Education Committee: Wed., Feb 18: Federal "stimulus and stabilization"

Commissioner: Fed stimulus will restore 2009 curtailment cuts

Stimulus

Commissioner: "good news"

Yesterday afternoon, Governor issued executive order explains about distr. of Federal funds to Maine.

Gov's Briefing memo:

Components:
State Stabilization funds $53.6B

Not going to give exact Maine dollar amounts

Timeline: tomorrow USDOE will begin notifications

Nationally, ~$240million for K-12 83M for higher ed.

$39.5B distributed through existing state and federal formulas

Requires that state's restore funding to 2008 or 2009 funding levels (for state as a whole). Will be able to restore 27M cut in curtailment order.

Remainder can be used to supplement 2010 spending.

Strings attached

Stimulus funds come with significant additional reporting requirements.

EPS will be basis of distribution

Funds will be applied using EPS formula. Restored to what the funding levels would have been for 2009.

Expect total perhaps $160M. Total shortfall over three years (K-12 + higher ed) about $250M (according to funding law prior to Oct 2008 to reach commitment 55% of EPS)

First applied to K-12 curtailment, then balance to higher ed and projected shortfall for next years state funding.

After 2012....?

...Fed stimulus funds suddenly -- "runs off a cliff"

Trick is...

...how to meet stimulus requirements of maintaining staff and not face same problem when funds run out in 2012.

Checking to see how funds can be applied for one-time investments such as improving energy efficiency.

More strings....

Accelerates requirement to meet NCLB benchmarks

New partnerships stimulated

Additional $650M of federal funds to be distributed to develop partnerships. Details and guidance still unclear.

Fiscal impact

of additional reporting requirements will require some additional staff at DoE.

merit pay

$200M of federal funds additional for implementation (or studies?) of performance-based "alternative compensation".

Reorganization Savings

A while ago, Rep. McFadden asked if the reorganization "savings" from 2 years ago ($36.5 million) might be reinstated. The Commissioner said "no" because those fiscal years have already gone by and the budgeting process is for 2009, 2010, 2011.