School Stimulus

Update on Stimulus Money for School Repairs

In early 2009, Congress set aside $115 billion in stimulus money to support schools. Among the various, new school stimulus programs are 12 different funding sources and another half dozen tax credit bond programs, all of which offer money to K-12 and universities for school construction, renovation and repair. Click here to download a pdf by the National Clearinghouse for Educational Facilities listing "Stimulus Funding and Tax Credit Bonds for School Construction."

State Fiscal Stabilization Fund Money (SFSF)

Almost half of the $115 billion flows through the State Fiscal Stabilization Fund (SFSF) program, which is intended to prevent education budget cuts and to enable school districts to make critical one-time investments, including school repairs.

Click here to view an interactive map of budgeted and distributed grants from the U.S. Department of Education to states for schools. Although originally intended to be released over a two-year period, the federal government now plans to release all SFSF funds by the end of 2009.

As of mid-August 2009, states have received $9.3 billion (19.4%) of the $48.6 billion budgeted for SFSF distributions. Below is a listing of amounts that example states are budgeted to receive in SFSF funds compared to what they have received already.

States and school districts are allowed to use as much of their SFSF allocation as they want for school repairs. School repairs fit the guidance for SFSF spending:

• Maximize short-term investments with lasting results.
• Minimize unsustainable ongoing commitments.

Since only 19% of the SFSF funds has been distributed, the time is now to speak up about accessing the over $39 billion remaining to be distributed before the end of 2009. Use this one-time allocation to upgrade unsafe wired glass in your schools. Click here to hear an NPR story about the opportunities for stimulus funding this Fall.

Qualified School Construction Bonds (QSCB)

A real bright spot for school construction and repair lies in a different part of the stimulus bill called Qualified School Construction Bonds (QSCB). The federal government has allocated $22 billion for school districts to issue bonds on which they do not have to pay any interest. Instead of receiving interest, bondholders receive federal tax credits. Schools save a lot because typically interest rates equal about 50% of the economic cost of a bond. Click here to download an IRS bulletin describing the QSCB program. Click here to see some examples of how school districts are using QSCB bonds to fund school construction and repair.

Facts About Stimulus Money for Schools

• $115 billion of the total $787 billion stimulus package will go to schools.

• Nearly half — $53.6 billion — goes directly to states and local education agencies (LEAs) through State Fiscal Stabilization Funds (SFSF).

• Click here to see where the $115 billion for education can be used.

• The governor of each state applies to the U.S. Department of Education for a portion of the $53.6 billion allocated to states and LEAs. The U.S. Department of Education has vowed to release 67% of the SFSF funds within two weeks after receiving each state's application.

Guidance on using stimulus money for creating safe schools

• The U.S. Department of Education urges states and LEAs to "spend funds quickly to save and create jobs."

• The U.S. Department of Education has issued a lengthy guide defining uses for the $48.6 billion going to states and local educational agencies through the State Fiscal Stabilization Fund Program. Click here to download the pdf.