John F. Hood
President, MCH, Inc.

School districts across the US are beginning to understand the avalanche of money headed their way. A front-page article in the New York Times on Sunday, March 22, entitled “Some Rich Districts Get Richer As Aid Is Rushed To Schools”, discussed the impact of the $80 billion on a number of school districts.

Congress decided to use existing funding formulas to allocate the money, and the states and school districts now know how much they will get. While $25 billion is targeted by poverty level (Title I or NCLB) and to students with disabilities (IDEA), about twice as much, relatively speaking, is untargeted. This is the state stabilization funding, which benefits all school districts. And the formulas used for this money reward school districts that spend more with more money than districts that spend less. This money is intended to preserve educational jobs. Where jobs were in jeopardy, jobs will be preserved. But in states and districts where jobs are not at risk, the money is a gift, and may be spent the way the districts want to (for legitimate educational purposes).

So here’s the point. $25 billion is going to schools with disadvantaged students (NCLB money) and for students with disabilities (IDEA money). These funds will be spent on salaries and educational products and services that are tailored for these special needs. The companies who benefit will mostly be a relatively narrow group that specializes in these markets. But twice as much money will be distributed much more broadly and will be spent on a much more general or unspecialized products. Here’s the real opportunity for B2B marketing companies.

For example, according to the NY Times article, the Uinta County District 1 in Evanston, Wyoming “has enjoyed years of growing budgets. Students attend new or updated schools with plenty of computers; high-tech smart boards have replaced blackboards.” This district will receive $1.5 million in stimulus money. According to the superintendent, Dr. Bailey: “Out of the blue this money has dropped in, and it’s kind of a distraction.”

Your opportunity is to help Dr. Bailey and others like him get rid of his distraction.

CNN obtained a list of the items that were either partially or fully eliminated from the stimulus package by the bipartisan committee. Highlighted below are the cuts that will negatively impact healthcare, education, and technology. In addition to the listed funds, institutions will also be impacted by the $40 billion cut from the proposal for state fiscal stabilization.

• $19.5 Billion – School & Higher Ed Construction
• $2 Billion – Broadband
• $2 Billion – Health Information Technology Grants
• $1 Billion – Head Start
• $600 Million – Title I (NCLB)
• $100 Million – Distance Learning
• $98 Million – School Nutrition

After the Senate votes on the bill, it will go to committee to iron out the differences.

In a town hall meeting in Indiana today, the President discussed the economic stimulus plan, saying “You know, look, it’s not perfect…But it is the right size, it is the right scope…it has the right priorities to create jobs that will jump-start our economy.”

President Obama will address the nation from the White House tonight.