Transcript Slide 1

FEDERAL STIMULUS BILL
•General Overview
•Impact of Specific Provisions
Minnesota Department of Education
February 18, 2009
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State Fiscal Stabilization Fund
General Overview:
• $53.6 billion available to states
• Approximately $821.4 million available to the state of
Minnesota (this is an estimate only).
• Distribution to states: 61% is based on a state’s
relative population of individuals aged 5-24 and 39% is
based on the relative total population.
• Governor must allocate 81.8% of the state’s allocation
for the support of “elementary, secondary, and
postsecondary education and, as applicable, early
childhood education programs and services.”
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State Fiscal Stabilization Fund
Governor must use the funds first to:
1. Restore in FY 2009, 2010 and 2011 the level of state
support to K-12 education to the greater of FY 2008 or
FY 2009.
2. Allow existing State funding increases to support
elementary and secondary education for FY 2010 and
FY 2011 to be implemented if such funding increases
were enacted pursuant to state law prior to October 1,
2008.
3. Provide in FY 2009, 2010, 2011, the amount of funds
to public institutions of higher education in the State
that is needed to restore State support for higher
education to the greater of FY 2008 or FY 2009 level.
(This excludes tuition and fees paid by students.)
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State Fiscal Stabilization Fund
If the Governor determines that amount of funds
to cover #1-3 is insufficient, the allocation of
#1-3 is proportionate to the relative shortfall in
State support as described in #1-3.
After carrying out #1-3, remaining funds (if any)
are provided to Local Educational Agencies
(LEAs) based on their relative shares of
funding under Title I, part A of the Elementary
and Secondary Education Act.
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State Fiscal Stabilization Fund
Allowable Uses by Local Education Agencies
include any activities under:
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Elementary and Secondary Education Act
Individuals with Disabilities Education Act
Carl D. Perkins Career and Technical Education Act
Modernization, renovation or repair of public school
facilities, including modernization, renovation, and
repairs that are consistent with a recognized green
building rating system.
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State Fiscal Stabilization Fund
Prohibitions on Funding for K-12 Education:
– Payment of maintenance costs
– Stadiums or other facilities primarily used for
athletic contests or exhibitions or other events for
which admission is charged to the general public
– Purchase or upgrade of vehicles; or
– Improvement of stand-alone facilities whose
purpose is not the education of children, including
central office administration or operations or
logistical support facilities.
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State Fiscal Stabilization Fund
The Governor must submit an application to the Secretary of
Education. In the application, the Governor must assure:
– Maintain effort for elementary and secondary education in FY
2009, 2010 and 2011 at least at such level as FY 2006.
– Maintain effort for higher education in FY 2009, 2010 and
2011 for public institutions of higher education at least at such
level as FY 2006.
– Improve achieving equity in teacher distribution under ESEA
section 1111(b)(8)(C).
– Improve collections and use of data under America
COMPETES Act section 6401(e)(2)(D).
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State Fiscal Stabilization Fund
In the application, the Governor must assure (continued):
– Enhance the quality of statewide assessments and
comply with rules related to inclusion of children
with disabilities and limited English proficient
students in statewide assessments and provide
necessary accommodations.
– Improve State academic content standards and
student academic achievement standards
consistent with section 6401(e)(1)(9)(A)(ii) of the
America COMPETES Act.
– Ensure compliance with section 1116(a)(7)(C)(iv)
and 1116(a)(8)(B) of ESEA and support schools in
need of improvement.
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State Fiscal Stabilization Fund
Clarification is needed on definition of “State Support” for
MOE calculation:
• If calculations are done using aid entitlements or appropriations
excluding shifts, MN exceeds MOE requirement each year by
over $500 million
• If calculations are done using appropriations including shifts, MN
exceeds MOE requirement by only $23 million in FY 2010 under
current law, and falls short of MOE by $1.176 billion under current
Governor’s recommendation
– FY 2006 base inflated by $607 million for shift paybacks
– FY 2010 Governor’s recommendation based on November forecast
reflects $1.252 billion shift reduction
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State Fiscal Stabilization Fund
Maintenance of Effort Waiver
Eligibility Criteria:
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State or local educational agency must have experienced a
precipitous decline in financial resources.
