Ky. gets formal approval on stimulus money - WDRB 41 Louisville News

Ky. gets formal approval on stimulus money

Kentucky's plan of tapping federal stimulus money to help manage the state's financial crisis got a formal go-ahead on Monday.

State officials announced Kentucky has been approved by the U.S. Department of Education for $651 million in state fiscal stabilization funds. The money was included in Kentucky's plan to offset an estimated $1 billion shortfall in the fiscal year that began this month.

"We are pleased with the approval of Kentucky's application for these much-needed funds," Beshear said in a statement. "It's important to understand that these are not extra dollars.

Kentucky lawmakers met in a special session Beshear convened earlier this summer to address an approximately $1 billion budget shortfall expected in the current fiscal year that started on July 1. As part of the fix, lawmakers approved a plan that relied on about $741 million in federal stimulus money along with various cuts to government services.

Officials will be using $358 million for education in the current fiscal year. Kentucky will tap the remaining $293 million in the fiscal year that begins next summer.

Lawmakers earlier this year had already handled a $456 million budget shortfall in fiscal year 2009, which ended on June 30, with budget cuts and tax increases on alcohol and cigarettes.

Beshear said the federal money is important for the state to at least not cut classroom funding for education. Officials are using a blend of state and federal stimulus money to guarantee schools get base funding of $3,866 per pupil.

Federal stimulus money may be used to make various improvements such as establishing tracking systems to follow pupils' progress and providing support and interventions for the worst performing schools. Money, however, may also be used to pay teachers' salaries to avoid layoffs, according to a release.

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