Governance teams mull use of stimulus funds 

School districts, county offices of education and directly funded charter schools should now have billions of flexible federal stimulus dollars in hand, but with severe state budget cuts still to come, many governance teams are uneasy about how and when to use the money.

The first allotment of $2.56 billion in State Fiscal Stabilization is meant to restore amounts the state cut in February from 2008-09 revenue limits. Additional funds to replace state cuts to categorical programs are anticipated this month, with an additional $1.1 billion in SFSF to be available in the fall.

But by the time the repercussions of the revised May budget are known, the windfall of stimulus funds is expected to make up only half of what California schools will lose this year and next. Voters’ patent rejection of last month’s ballot-box budget solutions sends the Legislature back to the drawing board to slash another $21.3 billion from the 18-month budget that runs through June 2010. Gov. Arnold Schwarzenegger, claiming a clear mandate to cut state spending at all costs, is proposing to cut school funding by $1.4 billion this year and another $1.5 billion next year, plus deferring $1.6 billion of next year’s apportionment into 2010-11.

“It’s mind-boggling to imagine what these additional cuts will do to our children’s future,” said CSBA Executive Director Scott P. Plotkin. “Hopefully, this will serve as a wake-up call to our state leaders that it is time to do something about the state’s irrational funding system for public education.”

Although experts at CSBA and other education groups dispute the assertion, the governor’s Department of Finance opines that education funding could be cut $6 billion more before falling below the level of education spending in FY 2006, which is the “maintenance of effort” level required by the American Recovery and Reinvestment Act. The state’s initial application pegged the MOE at $34.9 billion; with the failure of the May ballot initiatives to help close the gap, however, the state is applying to revise the MOE amount downward. CSBA is opposing the move.

Stimulus guidance

Local educational agencies are expected to use the funds to help bridge funding gaps and drive education reform. The U.S. Department of Education advises decision-makers to consider five issues when determining how to use the funds: Will the proposed use improve results, increase long-term capacity, advance reform goals, avoid recurring costs and foster continuous improvement?

Related link:

Preliminary U.S. Department of Education guidance for policymakers on the use of stimulus funds is available under the Spotlight section @ www.csba.org