The Stimulus Plan In Perspective

GA sent out some documents regarding the federal stimulus plan (the American Recovery and Reinvestment Act of 2009) that just passed.

To give you some perspective on the amount of money in the plan:

* School Aid Fund revenue (without the federal stimulus) is projected to be $11.4 billion in 2008-09.

* The projected deficit in the School Aid Fund for 2009-10 is $164 million.

* The Governor's K-12 budget for next year cuts $164 million in K-12 spending, mostly through a $59 reduction in the foundation allowance.

The American Recovery and Reinvestment Act of 2009 would provide $1.6 billion over the next two years for education related "State Fiscal Stabilization." The goal of the Congressional plan is to prevent large reductions in state spending for education.

States will have some discretion in spending this money on education, but there is certainly enough money in the plan to more than offset the projected $164 million shortfall in the School Aid Fund.

We may have to make sure that the Michigan Legislature does the right thing with the money and does not funnel other money from the School Aid Fund to other departments.