As mentioned here previously, there are special difficulties inherent in dealing with large increases in federal funding for education such as are currently included in the American Recovery and Reinvestment Act, which passed a house vote last week and is now being debated in the Senate. Long-standing administrative regulations regarding federal grants include the "supplement, not supplant rule" and maintenance of effort requirement, both of which make it extremely difficult to use federal funds in instances where state and local funding is dwindling. Florida has an additional problem in that state budget cuts over the past two years have lowered the state's contribution to education so much that Florida would be ineligible to receive the stimulus funding based on current requirements.
In a letter sent recently to Senate Budget Committee Chairman Kent Conrad, the Congressional Budget Office suggested that waiving the maintenance of effort rules and converting some grant programs to a formula basis instead of a competitive basis would assist state and local agencies in moving these federal funds into the economy faster. However, the letter contained no discussion about supplanting funds.
See full letter at http://www.cbo.gov/ftpdocs/99xx/doc9975/01-29-ConradII.pdf
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