers, principals and other administrators, instructional assistants, bus drivers, guidance counselors, librarians, school nurses, and information technology experts.

All jobs identified with State Fiscal Stabilization Fund/Government Services, Impact Aid Construction, and Federal Work Study are considered other jobs. A line-by-line review of State Fiscal Stabilization Fund/Government Services provides more insight into the nature of jobs created/retained under that grant; the largest category appears to be Public Safety. Impact Aid Construction jobs are most likely jobs in the construction industry given the purpose of the grant.

The States` October 30th ARRA Section 1512 Quarterly Reports indicate that 325,000 education jobs have been retained or created through ARRA education grants. These jobs include positions for teachers, principals, and support staff in elementary and secondary schools, and educational, administrative, and support personnel in institutions of higher education. In addition, approximately 73,000 other jobs (including both education and non-education positions) were saved or created from the SFSF Government Services Fund, Federal Work Study, and Impact Aid fund. Thus, the total number of jobs supported by the Department`s ARRA grants is close to 400,000.

On a program-by-program basis, the SFSF has had the greatest jobs impact to date, in keeping with its objective of providing flexible emergency relief to states to address budget shortfalls. The bulk of job savings or creation from this grant has already been identified in most states, with possible increases in the coming quarters in the few states yet to report jobs created or retained from SFSF.

The ARRA Title I and IDEA programs also demonstrate significant impacts on employment, though the numbers to date vary markedly by state as local programs using these dollars are developed and implemented for high-poverty schools or students with disabilities. Unlike funds provided under SFSF, which were used as emergency dollars aimed at supporting jobs and helping our weak economy, ARRA funds for Title I and IDEA programs must be used in a targeted fashion as the laws require. School districts have, in most cases, started planning, hiring, and making purchases with these funds but the reporting will show up in the subsequent quarter. Employment numbers for Title I and IDEA, along with smaller Department formula grant programs, are likely to grow as programming accelerates.

Finally, the Federal Work Study program reports over 8,000 full-time equivalent student work-study jobs, providing a needed education financing supplement during a period of reduced income for many students.

Summary of Department of Education Recipient-Reported Data

Below is a chart that summarizes the information submitted by recipients of U.S. Department of Education ARRA grants as required by Congress in Section 1512 of ARRA. Descriptions of the categories in this chart are as follows:

Award Amount = Amount of Recovery Act Funds awarded from the U.S. Department of Education to the State Funds Received = Amount of Recovery Act Funding actually received by the State from the U.S. Department of

Education through draw-downs, reimbursements, or invoices Expenditure = Amount of Recovery Act funding actually paid out by the State for projects, jobs, activities, etc. Number of Jobs = full-time equivalent jobs saved or created due to ARRA funding; for additional details regarding the

ARRA jobs calculation process see the Appendix of this report or go to .

5

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download