Newark, NJ – May 29, 2009

Several prominent advocacy organizations are calling on US Education Secretary Arne Duncan to immediately adopt procedures to facilitate public awareness and participation in decisions related to the distribution of federal fiscal stabilization funds by states.

In a May 21 letter to Secretary Duncan, advocates expressed concern that the current USDOE application process for states to request initial stabilization funds under the American Recovery and Reinvestment Act (ARRA) “lacks transparency in basic respects, and does not afford the public with notice and the opportunity to review and provide comment on the states’ proposed distribution of stabilization funds through the respective state K-12 funding formulas.”

The letter is signed by Education Law Center (NJ), Campaign for Fiscal Equity (NY), Alliance for Quality Education (NY), and the Georgia School Funding Association.  These organizations have spearheaded efforts to secure equitable and adequate school funding in their home states, and ELC assists equity advocates across the nation. 

“We are deeply concerned that stabilization funds will fill state budget holes and not fund increases in state K-12 funding formulas, as required by the Recovery Act,” said Geri Palast, CFE Executive Director. “That’s why we need an open, transparent process for reviewing state applications prior to USDOE approval.”

To receive stabilization funds, state governors must submit an application to USDOE containing the basic calculations for how they will distribute the funds through their funding formula over the next two years (FY10 and FY11).  USDOE must approve the application before the funds can be released to the states.

“We’re asking Secretary Duncan to direct that applications for stabilization funds be posted on state and USDOE websites upon filing, and for USDOE to hold pending applications open for public comment for ten (10) business days,” said David G. Sciarra, ELC Executive Director. “These simple, basic steps are needed to enhance public accountability for these funds.”

The advocates’ letter underscores the provisions in the ARRA that require states to distribute stabilization funds through K-12 school funding formulas to the level of FY08 or FY09, whichever is greater. The ARRA further requires that stabilization funds be used to phase in State “equity and adequacy adjustments” in school funding formulas that were enacted prior to October 2008.

As the advocacy organizations note, the distribution of ARRA fiscal stabilization funds “implicates the provision of state formula funding to disadvantaged students in the nation’s poorest districts and schools, and will have a significant impact on whether such funding advances equity and adequacy in state school finance systems over the next two years.”

These advocacy organizations intend to carefully analyze implementation of all K-12 education elements of the stimulus package as programs unfold in coming months.

“Our organizations are ready to ensure stimulus funds advance educational equity for public school children across the nation, especially low-income students, students of color, and students with special needs,” added Mr. Sciarra.