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State maintains education spending as a percentage of state
budget from the preceding fiscal year.
Waiver:
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If eligible, a state or local education agency may treat any
funds received under the State Fiscal Stabilization Fund as
non-federal funds for MOE requirements for one year only.
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State Fiscal Stabilization Fund
State Incentive Grants
• $4.350 billion available for states (Secretary of
Education may reserve 1% for administration).
• Governor submits application to the Secretary
of Education
• Each state receiving a state incentive grant
must use at least 50 percent of the funding to
provide LEAs with sub-grants based on the
Title I, part A formula
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State Fiscal Stabilization Fund
State Incentive Grants
Secretary of Education will distribute grants to states that have made
significant progress in meeting:
– Improve achieving equity in teacher distribution under ESEA section
1111(b)(8)(C).
– Improve collections and use of data under America COMPETES Act
section 6401(e)(2)(D).
– Enhance the quality of statewide assessments and comply with rules
related to inclusion of children with disabilities and limited English
proficient students in statewide assessments and provide necessary
accommodations.
– Improve State academic content standards and student academic
achievement standards consistent with section 6401(e)(1)(9)(A)(ii) of
the America COMPETES Act.
– Ensure compliance with section 1116(a)(7)(C)(iv) and 1116(a)(8)(B)
of ESEA and support schools in need of improvement.
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State Fiscal Stabilization Fund
Innovative Fund
Secretary of Education may reserve up to $650
million to establish an Innovative Fund to
recognize eligible entities.
Eligible entities:
– Local education agency or
– Partnership between a nonprofit organization and
either one or more local education agencies or a
consortium of schools.
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State Fiscal Stabilization Fund
Innovative Fund
The Secretary must award entities that have:
– made significant gains in closing the achievement gap;
– exceeded the State’s annual measureable objectives for two
or more years or have demonstrated success in significantly
increasing academic achievement for all groups of students;
– made significant improvement in other areas, such as
graduation rates or increased recruitment and placement of
high quality teachers and school leaders as demonstrated by
meaningful data; and
– demonstrated that they have established partnerships with the
private sector and the private sector will provide matching
funds in order to bring initiatives to scale.
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State Fiscal Stabilization Fund
The work from the Innovation Fund must:
– Allow eligible entities to expand their work
and serve as models for best practices
– Allow eligible entities to work in partnership
with the private sector and the philanthropic
community
– Identify and document best practices that
can be shared and taken to scale
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Elementary and Secondary Education Act Funding
• Title I, Part A funding: $87 million (est.)
– Formula based on census data
• Title II, part D funding: $5.8 million (est.)
– Competitive to local school districts and used to enhance
technology in schools
• McKinney Vento funding: $612,000 (est.)
– Competitive to local school districts and based on number of
homeless students in 2007-08
• School Improvement funding: $27.2 (est.)
– Competitive to local school districts and assists schools in
need of improvement
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Federal Special Education Funding
• Education for All Handicapped Children Act of
1975 (P.L. 94-142)
– FAPE a legal right for all children with a disability
– Authorized federal funding for up to 40% of
national average excess cost of special ed
• Reauthorized in 1991,1997 and 2004 as IDEA
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Federal Special Education Funding
• FY 2009 Allocations to Minnesota:
– Part B, Section 611 (3-21)
$180.4 Million
– Part B, Section 619 (3-5)
$
7.3 Million
– Part C
$
7.0 Million
(Birth – 2)
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Federal Special Education Funding
• New Allocations under Economic Stimulus Bill
Two-Year Total - FY 10 + FY 11 ($ millions):
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U.S.Total
MN (Est)
– Part B, Sec 611
$ 11.3 Billion
– Part B, Sec 619
$ 400 Million
$ 3.2 million?
