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Ed Money Watch

A Blog from New America's Federal Education Budget Project

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States Lagging in Drawing Down ARRA Title I and IDEA Funds

Published:  July 5, 2011

Last Friday, July 1st, marked the beginning of fiscal year 2012 for many states. For all states, it marked the beginning of the last quarter of federal fiscal year 2011 – the final three months that most funds from the American Recovery and Reinvestment Act of 2009 will be available. Last month we wrote that many states have or almost have spent all of their State Fiscal Stabilization Funds. Unfortunately, that is not the case for the additional Title I and Individuals with Disabilities Act (IDEA) funding provided through the ARRA.

According to data made available by the Department of Education, not a single state had drawn down 100 percent of either its Title I or IDEA funds as of June 24th. However, some states are close; seven states have drawn down more than 90 percent of their Title I funds and 12 have drawn down more than 90 percent of their IDEA funds. States, like Connecticut, Iowa, Kansas, Maine, North Carolina, and Vermont, that have drawn down more than 90 percent of funds from both sources, will most likely expend all of the funds before they expire on September 30th, 2011.

But what about the other states? Several states are not even close to spending all of their Title I or IDEA ARRA funds. Seven states have drawn down less than 70 percent of their Title I funds – the District of Columbia, Hawaii, Nebraska, New Hampshire, Utah, Virginia, and Wyoming. Hawaii has drawn down the lowest percent – 43.4 percent of its $33.2 million allocation – meaning the state has less then three months to drawn down more than half of its funds. With the exception of Wyoming, these states have all faced sizeable budget shortages in the past two fiscal years. While this would suggest that these states would have spent the money quickly, that is apparently not the case. This may be due to the way the states distributed the funds, whether the states receive the funds via reimbursement, or other budgetary constraints that limited the way districts could spend the funds.

Six states have drawn down less than 70 percent of their IDEA funds, including Delaware, Nebraska, New Mexico, Utah, Virginia, and Wyoming. Utah has expended the smallest percent at 55.3 percent of its $105.5 million allocation. An additional 9 states have only drawn down between 70 and 75 percent of their funds.

One state stands out in both of these lists – Virginia. According to the Center on Budget and Policy Priorities, Virginia faced a 13.8 percent budget gap in fiscal year 2009 and a 24.1 percent gap in 2010. Why, then, has the state lagged behind many others facing similar gaps in the draw down of both Title I and IDEA funds?

Though the Title I and IDEA funds are more limited in their approved uses than the SFSF monies, it is surprising that so many states still have significant portions of their allocations so close to the end of the federal year. This is particularly true for Title I funds, which can be used for most educational expenditures targeted at low-income students. Similarly, districts could opt to repurpose half of any surplus IDEA funds for general education expenditures if they could not find uses for the funds specific to special education. This flexibility should have ensured a swift expenditure of these funds.

The final fiscal quarter spans the summer months, when educational expenditures slow down considerably. Unless these states are launching major educational efforts over the summer or plan to conserve these funds until September, when school starts up again, they may have difficulties drawing down all their funds on time. Stay tuned to Ed Money Watch as we continue to track these funds through the end of the 2011 federal fiscal year.

To download a spreadsheet with data for all 50 states, click here.

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