What is Happening with the Education Jobs Fund?

Almost six months ago to the day, President Obama signed into law the Education Jobs Fund, a $10 billion program that provides funding to states to support employment related expenses for K-12 education. Congress and the president believed that the $10 billion program would be necessary to keep public schools afloat as states confronted the end of the State Fiscal Stabilization Fund, a similar program created by the American Recovery and Reinvestment Act of 2009. So what has happened with the new money provided by the Education Jobs Fund over the last six months?

As could be expected, some states spent the funds quickly to make up for shortages in state funding for education. According to Department of Education data, Kansas has drawn down 99.9 percent of its funds and Georgia has drawn down 99.7 percent. South Dakota has drawn down its entire $26.3 million obligation. This finding is somewhat surprising given that South Dakota is one of the few states that did not face a particularly large budget shortfall in fiscal year 2010 (4.3 percent of the state’s general fund according to the Center for Budget and Policy Priorities).

Other states, conversely, have drawn down literally none of the federal funds that have been obligated to them. Colorado, Delaware, Hawaii, Louisiana, Missouri, Montana, Nebraska, New York, North Dakota, Pennsylvania, Vermont, West Virginia, and the District of Columbia have not accessed any of their federal Ed Jobs Funds. This could mean that these states are still working through funding they were allocated under the 2009 State Fiscal Stabilization Fund and do not need to tap into their Education Jobs Funds to make up for state funding gaps in K-12 education. Or, it is possible that some of these states have yet to request reimbursement from the federal government for expenditures they have already made with Education Jobs Fund monies. Similarly, it is possible that some of these states have yet to determine how they will use the funds. Regardless, the funds expire September 30, 2012, giving these states a little over a year and a half to draw down all of their funds.

Finally, two states have not participated in the program at all thus far. South Carolina has apparently chosen not to apply for the funds at all, despite encouragement from the Department of Education. Texas, on the other hand, has yet to submit a successful application for the funds. ED rejected Texas’ initial application in early September of 2010 because it contained conditional assurances of education funding. In other words, Texas’ application only guaranteed a certain level of education funding if tax revenues remained stable. ED would not accept these assurances, saying that Texas had to unconditionally guarantee a certain level of education spending regardless of tax revenues. Texas actually is required to submit a different application from the rest of the states because of a provision in the law that places a stricter maintenance of effort requirement on the state. It does not appear that Texas has submitted a revised application.

To date, states have drawn down $2.3 billion of the $9.0 billion (25.9 percent) in funds that have been obligated. California accounts for nearly half of this amount because it has drawn down almost $1.1 billion of its $1.2 billion allocation (89.5 percent). States have until September 30th, 2012 to drawn down the remaining three-quarters of the funds. Though it is possible that some states will not use all of the funds that have been allocated to them, others will likely hold off on releasing the funds until the 2011-12 school year, giving them the summer of 2011 to plan for how they will use the funds.

Check back with Ed Money Watch for more updates on the Education Jobs Fund and how the states are distributing them.

For a full table of obligations and outlaid funds under the Education Jobs Fund, click here.

Attachments: 

ED Jobs Obligations and Outlays.pdf