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State Fiscal Stabilization Fund Update to Arizona Association of School Business Officials July 22, 2009. Arizona Office of Economic Recovery. Janice K. Brewer, Governor. Arizona’s Fiscal Crisis. State Fiscal Stabilization Fund (SFSF).

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State Fiscal Stabilization FundUpdate to Arizona Association of School Business Officials July 22, 2009

Arizona Office of Economic Recovery

Janice K. Brewer, Governor

state fiscal stabilization fund sfsf
State Fiscal Stabilization Fund (SFSF)

Pursuant to the American Recovery and Reinvestment Act (ARRA) the U.S. Department of Education allocated $1.017 billion in SFSF monies to Arizona

Funds available in FY 09, 10, & 11 to offset education cuts to K-12 and higher education as well as encourage progress along four reform criteria as stipulated in ARRA

reform criteria
Reform Criteria
  • Develop rigorous college and career-ready standards and assessments
  • Establish Pre-K through college data systems to track and foster performance and improvement
  • Improve teacher effectiveness and the equitable distribution of qualified teachers
  • Provide intensive support and interventions to the lowest performing schools
sfsf has two components
SFSF Has Two Components…

Education Stabilization Fund (82%/$832 M)

The State must use this fund for the support of public elementary, secondary and higher education

Government Services Fund (18%/$185 M)

The State may use this fund for education, public safety, or other government services solely at the discretion of the Governor

distributed in two phases
…Distributed in Two Phases

Phase I:

2/3rds of the SFSF is sent to the State following a relatively straight-forward initial application ($557M)

Phase II:

Remaining 1/3rd will be distributed in the fall of 2009 following a more detailed state application to US DOE ($275M)

rules of the road moe and mandatory restorations
Rules of the Road: MOE and Mandatory Restorations
  • Maintenance of Effort (MOE): State Funding cannot drop below FY 06 funding levels as long as federal funds exist
  • Mandatory Restorations: K-12 and Higher Education must be funded at higher of 2008 or 2009 funding levels as long as federal funds exist
    • For LEAs, the 2009 funding level is higher
fy 2009 restorations 433 m
FY 2009 Restorations = $433 M
  • For FY 2009, the total restorations = $433 M
    • Mandated Restoration for Higher Education for FY 2009 cuts: $183M
    • Mandated Restoration for K-12: $250 M
      • To offset reductions that occurred in the May budget fix for FY 2009
      • Note: No requirement to restore $123 M in reductions from January budget fix for FY 2009 pursuant to the ARRA guidance from U.S. Department of Education
fy 2010 amounts
FY 2010 Amounts = ???

FY 2010 Restoration and Award amounts cannot be determined until budget is final, due to ARRA Shortfall Clause

shortfall clause
Shortfall Clause

In the event that insufficient funds are available to restore all LEAs and IHEs to higher of 08/09 funding levels:

The Governor shall allocate Education Stabilization funds between K-12 and Higher Education in proportion to the relative shortfall in State support

reporting
Reporting

For each year of funding, the state must provide reports regarding the uses, distribution, and effects

of funds received among other requirements

LEAs will be able to meet requirements through use of ADE grant management system

Arizona Office of Economic Recovery has purchased reporting software package to facilitate ARRA reporting. First report due to US DOE on October 10

process phase i step 1
Process: Phase I, Step 1

Apply for funds:

  • Governor Brewer filed an application on May 21 to qualify Arizona for the first two-thirds of the SFSF
  • Arizona’s application was approved on June 4
phase i step 2
Phase I, Step 2

Establish the application process for local education agencies (school districts and charter schools) and institutes of higher education (universities and community colleges) COMPLETED

  • Create the application COMPLETED
  • Establish accounting, transparency and reporting methodologies IN PROCESS
phase i step 3
Phase I, Step 3

Evaluate applications:

The process used to evaluate the applications will be straightforward, with attention paid to accounting and oversight strategies

phase i step 4
Phase I, Step 4

Allocate Funds:

  • Distribute funds to local education agencies and institutions of higher education in accordance with allocation guidelines
  • Inform recipients of reporting requirements including the information mandated for quarterly reports to the U.S. Department of Education
phase ii
Phase II
  • Emphasis will be on education reform following ARRA mandates and guidance from the U.S. Department of Education
  • The U.S. Department of Education will release the guidance and funding application for Phase II later this year
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State Fiscal Stabilization Fund (SFSF)**based on initial application

EDUCATION STABILIZATION

GOVERNMENT SERVICES

Governor issues application for funds

Funds available for ARRA administration and other uses at the discretion of the Governor with certain restrictions and reporting requirements. Available for use in FY 2009, 10, & 11.

$1.017 Billion

Funds available in FY 09, 10, & 11 to offset education cuts to K-12 and higher education as well as progress along four reform criteria as stipulated in ARRA

$185 Million

(18% SFSF)

$832 Million

(82% SFSF)

$433 Million

$399 Million

OSPB

Office of Economic Recovery

  • GENERAL STIPULATIONS
  • The Governor must commit funds before
  • September 30, 2011.
  • For each year the state must provide reports
  • regarding the uses, distribution, and effects
  • of funds received among other requirements.
  • 2/3 of total funds are distributed by the
  • Department following the initial application
  • (Phase I).
  • 1/3 is distributed in FY 2010 after additional
  • information including reform progress is
  • received (Phase II).

FY 2009

FY 2010

K-12

$250 Million

Restore K-12 Funding (greater of ’08 or ’09)

Restore Higher Education

(greater of ’08 or ’09)

Community Colleges

$29 Million

Shortfall Clause:

The Governor shall allocate those funds between K-12 and Higher Education in proportion to the relative shortfall in State support.

Universities

$154 Million

for more information
For more information

Arizona Office of Economic Recovery

www.azrecovery.gov

American Recovery and Reinvestment Act

www.recovery.gov