What is the state fiscal stabilization money?
Congress designed the State Fiscal Stabilization fund ($53.6 billion nationally) to prevent reductions in critical education and other services. The Recovery Act divides that funding into three parts: (1) $48.6 billion for basic stabilization funds; (2) $4.35 billion for state incentive grants; and (3) $650 million for local education agency innovation grants.

How much money is Washington state receiving?
The preliminary estimate is $1 billion. Of which 81.8% is for education ($819.9 million) and 18.2% is for other government use ($182 million).

When will these moneys be available?
While we believe these moneys will be available within the next few weeks, we have not yet been told an exact date.

How long are these funds available for?
Funds must be obligated within 2 years of receiving the grant.

What must the Governor use these funds for?

• The Governor must use 81.8% of the funds received to restore state support for elementary, secondary, and postsecondary education to the 2008 or 2009 level (whichever is greater). If the Governor determines there is insufficient funding to meet the desired level, then the Governor shall allocate the funds in proportion to the relative shortfall.
• 18.2% shall be reserved for public safety and other governmental services, which may include assistance for elementary and secondary education and public institutions of higher education for modernization, renovation, or repair of public school facilities and institutions of higher education facilities, including modernization, renovation, and repairs that are consistent with a recognized green building rating system.

What process must the Governors use to obtain these funds?
The Governor must submit an application to the Secretary describing how the state intends to use the fund, and providing baseline data, and assurances, including assuring actions to improve teacher effectiveness, develop longitudinal data systems, improving academic standards and assisting struggling schools.

Will there be an application process for these funds?
We don’t know, however an application process is likely. Our current understanding is that the use of these funds will have to be tracked, as well as the impact of these funds (i.e. how many jobs were created/saved). If an application is required, we expect this would be through the iGrants system.

We will work to minimize this process, and will advocate that the state be able to develop the application on behalf of districts.

What may LEAs use the basic stabilization funds for?
Any activity authorized under ESEA, IDEA, the Perkins Act, or modernization, renovation, or repair or public school facilities. No funds are available for capital projects unless authorized by the ESEA, IDEA, the Perkins Act or the Adult and Family Literacy Act. LEAs may not engage in school modernization, renovation, or repair that is inconsistent with state law.

Do Maintenance of Effort and Supplanting requirements apply?
This State Fiscal Stabilization Fund includes a Maintenance of Effort provision that may be waived or modified under certain conditions. There is no supplement not supplant provision applicable to fiscal stability funds.

However, the Recovery Act provides in section 14012(d) that, with the prior approval of the Secretary, a state or LEA that receives funds used for elementary, secondary, or postsecondary education as non-federal funds for the purpose of maintenance of effort requirements under any other program (such as Title I-A, ESEA and IDEA).

OSPI intends to apply for this waiver.

What is the maintenance of effort (MOE) requirement?
The state will, in each of FY 2009, 2010, and 2011, maintain state support for elementary and secondary education at least to the level of such support in fiscal year 2006. The state will, in each of FY 2009, 2010, and 2011, maintain state support for public institutions of higher education (not including support for capital projects or for research and development) at least at the level of such support in FY 2006.

Who should I contact if I want more information?
SFSF questions: State.fiscal.fund@ed.gov

State Fiscal Stabilization Fund Program (PDF): Guidance from the U.S. Department of Education