8/9/2019 GA Letter About ARRA on 4-16-09

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G E O R G I A S C H O O L F U N D I N G A S S O C I AT I O N( F o r m e r l y C o n s o r t i u m f o r A d e q u a t e S c h o o l F u n d i n g i n G e o r g i a )

P. O . B O X 9 0 1 3 AT L A N TA , G E O R G I A 3 1 1 0 6

404/872-9651

April 16, 2009

Hon. Sonny PerdueGovernor of Georgia201 State CapitolAtlanta, Georgia 30334

Dear Governor Perdue:

As you know, local school systems throughout Georgia have already squeezedtheir budgets in FY 09 and are now making drastic cuts for FY 10 because of reductionsin State support. The ability of our schools to provide even the most basic elements of an

adequate education for our students has been seriously impaired.

Nevertheless, there is still a substantial amount of funds that the State of Georgiacould obtain through the American Recovery and Reinvestment Act (ARRA) for use inmeeting the present needs. It is also the clear intent of ARRA that all of the authorizedfunds be requested and used to restore State funding for education as soon as possible.This could be done without affecting any of the other services supported by the State.

In addition to the general maintenance of effort required by ARRA, each statemust use its allocation of Fiscal Stabilization funds to restore, in each of FY 09, FY 10,and FY 11, the level of State support provided through the States primary elementary

and secondary funding formulae to the greater of the level that existed in FY 08 or FY09. A copy of the relevant portion of ARRA is enclosed for reference.

There is no question that the applicable funding formula for the allotments to localschools in Georgia is set forth in the Quality Basic Education (QBE) Act, and ARRAprovides that these allotments should be implemented in accordance with enrollmentchanges and other normal adjustments, including equity and adequacy adjustments, if such increases were enacted pursuant to State law prior to October 1, 2008. The QBEAct meets this test, since it was approved in 1985.

As shown in the enclosed table, the support now being provided by the State toour schools is substantially below what ARRA requires in both FY 09 and FY 10. Whenthe base for restoration is set at the level of funding which existed in the initial budget forFY 09, the deficits are $285 million in FY 09 and $421 million in FY 10.

At the same time, the State has at least $178 million in available funds that havebeen designated exclusively for elementary, secondary, and postsecondary education inthe initial phase of the Fiscal Stabilization Fund for Georgia. There are additional fundsin the allocation for other government services that can also be used for education.

8/9/2019 GA Letter About ARRA on 4-16-09

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As you are aware, ARRA has provided an allocation of $1.541 billion for theState Fiscal Stabilization Fund in Georgia, of which at least 81.8% or $845 million mustbe spent on education. Of this total, 67% is available in the initial phase of funding. TheGeneral Assembly has committed $558 million for K-12 education in FY 09 and FY 10,$93 million for the university system in FY 10, and $15 million for the technical colleges

in FY 10. As a result, $178 million is still remaining in the initial phase for distribution tolocal school systems and institutions of higher education, with the split being based onthe relative shortfall in State support for each of these sectors.

Even though ARRA anticipates that these funds will be requested and disbursedas quickly as possible, the law allows flexibility to local schools in determining how andwhen the funds are spent. For example, a local school system which receives funds basedon a shortfall in FY 09 can use these funds to meet critical needs in FY 10.

The additional funds that are currently available through ARRA would not benearly enough to accomplish the intended restoration or to fulfill the States responsibility

under the Georgia Constitution. There would still be large austerity cuts in addition to thecontinuing impact of inflation on the QBE formula. Nevertheless, these funds wouldprovide urgently needed help to our schools.

We bring this matter to your attention in the hope that Georgia will request anduse the ARRA funds for their intended purpose. We believe this action is necessary tocomply with the provisions of ARRA and protect the allocation to Georgia in the nextphase of the Fiscal Stabilization Fund. It would be consistent with the overarchingprinciples in the law to spend funds quickly and ensure transparency. The fact thatthese funds go to the Governor of each state would avoid the need for a Special Session.

Most of all, the addition of millions of dollars of federal funds would benefit ourstudents by mitigating the cuts that have been imposed for FY 09 and FY 10. There is nocompelling reason to delay the receipt and use of these funds, since they can only be spenton education. They also have to be used in accordance with the letter and spirit of ARRA.In any event, another $416 million would still be available to Georgia in the second phaseof the Education Stabilization Fund for use in FY 10 and FY 11.

The possibility that State revenues might be reduced in FY 11 as a result of recenttax cuts and exemptions makes it all the more important that the Fiscal Stabilization Fundbe used as intended to preserve the funding for our schools instead of simply replacing therevenues which the State would have otherwise received.

Thank you for your responsible stewardship of the States resources for the benefitof all Georgians. We will inform others in seeking their support for this request.

Sincerely,

Joseph G. Martin, Jr.Enclosures