Use of ‘rainy day’ and stimulus funds will help Georgia get education grants

Georgia’s use of federal stimulus money to plug holes in the state budget will not impact its chances of receiving highly competitive education grants that will be made available later this year, a governor’s spokesman said.

The state has been tapping its “rainy day” fund to help balance the fiscal 2008 and 2009 budgets. On top of that, it has used federal stimulus money to offset cuts made earlier this year in state funding for k-12 education as well as for some public safety functions.

U.S. Education Secretary Arne Duncan last week threatened to withhold additional stimulus money from Pennsylvania because, in an effort to balance its budget, the state made cuts in education instead of using its “rainy day” fund to fill in the gap.

Chris Schrimpf, a spokesman for Gov. Sonny Perdue, said Georgia has not done this, pointing out that in a recent round of cuts, Georgia’s grade schools and high schools were not affected.

“We have not disproportionately decreased our education budget,” he said. The rainy day fund is the state’s reserves that Georgia has saved up for use during budget shortfalls.

Public schools and colleges stand to receive a large part of Georgia’s $1.5 billion in fiscal stabilization money — part of the federal stimulus package — to offset state cuts.

The stimulus money that Duncan said is at issue is the “Race to the Top” fund: $4.35 billion in competitive grants to states and school districts for innovative programs. Applications for the first bucket of money are due in December, and the money will be awarded the following March. Applications for the second phase are due in June 2010, and the money will be given out in September 2010.

In a letter to Pennsylvania Gov. Edward Rendell, Duncan said the federal government will look at the following things: to what extent the state has increased or decreased its education budget as a percentage of state revenue; and also what the state has done with other stimulus money it received for education.

If a state has disproportionately cut its education budget or has used education-related stimulus money only to backfill budget holes instead of using a rainy-day fund, then “the state’s competitive position to receive the Race to the Top funds and/or other competitive grants may be negatively impacted,” Duncan wrote.

Besides the “Race to the Top” fund, Georgia could stand to receive more than $1 billion in education stimulus money over the next two years. More than $660 million of that money would be coming to local school districts to help low-income and special-education students.

Herb Garrett, executive director of the Georgia School Superintendents Association, said at this point the main concern is showing that the stimulus money is being spent correctly and that the state shows the federal government that it is saving jobs.