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American Recovery & Reinvestment Act 2009

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State Fiscal Stabilization Funds (SFSF) » ARRA Home


Uses of ARRA State Fiscal Stabilization Funds (SFSF)

The State Fiscal Stabilization Fund (SFSF) program is a new one-time appropriation of $53.6 billion under the American Recovery and Reinvestment Act of 2009 (ARRA). Approximately $48.6 billion was awarded to states’ governors by formula under the SFSF program in exchange for a commitment to advance essential education reforms to benefit students from early learning through post-secondary education, including the following: college- and career-ready standards and high-quality, valid and reliable assessments for all students; development and use of pre-K through post-secondary and career data systems; increasing teacher effectiveness and ensuring an equitable distribution of qualified teachers; and turning around the lowest-performing schools.

These funds help stabilize state and local government budgets in order to minimize and avoid reductions in education and other essential public services. The program helps to ensure that local educational agencies (LEAs) and public institutions of higher education (IHEs) have the resources to avert cuts and retain teachers and professors. The program may also help support the modernization, renovation, and repair of school and college facilities.

New Jersey is allocating its State Fiscal Stabilization Fund (SFSF) in the following way:

Approximately $1.057 billion will be used to implement the new school funding formula enacted by the School Funding Reform Act of 2008 (SFRA). About $70.8 million is allocated to higher education. These funds will be used to restore cuts for higher education that were included in the proposed budget for FY 2010. These cuts will be restored if certain conditions, including limits on tuition increase, are met. Furthermore, the increase in funding for Tuition Aid Grants (TAG) proposed in the Governor’s FY 2010 budget will be supported with SFSF dollars.

The remaining $200 million of these funds will be used to offset state costs for FY 2009 and FY 2010. Of that $200 million, $162 million will cover outstanding state costs for FY 2009, and the remaining $38 million will be used as budget relief for FY 2010. It is most likely that these funds will be used for additional Medicaid costs and nursing home costs.

ARRA State Fiscal Stabilization Application Process

ARRA State Fiscal Stabilization Fund Allocations

ARRA State Fiscal Stabilization Guidance Documents

Note: federal guidelines are subject to change and the department will post the most current information as soon as we receive it.