The American Recovery and Reinvestment Act (ARRA) has a lot to say about the value of education. Now the question is how Minnesota will get the most value from its share of the money.

Nearly 13 percent of the overall federal stimulus package — about $100 billion — is directed to education. That amount is nearly double the U.S. Department of Education's annual budget.

The newly minted secretary of education, Arne Duncan, appears ready to be a prudent steward of these unprecedented dollars. Secretary Duncan has built in several methods for establishing transparency, accountability and results. When applying for ARRA funds, state governors must specify how they will address key reforms, provide baseline data, demonstrate record-keeping and transparency, plan for improvement and provide evidence of progress.

Around half the stimulus money ($53.6 billion) is in State Fiscal Stabilization Funds (SFSF) directed at keeping and restoring education-related jobs. This is a wise move. Adding unemployed public sector employees on top of unemployed private sector employees is no help to our current economic situation. These stabilization dollars will first be used to back fill any cuts in K-12 and higher education that states have had to implement. 

About $25 billion is directed at increasing special education/IDEA ($12 billion) and Title I ($13 billion), which will be allocated over the next two years. These additional funds nearly double the federal government's current allocation to these programs. The remaining $36 billion or so will be distributed through federal government formulas and higher education tax credits and Pell Grants.

Pawlenty budget: What it doesn't do that federal stimulus does
What this means for Minnesota, according to the latest release of figures on state allocation (PDF), is that our state stands to see $1.135 billion dollars in federal aid — about three times what we received in 2008. The bulk of this will be $816 million in new money for state stabilization, which will go through the governor's office. Another $200 million will go to special education, and about $95 million will be distributed to local districts in the form of Title I aid.

U.S. governors are increasingly driving their state education agendas. The ARRA money creates a new tension between the governor's office and the federal role, since the state fiscal stabilization funds are received based on a governor's application — which would likely reflect the governor's agenda. 

Gov. Pawlenty has already spelled out his education agenda in his budget proposal, "Transforming Minnesota's System of Education" (PDF) He calls for: transforming the system of education; recruiting, retaining and retraining effective teachers; and utilizing innovations for improving student achievement. And, he has asked for $188 million in additional dollars from the legislature to advance his agenda.

While we welcome his affirmation that our economy will increasingly be dependent on skilled workers and his move to invest more in our state's education systems, there is not much of this modest amount directed at Minnesota's students.

Instead, the governor will assign the majority of his "transformative" dollars to testing and professional development for teachers and principals.

So, what about our students? Less than $10 million (about 5 percent) would go directly to students — in the form of a summer school program for 8th graders struggling in math.

Some important areas of investment are missing from Gov. Pawlenty's new budget:

• Readying young children for school success — even though we know we get the greatest return on our investment by starting early, and by starting early we increase the likelihood of students reading well by the end of third grade.

• Providing rich learning environments in and outside school that challenge student thinking, promote learning by doing, provide higher-order thinking skills and develop engaged learners and engaged citizens.

• Encouraging best practices in curriculum that have proven to move students from below proficiency in math, reading and science to above average and college-ready.

Minnesota should be thankful that the federal government is providing crucial supplementary aid to support the governor's agenda with funds for teacher effectiveness, funds for data systems that track student progress over time, and funds for raising standards that are aligned with higher quality and meaningful assessments.

But those investments don't very directly address these realities. One fourth of Minnesota's students are not proficient on the MCA–II in third-grade reading. Almost half (46 percent) are not proficient in eighth-grade math — even though No Child Left Behind requires that all students take and pass Algebra I in eighth grade by the year 2013. And what of the 34 percent of Minnesota's students who need remedial instruction in their first year of post-secondary education — costing the student an additional year of high-rate tuition, plus moderate state aid to fund the classes?

It is clear that the governor's budget aims at holding the education system accountable for outcomes. But where is the investment in Minnesota's students that will have a strong impact on those outcomes?

What districts can do
Local education agencies and districts can make the most of unbudgeted ARRA stimulus dollars by making discretionary use of Title I monies to invest in best practices shown to improve student outcomes.

Growth & Justice has worked with state and national scholars and economists to develop a list of proven and promising practices that "work best at the best price." (See table here.)

These will move the needle by addressing the whole student — in- and out-of-school, from 3 years old to the end of high school, and encompassing social and financial as well as academic needs.

In this list, educators may see practices they have already established in their districts and would like to expand, or practices they have wanted to implement but have not had the funding to do so. We hope educators will act swiftly, judiciously and with student improvement in mind as they move to take advantage of this historic opportunity to "reinvest" in our students.

Angie Eilers is the research and policy director at Growth & Justice, on whose website this article first appeared.  A nonpartisan advocate for fair taxation and smart public investment, Growth & Justice believes a sustainable economy provides the foundation for a just society.