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Obama Stimulus Plan: This Rescue Makes Sense

Your Association helped to make it happen, saving funding and jobs!

For weeks, Virginia school divisions have planned drastic budget cuts, salary freezes, and layoffs of instructional and support staff in response to the devastating downturn in the local economy and huge anticipated cuts in state support. The $787-billion economic stimulus plan signed into law Feb. 17 by President Barack Obama, which includes an historic increase in federal education aid, should turn the tide.

The American Recovery and Reinvestment Act (ARRA), passed following intense lobbying by National Education Association lobbyists and members across the country, includes a massive $130 billion infusion of funding for education and related programs.

A healthy slice of the money is designated to support states and local school districts that otherwise would have had to slice deeply into K-12 spending. Virginia, now facing a budget shortfall estimated at 3.7 billion and growing, will benefit from a two-year budget infusion of $1.822 billion from the stimulus plan.

Details of the 1,200-page bill are still emerging, and federal, state, and local officials will be scrambling over the next few months to smoothly pump the funding relief into schools. But early indications are that the draconian budget cuts being pursued by the state and in many localities will not be necessary. Lawmakers in the General Assembly are revising the state’s two-year budget to reflect the federal aid, and the executive director of the Virginia School Board Association, Frank Barham, this week advised school board members to “implement no RIF policies, amend, or adopt new budgets” until more guidance from the state is available.

ARRA is a breathtaking injection of resources just when schools need it most. According to one estimate, the bill will provide an average additional $870 per pupil nationally over the next two years. And it will create or save 267,355 teaching positions and an additional 40,000 instructional staff this year.

The work your Association accomplished in the past year—particularly, helping elect a pro-education president and lobbying tirelessly for a fair state education budget—made a world of difference. For example, Association members nationwide sent more than 56,000 e-mails to Congress supporting a funding boost for schools. And the scope of school relief was hardly assured during debate on the package. At one point, Senate negotiators were considering a version of the bill that wiped school funding completely out until fierce lobbying by the Association and other groups helped put it back in.

Education Highlights of ARRA

According to a National Education Association analysis, these are some of the highlights of ARRA for public education:

• ARRA includes $787 billion in overall relief, including $575 billion in spending and $212 billion in tax cuts.
• The bill contains $130 billion in education and related programs; $96.76 billion of that amount will pass through the U.S. Department of Education. To put that extraordinary figure into context, the department’s current budget is $59 billion. And the federal government’s share of K-12 education spending, which has hovered around nine percent of the total education dollar for as long a most can remember, would rise to between 14.8 and 15.5 percent if the funds are split evenly over the two years.
• States will benefit from $53.6 billion designated for “state fiscal stabilization,” in other words, to shore up state budgets that otherwise are being cut due to the economic downturn. Of that amount, $39.5 billion is specifically targeted to public school districts and public higher education institutions. The U.S. Department of Education is working on guidelines and hopes to roll out half of that money to states within 40 days. Virginia is expected to receive $1.2 billion from the state stabilization fund.
• The bill includes, beyond what Congress already has appropriated, $13 billion to support Title I programs and $12.2 billion for special education. These are tremendous increases aimed at students who need it most.
• School construction and modernization projects will benefit from the bill’s $22 billion in tax credits.
• Efforts to help children prior to school age will reap benefits from increases of $1 billion for Head Start and $1.1 billion for early Head Start

For the latest of the ARRA and its effects, go to www.nea.org/lac and www.veanea.org. The White House also has a web site to track the stimulus plan at www.recovery.gov.