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Why States Aren't Rushing to the Stimulus Stabilization Fund

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Schools and the StimulusThe U.S. Department of Education has been quietly, and now more openly, grousing about how slow states have been in applying for state stabilization funds under the economic stimulus package. Other folks are taking note and also questioning states' slow progress.

The deadline for applying for stabilization funds is July 1. So far, 19 states have been approved. At least 30 applications have been received. (UPDATE: That 30 figure includes the 19 applications that have already been approved.)

Well, late last month, the National Governors Association hosted states' stimulus czars from across the country, and I got to pose this question to a few of them: What's taking you guys so long? They laughed, as if the federal officials just don't get it. Here are some of the reasons it's taking so long, according to these czars:

* Legislative sessions have only recently started wrapping up, and most of those sessions involve budget work and serious discussions about what to do with stimulus money. In fact, the National Conference of State Legislatures session calendar shows that most states didn't start adjourning until late April or this month. Some go into June. Its hard to fill in budget numbers on the stabilization fund application if the budget isn't done.

* Governors, who must apply for the funds, have to promise things in these applications, such as making progress on data collection and removing charter caps. Apparently, governors are taking these promises seriously. Plus, governors are responsible for a lot more stimulus funding--education- and non-education-related--than just the stabilization funds.

* While school districts might want the money this very minute, states might not have the same sense of urgency. They probably wouldn't be applying the stabilization fund money until their fiscal 2010 budgets. Most states' budget years start July 1. That's still weeks away.

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But wait, there's more! A spokesman for the CT Dept of Education just told me that their "goal is to submit our application by July 1st"... duh, that's the deadline! And that one big reason for the delay is that they and Gov. Rell's office are still confused about how the stablization funds could be used: their understanding is that they can only be used to "supplement" budgets and to "restore" cuts. They think they have to make cuts before they can spend the stimulus stabilization funds.

The Day covered this in a story May 25:
http://tinyurl.com/p4w9dh

How come the 30 states who've already applied weren't so confused? Meanwhile, Connecticut's $541 million in education stabilization stimulus funds is burning a hole in Arne Duncan's pocket.

Here's a working link to the May 25 story in The Day:
http://www.theday.com/re.aspx?re=0c087378-1607-4dfc-896f-3b19c69a93a1

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