– Part C
$ 500 Million
$ 5.8 million
$189.8 million
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Federal Special Education Funding
Standard Rules for Use of IDEA Funds Apply To
Increase in IDEA Funding Under Economic Stimulus
Bill
• Funds Must be Used for Excess Cost of Special
Education
• Maintenance of Effort (50% rule)
• Tydings Amendment (27 months to Obligate)
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Federal Special Education Funding
Part B, Section 611
3 part formula for allocating funds to LEAs:
• Base Funding –
– $55.1 million (FFY 99 funding level)
– allocated based on 1998 child count
– for districts with newly opened, closed or
significantly expanded charter schools, dollars are
reallocated within district based on current year
child count
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Federal Special Education Funding
Part B, Section 611
Increase over Base ($108.8 million) is allocated:
• 85% on Total PK-12 enrollment
– (October 1 MARSS + nonpublic enroll)
– $92.5 million
• 15% on Poverty (Free and Reduced lunch count)
– $16.3 million
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Federal Special Education Funding
New Part B, Section 611 Funding
• $94.5 million per year for 2 years
• The portion allocated to LEAs would be distributed
85% based on total PK-12 enrollment, and 15%
based on poverty
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Uses of Federal Funds
• Can only be used to pay the excess costs of
providing special education
• Must be used to supplement not supplant
state and local funds
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Uses of Federal Funds
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Staff
Contracted Services
Staff Development
Supplies
Equipment
Early Intervening Services (15%)
Cannot be used to cover unreimbursed cost
for staff funded with state categorical funds
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Requirements for Federal Funds
Maintenance of Effort:
• State-level maintenance of effort
– Additional Federal $ do not reduce State’s obligation to maintain effort
– State-level special education spending cannot be reduced below prior year
level to offset increase in federal special education funding
– MDE calculates based on:
• 100% of State Aid Entitlement +
• Direct SP Ed Expenditures by state agencies (e.g., Academies)
• LEA maintenance of effort
– 50% rule Applies
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Requirements for Federal Funds
LEA Maintenance of Effort Exceptions:
50% Rule
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LEAS may treat up to 50% of the increase in IDEA Part B
funds over the previous year as local funds
This reduces MOE requirement for one year only
Interconnected with 15% for EIS provision
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Requirements for Federal Funds
50% Rule Example:
FY 09
200
Federal funds:
50% of Incr in Fed
State & local funds
(min. for MOE) 1,000
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FY 10
300
50
FY 11
300
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FY 12
200
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950
1,000
1,000
LEA can treat $50 as local (e.g., supplant state $
with federal $) in FY 10 only
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Requirements for Federal Funds
Early Intervening Services - 15% Rule
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LEAs may use up to 15% of IDEA Part B funds,
less any amount used for 50% rule, for EIS.
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For students in K-12 not identified as needing
special education services but who need
additional academic and behavioral support to
succeed in a general education environment
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Requirements for Federal Funds
LEA Maintenance of Effort Exceptions:
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Decrease in enrollment of children with disabilities
Change in status of a high-cost student
Elimination of one-time expense (e.g., major
equipment purchase)
Voluntary departure or departure for just cause of
staff while maintaining FAPE
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Requirements for Federal Funds
Under the Tydings Amendment:
• funds must be obligated within 27 months and
expended within 30 months
– Example: funds becoming available in SFY 2010
must be obligated by Sept. 30, 2011, and expended
by December 31, 2011.
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Other Funding
• Head Start: $20.6 million (est) to
Minnesota
– Funding flows directly to local providers
• Impact Aid: $100 million to states
– Eligible entities apply for funding
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New Reporting Requirements
New reporting requirements include:
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Use and distribution of funds
Number of jobs saved or created
Tax increases averted because of funds
Progress in reducing inequity in the distribution of
highly qualified teachers, implementing state
longitudinal data system, developing valid and
reliable assessments for ELL students and students
with disabilities
– Tuition and fee increases imposed and any actions
taken to limit increases to students
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New Reporting Requirements Continued
New reporting requirements continued:
– Extent to which public institutions of higher
education maintained, increased or
decreased enrollment of in-state students
including students eligible for financial aid
– Description of each modernization,
renovation and repair project funded, which
must include amounts awarded project
costs
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Department Staff
Lisa Mueller
Program Finance
651-582-8225 or [email protected]
Chas Anderson
Deputy Commissioner
651-582-8207 or [email protected]
Tom Melcher
Director, Division of Program Finance
651-582-8828 or
[email protected]
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