States May Consume Most Stabilization Funds Early

Washington, June 25 — About 40 states have submitted applications to the U.S. Department of Education (ED) as the July 1 deadline approaches to apply for phase-one State Fiscal Stabilization Funds (SFSF) under the American Recovery and Reinvestment Act (ARRA).

In the first phase, approximately $33 billion is earmarked to offset state budget cuts in education, while another $6 billion in flexible funds is available for “other government services,” such as public safety. The latter pot, which is controlled by the state’s governor, may also be used for education. The second and final allocation phase, scheduled for this summer, will provide approximately $16.3 billion for education and $3 billion for other government services.