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State Stabilization Funds in Economic Recovery Act

Governors are eligible to receive a total of $48.3 billion, $39.5 billion for education and $8.8 billion for public safety and other government services, which may include education and school modernization, renovation and repair. The funds are intended to help avert cuts and retain teachers and professors, and may support the modernization, renovation, and repair of schools, as well as public safety and other government services.

The Department of Education has said that states that used their SFS and Title I funds to advance the education reform strategies outlined in the American Recovery and Investment Act of 2009 (ARRA) are well positioned to receive additional funds via the $4.35B Race to the Top competive grants program.

In a Fact Sheet on the State Fiscal Stabilization Fund, the Department of Education outlines priorities for use. These are to advance essential education reforms to benefit students from early learning through post-secondary education, including:

Improvements in teacher effectiveness and commitments that all schools have highly qualified teachers;
Progress toward college and career-ready standards and rigorous assessments that will improve both teaching and learning;
Improvements in achievement in low-performing schools, by providing intensive support and effective interventions in those schools.

In a letter to Governors, Secretary Duncan outlines a set of proposed measurements that states would report on their progress toward the education reforms spelled out in the law. The Department will release these metrics for public comment in the Federal Register in April and then issue a final version. The guidelines require states to report the number of jobs saved through Recovery Act funding, the amount of state and local tax increases averted, and how funds are used.

It further requires that the bulk of the federal dollars be spent on education. To receive State Stabilization Funds, states must also meet maintenance-of-effort (MOE) requirements of the law by showing that 2009 state education budgets at least meet 2006 state education budget levels. If they cannot meet the maintenance-of-effort requirements, states can receive a waiver if they can show that their education budgets are not being disproportionally reduced.

About the Award Process:
Guidance from the Department states that the Stabilization funds will be awarded to Governors in two phases. The Department has released Guidelines and an Application for the Phase I and Phase II (see below). In phase one, within two weeks of receipt of an approved Stabilization fund application, the Department will release 67% of a state’s total Education Stabilization and Government Services Fund allocation. See a list of approved Phase I SFS state grantees. The Department has also posted the list of Phase II SFS state applications.

See the Department of Education's guidance:

State Fiscal Stabilization Fund Phase II Application (posted July 1, 2009 on Department’s Recovery webpage)
State Fiscal Stabilization Phase II Fact Sheet (posted on July 1, 2009)
State Fiscal Stabilization Fund I Application (posted Apr 1, 2009 on Department's Recovery webpage)
State Fiscal Stabilization Fund Guidance (posted Apr 1, 2009 on Department's Recovery webpage)
Modifications to Questions in the April 2009 Guidance on the State Fiscal Stabilization Fund Program (posted May 11, 2009). In this document the Department discourages the use of either Education Stabilization funds or Government Service funds for new construction.

More Resources:

U.S. Department of Education website on Recovery Act: www.ed.gov/policy/gen/leg/recovery/index.html#apps
Wiki with Q&A and Afterschool Strategies on Accessing SFS: www.afterschoolwiki.org
Department of Education table of state by state preliminary estimates from State Fiscal Stabilization Fund.
Department of Education webpage on school modernization via State Fiscal Stabilization Fund.
State-Level Recovery Act Funding Reports Now Available: A report detailing how much money has been made available, in each state and how much money has been outlaid, or drawn down, is now available.

Making the Case
Governors will have a tremendous oversight over the distribution of the Stabilization Funds. Here are some tips to making the case for tapping youth activity funds in the Economic Recovery’s State Stabilization Funds.

Call, write and meet with your Governors and let them know that investments in afterschool programs will provide core services for working families and make an immediate impact on the economy.
Mine the speeches and statements of your Governor before you craft your letter or talking points. Make sure you mirror their priorities in making the tie to afterschool supports.
Identify champions to help you make the case. For example, members of your state legislatures and city leaders including mayors and law enforcement officials can help author letters of support to Governors.
From the Rhode Island After School Plus Alliance: Sample language on making afterschool and summer funding recommendations to governors, state legislatures and relevant state agencies.
From the Georgia Afterschool Investment Council : Sample Language for Letter to Governor

Afterschool Alliance
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