American Jobs Act: Education Provisions Summary

On September 8, 2011, President Obama proposed the American Jobs Act before a special joint session of Congress.   The $447 billion package is a combination of tax cuts, infrastructure spending and fiscal relief.   A major component of the American Jobs Act included spending in education programs and school construction.

 

Teacher Stabilization Funds

The President’s proposal includes $30 billion in education jobs funds, estimated to save 280,000 jobs in K-12 education.   The funds are intended to prevent teacher layoffs and support additional jobs in public early education, elementary and secondary education in the 2011-2012 and 2012-2013 school years.   Before distributing this money to the states, the U.S. Department of Education will reserve one-half of one percent for outlying areas[1] and one-half of one percent for Bureau of Indian Education schools, and may reserve up to $2,000,000 for administration and oversight, including evaluation. Governors must apply for the funds within 30 days of the enactment of the American Jobs Act, and each approved application will receive a grant.    If a Governor elects not to apply, another entity or entities in the state can apply but the Governor will still have to provide an assurance the maintenance of effort requirements will be met (see below). There is a provision allowing half the funds to be awarded if there is a determination that the state will meet the maintenance of effort for 2012. States will receive 60% of their funds based on the states relative population of individuals aged 5-17, and 40% of their funds based on their relative total population. An annual report will be required that contains how the funds were expended or obligated, and an estimate of the number of jobs supported with the funds. Funds cannot be used to establish, restore or supplant rainy day funds, or supplant state funding to have that effect, or to reduce or retire debt obligations.   Funds must be obligated by September 30, 2013.

There is a state maintenance of effort requirement. It can be waived by the Secretary because of exceptional circumstances such as a natural disaster, or a precipitous decline in the financial resources in the state. For state fiscal year 2012, the state must:

  • Maintain state support for early childhood, elementary, and secondary education (in aggregate or on the basis of expenditure per pupil) and for public institutions of higher education (not including capital projects, research and development, or tuition and fees) at not less than the level for state fiscal year 2011; or
  • Maintain state support for early childhood, elementary, and secondary education and for public institutions of higher education at a percentage of the total revenues available to the state that is equal to or greater than the percentage provided for the state fiscal year 2011.

And for state fiscal year 2013, the state must:

  • Maintain state support for early childhood, elementary, and secondary education (in the aggregate or on the basis of expenditure per pupil) and for public institutions of higher education (not including capital projects, research and development, or tuition and fees) at not less than the level for state fiscal year 2012; or
  • Maintain state support for early childhood, elementary, and secondary education and for public institutions of higher education at a percentage of the total revenues available to the states that is equal to or greater than the percentage provided for state fiscal year 2012. 

States can reserve not more than 10% of grant funds for state-funded early education programs and not more than two percent for administrative costs. The states will make grants to Local Education Agencies (LEAs). The funds will be distributed based on an LEA’s relative share of enrollment (60%) and on the basis of an LEA’s share of funds under Part A of Title 1 of the Elementary and Secondary Education Act.

The legislation does not include provisions that would make receiving these funds contingent on states enacting Administration education reform measures, a departure from education jobs funding in the American Recovery and Restoration Act, or education funds in Race to the Top.

 

School Modernization

The American Jobs Act includes $25 billion in school infrastructure spending, estimated to modernize 35,000 schools. Funding is intended for emergency repairs/renovations, green projects, energy efficiency, asbestos removal, and technology upgrades.   Before distributing this money to the states, the U.S. Department of Education will reserve one-half of one percent for Bureau of Indian Education schools, one-half of one percent for outlying areas, and such funds as necessary for a survey by the National Center for Education Statistics of school construction, modernization, renovation and repair needs. The money that will then be distributed is divided into two pots:

  • Pot A (40% of the funds) to the 100 LEAs with the largest numbers of children aged 5-17 living in poverty in proportion to their respective Part A of Title 1 of the Elementary and Secondary Education Act.
  • Pot B (60% of the funds) for grants to states to distribute.

Of the Pot B funds (the grants to states), states will allocate at least 50% to LEAs (including charter schools that are LEAs) based on their allocations under Part A of Title 1 of the Elementary and Secondary Education Act, and will allocate any funds remaining to LEAs to support projects the state determines are most needed, with priority given to rural areas.

The funds may not be used to supplant other federal, state and local funds that would otherwise be expended to modernize, renovate, or repair eligible facilities. Funds may not be used for new construction, payment of routine maintenance costs, or modernization, renovation or repair of stadiums or other facilities primarily used for events at which admission in charged to the general public.

An additional grant program of $5 billion will be available to grants to states to modernize, renovate or repair existing facilities at community colleges. These funds will be allocated to states with approved applications based on enrollment.

 

For additional information, please contact Lee Posey (lee.posey@ncsl.org) or Michael Reed (michael.reed@ncsl.org) or call NCSL’s D.C. office at (202) 624-5400.



[1] United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands