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Who Got Stimulus Dollars? High-Need Districts, High-Performing States

The 2009 federal economic-stimulus package also launched the bulk of President Obama's education agenda, in the form of new competitive grants like Race to the Top. But a new federal report finds these competitive grants funneled stimulus money to states that had both big budget gaps and top-flight students.

The American Recovery and Reinvestment Act pushed $70.6 billion to states' elementary and secondary schools, both through existing programs like Title I grants for children in poverty, and through the new competitive grants. The report, part of the U.S. Department of Education's evaluation of the funding's effect on education reform, shows states whose spending most outstripped their revenues received on average $143 more per pupil, or $1,431 versus $1,288 per student given to states with smaller budget gaps. This came primarily from the competitive grants, as states with big budget gaps received $126 per student on average in competitive funding, more than five times as much as the $22 per student awarded to states with smaller budget gaps.

The competitive grants were intended to spur overall educational achievement and encourage states to improve teacher and data quality and bring up their most chronically struggling schools, but the report data seem to suggest that states that already had high-achieving students were more likely to win their proposals to participate in Race to the Top. States with the highest scores on the National Assessment of Educational Progress were awarded, on average, $1,463 per student in stimulus funding, compared to an average $1,304 per pupil for states with the lowest NAEP achievement. Take out the money from competitive grants, and the gap between states with the highest and lowest per-pupil amounts shrinks from 11 percent to only 3 percent.

By contrast, states with higher child-poverty rates didn't get much of an edge in the stimulus; there was only a $14 difference in the average education funding per student between states with the highest and lowest child-poverty rates.

At the district level, the competitive grants look very different. States were required to follow the poverty-weighted Title I formula when awarding State Fiscal Stabilization Fund money to districts, and competitive grants likewise focused on persistently low-performing schools, which frequently have large high-poverty student populations. As a result, while more than 93 percent of all districts received at least some stimulus funding (on average $974 per pupil), high-poverty districts averaged twice the stimulus help as low-poverty districts: $1,369 versus $684 per pupil.

When the stimulus funds first started rolling out, there was a lot of talk about how the influx of competitive grant money might change the face of education funding. This first report presents an interesting picture of how the money shook out. Now, with the Education Department is launching a district-level Race to the Top competition, it will be interesting to see how well federal funding reaches the students most in financial and academic need.

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