Federal Stimulus Bill and the Education Budget

from the NC Fiscal Research Division

February 24, 2009

The entire presentation is available HERE or by going to the on the Fiscal Research Website:


Fiscal Stabilization Fund Overview

·      Up to $1.4 billion available over 2-year period

Use Fiscal Stabilization money to partially restore cuts in State funding to public schools and higher education or reduce state funding for education.  Funding will be released as early as March and April. Governor submits an application from the state to acquire funds. Still unknown is who will determine how the funds will be used.

                                                                                               2009                                2010

Fiscal Stabilization Education (81%)                         $1,161,931,564               $0

Fiscal Stabilization Other (19%)                                  $258,522,671                 $0                       

Eligibility Requirements

·      Maintenance of Effort: (State must fund education at 2006 levels ($6,721,053,466-2005-2006 public schools), (amount undetermined, could use 2006-2007 funding allotments as the base).

·      Teacher Effectiveness: Address inequities between distribution of teachers between high-poverty and low-poverty schools.

·      P-16 data system: Establish a longitudinal data system.

·      Standards and Assessment plan: Comply with ESEA provisions related to assessments for CWD and LEP students.

·      Require Expenditures of Funds: Restore public schools and higher education budgets to FY 2008-09 levels, can be used for operations or capital.


·      Worst Case: State could cut budget to 2005-2006 levels equals an $869 million cut to public schools or 10.9 percent. Total funding $7,125,045,932

·      Best Case: State support stays at 2008-2009 levels, use stabilization to expand funding meaning an increase to public schools of 7.3 percent or an additional $581 million. Total funding $8,574,634,621.

·      Middle of the Road: State support falls 8 percent, fiscal stabilization partially restores cuts (net cut of 3 percent for public schools for 2009-2010)  Possible Funding Post-Stimulus for State Public Schools based on this scenario- $7,750,727,592.

Categorical Funding                2009                    2010

Title I                                          $128,728,180         $128,728,180

·      Funds would supplement State and local funding for low-achieving and high poverty children with 38 percent of stimulus money allotted for targeted grants, 38 percent for concentrated grants and 23 percent for school improvement. Must provide Maintenance of Effort, State and Local expenditures for education cannot be less the 90 percent of prior year expenditures.

IDEA                                     2009                               2010           

                                               $157,205,020               $157,205,020           

IDEA Preschool            $6,035,571                  $6,035,571

·      To be eligible all LEAs  must submit application to State and get approval prior to receiving funds. The formula is based on 75 percent of the December 1998 allocation and 15 percent based on Title I headcount.  Must provide Maintenance of Effort, State and local expenditures for special education and related services cannot be less than prior year expenditures.

Educational Technology       2009               2010     

                                                          $8,179,529            $8,179,529

·      All LEAs receiving Title I funds are eligible. The distribution formula is 50 percent allocated based on the LEAs proportional share of Title I funds and 50 percent competitive or for 2009-2010 states can make the distribution 100% competitive.

Competitive Funds (are available to all States) Total 6.1 Billion

State Incentive Fund                                        $5 Billion

Innovative Fund                                                $650 Million

Teacher Incentive Fund                                  $2 Million

Statewide Data Systems                                  $250 million

School Construction Bonds:

QZAB’s-$1.4 Billion increase of $1 Billion

School Construction Bonds-$275.5 Billion-NC availability-$551 million over the next two years. Distribution of 40 percent to seven LEAs (Wake, Charlotte, Robeson, Durham, Guilford, Forsyth, and Cumberland). Sixty percent to SEAs.




Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: