The Reference Desk, using available evidence and research, provides quick-turnaround responses to questions submitted by education stakeholders around the Northeast and Islands Region. Every Friday, REL-NEI highlights one or two questions submitted to its Reference Desk.
How Will State Stabilization Funds Be Used?
With the passage of the American Recovery and Reinvestment Act (ARRA), the Reference Desk has received a number of questions regarding stimulus funds. These two questions concern the State Fiscal Federal Stabilization Funds (SFSF) and their proper appropriation under ARRA. The requester wanted, “to know what all of his options are for proper use of the SFSF under the ARRA and what the preferred and/or recommended uses are of those SFSF monies according to the Department of Education.”
Questions
- How are State Fiscal Federal Stabilization Funds (SFSF) supposed to be appropriated consistent with the principles of ARRA?
- What has the Department of Education determined to be the preferred and/or recommended uses of SFSF?
Research Synopsis
The Department of Education says: “The Stabilization program is a new, one-time appropriation of approximately $48.6 billion that the U.S. Department of Education will award to Governors to help stabilize State and local budgets in order to minimize and avoid reductions in education and other essential services, in exchange for a State’s commitment to advance essential education reform in four areas: (1) making improvements in teacher effectiveness and in the equitable distribution of qualified teachers for all students, particularly students who are most in need; (2) establishing pre–K-to-college-and-career data systems that track progress and foster continuous improvement; (3) making progress toward rigorous college- and career-ready standards and high-quality assessments that are valid and reliable for all students, including limited English proficient students and students with disabilities; and (4) providing targeted, intensive support and effective interventions for the lowest-performing schools.
“There are two components of the Stabilization program. They are the Education Stabilization Fund (CFDA No. 84.394) and the Government Services Fund (CFDA No. 84.397). By statute, the Department will award 81.8 percent of a State’s total Stabilization allocation under the Education Stabilization Fund and the remaining 18.2 percent of its allocation under the Government Services Fund.”
Publicly Available Resources
- Guidance on the State Fiscal Stabilization Fund Program. U.S. Department of Education; April 2009.
The uses of SFSF are detailed in section D (pages 18–37) of the original Guidance on the State Fiscal Stabilization Fund Program.
Authorized uses of Education Stabilization Funds under SFSF
Under ARRA and SFSF, an LEA is authorized to use Education Stabilization funds for any activity that is authorized under the following Federal education acts:
- The Elementary and Secondary Education Act of 1965 (ESEA);
- The Individuals with Disabilities Education Act (IDEA);
- The Adult Education and Family Literacy Act (AEFLA); or
- The Carl D. Perkins Career and Technical Education Act of 2006 (Perkins Act).
The ARRA also provides that, to the extent consistent with state law, an LEA may use Education Stabilization funds for modernization, renovation, or repair of public school facilities, including modernization, renovation, and repairs that are consistent with a recognized green building rating system. If an LEA uses Education Stabilization funds for modernization, renovation, or repair of public school facilities or for construction of new school facilities, the LEA must comply with specific requirements relating to the use of American iron, steel, and manufactured goods used in the project (See Section 1605 of the ARRA).
The Department encourages LEAs to use available Education Stabilization resources in ways most likely to assist states in making progress in areas related to the four education reform assurances (see synopsis above) in the stabilization application and to lead to improved results for students, long-term gains in school system capacity, and increased efficiency and effectiveness.
Prohibited uses of Education Stabilization Funds under SFSF
Section 14003 of ARRA prohibits an LEA from using Education Stabilization funds for:
- 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;
- Improvement of stand-alone facilities whose purpose is not the education of children, including central office administration or operations or logistical support facilities; or
- School modernization, renovation, or repair that is inconsistent with State law.
- Modifications to Questions in the April 2009 Guidance on the State Fiscal Stabilization Fund Program. U.S. Department of Education; May 2009.
In this report, the U.S. Department of Education provides updated guidance and responds to questions regarding the funding.
The Reference Desk also recommends this website for recent news about ARRA related documents and information: http://www.recovery.gov/
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