State Fiscal Stabilization Funds
The State Fiscal Stabilization Funds of the American Recovery and Reinvestment Act of 2009 are a one-time appropriation of $53.6 billion. The U.S. Department of Education will award governors approximately $48.6 billion, in exchange for a commitment to advance essential education reforms benefiting students, from early learning through post secondary education. The Louisiana Department of Education will receive $206 million that will be disbursed through the state’s Minimum Foundation Program. The Minimum Foundation Program funds preK-12 education and is given to local school districts through allocations that are based on enrollment and other factors from the state.
The purpose of the funds is to help stabilize state and local government budgets in order to minimize or eliminate reductions in education or other essential public services. The stabilization funds are to help ensure that local school districts and publicly funded institutions of higher education have the resources to help avert budget cuts and to retain teachers and professors. Additionally, the law provides governors with significant resources to support education—including school modernization, renovation and repair, public safety and other government services.
Uses of State Fiscal Stabilization Fund for Education:
- States must use 81.8 percent of stabilization funds for the support of public elementary, secondary, and higher education, and, as applicable, for early childhood education programs and services.
- States must use their allocations to help restore funds for fiscal years 2009, 2010, and 2011 for public elementary, secondary, and postsecondary education with allocations that are greater than the fiscal years 2008 and 2009 funding levels. The funds needed to restore support for elementary and secondary education must be disbursed through the state’s primary elementary and secondary education funding formula.
- Local school districts may use their share of 81.8 percent of the stabilization education funds for any activity authorized under the Elementary and Secondary Education Act of 1965 (ESEA), which includes the modernization, renovation, or repair of public school facilities. The funds may also be used for activities authorized under the Individuals with Disabilities Education Act (IDEA), the Adult Education and Family Literacy Act (Adult Education Act), or the Carl D. Perkins Career and Technical Education Act of 2006 (Perkins Act).
- Local school districts should use funds consistently with the intent and overall goals of ARRA: to create and save jobs and to advance the education reforms set forth in the assurances section to produce lasting results for students from early learning to college. Local school districts are also encouraged to consider uses of funds that create lasting results without creating unsustainable recurring costs.
Funding
States will compete for a share of $4.35 billion to be awarded on a competitive basis. State education agencies that receive the Race to the Top Funds must give at least 50 percent of the grants to local school districts in subgrants.
Timeline
Race to the Top funds will be available in two rounds: Fall 2009 and Spring 2010.
