Column: Debate over "Maintenance of Effort" in Stimulus Bill Reflects Softening of Education Department's Position in Tough Economic Times

For over 40 years "maintenance of effort" has been a potent weapon used by state education agencies to caution state legislatures against reducing support for education. A pre-condition of eligibility for state-administered federal education grants required the state to expend at least as much in nonfederal funds for that program in the preceding year as it spent in non-federal funds in the second preceding year. This funding provision is referred to as "maintenance of effort" or "MOE."

Much of the focus today is on the fiscal stimulus bills being considered by Congress. Both the House and the Senate bills require that states that access the stabilization funds maintain fiscal effort at specified levels. The House version does not contemplate any waiver of the MOE provision. The current Senate bill, however, does authorize the Secretary to grant waivers of MOE.

Regardless of the whether the final stimulus bill authorizes the Secretary to grant such waivers, recent department decisions suggest that states may be justified in seeking them due to the current recession.