Some States Still Lagging in ARRA Title I Spending

Though fiscal year 2011 – the year most education funds from the American Recovery and Reinvestment Act (ARRA) of 2009 were set to expire – has come and gone, some states are still clinging to their ARRA Title I funds. These funds are intended to provide additional services for low-income students and are distributed by formula among states and school districts. In an effort to give states the opportunity to use all of their Title I funds from the stimulus bill, last September the Department of Education gave states permission to apply for waivers that would allow them to obligate any remaining ARRA Title I funds through the end of fiscal year 2012. Previously, those states have to obligate the funds September 30^th, 2011 and spend them by January 3^rd, 2012.

This was a significant development for several states that initially faced obstacles in distributing their ARRA Title I funds to districts. In some cases, states had tens of millions of dollars remaining on October 1st, 2011. But it appears that the vast majority of states had at least some money lingering in their ARRA accounts at the end of the 2011 fiscal year. Where do those states stand today? 

According to Department of Education spreadsheets on outlaid and remaining ARRA Title I funds, only six states had used every single one of their ARRA Title I dollars as of January 13, 2012. Those states are Hawaii, Iowa, Kentucky, Missouri, South Carolina, and Vermont, an interesting collection of states with widely varied budget deficits during the economic downturn.

Most states have somewhere between 0.1 percent and 2.0 percent of their funds remaining, meaning they have about 8 months to spend anywhere from a few thousand dollars (Connecticut and Alaska, for example) and several million (Ohio, Texas, and California, among others). In total, over $175 million is still unspent, 1.8 percent of the total $10 billion made available.

But a few states have really lagged in getting their funds out the door. Puerto Rico is the biggest offender – it has $70.0 million in funds remaining, 17.3 percent of its original allocation under ARRA Title I. Nebraska comes in second with 14.2 percent, or $6.8 million in remaining funds. North Dakota, the District of Columbia, and New Jersey round out the top five, each with over 5.0 percent of their funds remaining.

It is likely that the states with relatively small proportions of their funds remaining will have little trouble obligating and spending their ARRA Title I funds between now and September 30^th, 2012. But the states with significant remaining balances will have to engage in some thorough and thoughtful planning to make sure they don’t lose any of these funds at the end of the year.

To download a table containing these data for all 50 states, Puerto Rico, and the District of Columbia, click here.