Here's an article in EdWeek (there was also a similar article in yesterday's NYT: www.nytimes.com/2010/02/08/education/08educ.html) about the funding cliff that's about to hit school across the country (with a nice quote from DFER's Charles Barone). I think it's likely that Congress will allocate some additional money, but nowhere near the previous amount, so hard choices will have to be made. This could, however, make states even more willing to embrace reform to get RttT and i3 (see below) money. The key test will be, when it comes to layoffs, how many districts and superintendents will have the backbone of Michelle Rhee and lay off the worst people vs. doing it strictly by seniority. Sadly, I'd bet my last dollar that it will be 99% the latter, given the firestorm that Rhee had to endure (see http://edreform.blogspot.com/2009/12/ed-reform-ground-zero-in-dc-story-from.html and http://edreform.blogspot.com/2009/12/dismissals-for-dc-schools.html and http://edreform.blogspot.com/2009/12/ms-rhee-on-trial.html).

States and school districts are already bracing for the budget crunch that is almost certain to hit when the up to $100 billion in education aid made available under the American Recovery and Reinvestment Act runs out starting later this year.

Aware that the fiscal picture in most states will likely remain bleak for the next few years, state and local leaders are trying to pinpoint new revenue sources for education, and are seeking ways to trim spending to blunt the impact of the stimulus aid's end—the so-called "funding cliff."

Since much of the funding under the economic-stimulus measure enacted by Congress a year ago was used to fill budget holes at the local level, many students, teachers, and administrators may not have been aware of just how much of a difference the money made in classrooms, said Jack Jennings, the president of the Center on Education Policy. His research organization, based in Washington, has been tracking the stimulus funds.

But educators are almost certain to feel the pinch once the money runs out.

"As the money goes away, it's going to be a pretty rude awakening, because states are not going to be back to fiscal health," said Mr. Jennings, a former longtime education aide to congressional Democrats. "The financial crisis will continue."

Meanwhile, in Congress, lawmakers are already crafting spending bills aimed at helping states and districts weather the coming fiscal storm. It isn't clear, though, whether Congress will be able to pass legislation that includes substantial new funding for education.

And it is also unclear what the continuing fiscal squeeze will mean for the education redesign goals at the heart of the recovery act's school initiatives.

While some $70 billion in money aimed at helping schools avoid layoffs and programmatic cuts had already been awarded to states as of late January, the bulk of the federal funds aimed at transforming education policy over the long haul have yet to be allocated.

That money includes a number of closely watched competitive grants, particularly $4 billion in the Race to the Top program, which seeks to reward states that make strides toward certain education redesign goals, and the $650 million Investing in Innovation, or i3, program, which would encourage districts to work with one another and nonprofit groups on school improvement projects.

…It's too early to know whether the stimulus-financed grant initiatives will result in lasting changes to education.

So far, the Education Department has gotten a lot of mileage out of the Race to the Top program without writing a single check, said Charles Barone, the director of federal relations for Democrats for Education Reform, a political action committee based in New York City that raises money for Democrats who embrace policies such as charter schools and merit pay. States have reworked their laws in areas including data systems, teacher compensation, and charter schools to get an edge in the competition, he pointed out.

But the hard work is yet to come, Mr. Barone cautioned.

"They've gone a long way with the bully pulpit," he said of Obama administration officials, "but awarding grants and enforcing provisions of law is different from dangling a carrot out. There's a much different strategy; it's much more difficult politically."

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