Expedited American Recovery and Reinvestment Act (ARRA) Funding for Schools

September 16, 2009

The administration has announced that $1.3 billion in State Fiscal Stabilization Funding (SFSF) has been expedited and will be available for California’s school districts, colleges and universities. These funds are part of the second installment of SFSF that states were scheduled to receive later this fall. In May, California received $3.2 billion as the first installment of SFSF. This represents 67 percent of California’s total $4.9 billion allocation. Including the expedited $1.3 billion, California has now received 90 percent of the state’s allocation of SFSF.

Under the American Recovery and Reinvestment Act (ARRA), states facing extreme budget difficulties are allowed to apply for 90% of their SFSF allocation. The ARRA states that the SFSF funding should be applied in proportion to the cuts that were taken in both the K-12 and Higher Education segments. While K-12 took the bulk of the cuts imposed during the February budget, the cuts to higher education were greater in the July budget, and as a result, higher education will receive a greater portion of this and the remaining allocation of SFSF funds. Based on this requirement, it’s estimated that K-12 will receive approximately $354 million and higher education will receive $931 million of the $1.3 billion.

As with the first installment of SFSF, these funds are available from the federal government to help local school districts minimize layoffs and avoid reductions in education programs.

California’s remaining allocation of Title I and IDEA funding is expected to be released later this fall.

What’s Next?

The California Department of Education is working with the Governor’s Office to determine the amount of funding each school district can expect to receive. We will provide more information on the allocation of the funds as it becomes available.