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California Defends Its 'Maintenance of Effort' Stance

California Gov. Arnold Schwarzenegger's team has formally responded to allegations raised by two groups of education officials and community organizations that could be holding up hundreds of millions of dollars in federal economic-stimulus money for the state's public schools.

Last week, the U.S. Department of Education asked the governor's team to address the accusations that Mr. Schwarzenegger used accounting tricks in his proposed K-12 budget to give the appearance that the state will meet the required maintenance of effort provision in the federal stimulus law. Maintaining a minimum funding level for K-12 is a condition for states to receive money from the stimulus program's State Fiscal Stabilization Fund.

Herb K. Schultz, who is the governor's point man on all things recovery-related, put out a terse, one-line statement, along with the letter that addresses, point by point, each allegation raised by the groups.

In his statement, Mr. Schultz not-so-subtly suggests that the group's objections threaten the state's shot at receiving its second installment of fiscal stabilization money, and insists that California "has met all federal requirements for the second distribution of stimulus funding for education."

He also said he was "disheartened that anyone would try to stand in the way of securing nearly a half of a billion dollars in critical funding for our education system during these difficult economic times."

The governor's team and the education groups seem to be miles away from coming to an agreement on this maintenance of effort issue.

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