Yesterday we learned that the Obama administration has proposed $210 million in funding for Promise Neighborhoods in federal fiscal year 2011, which starts October 1, 2010. What else did we learn? Judging by the amount of detail provided, not much. However, if you read between the lines you can surmise quite a bit.
How many Promise Neighborhoods will be chosen? How big will the neighborhoods be? How many children will be served? What is the budgetary and legislative plan for the program? These are serious questions that many people have, especially those doing their best to organize and produce local plans. In the absence of more solid information from the Department of Education, we will need to read the tea leaves.
Let’s start with the plan for the program overall. In the main budget materials from OMB, the new Promise Neighborhoods funding is referred to as a “legislative proposal,” which suggests that the administration will be rolling one out soon. As suspected, the administration appears to be leaning toward including this proposal in the planned reauthorization of the Elementary and Secondary Education Act (ESEA), also known as No Child Left Behind. Unfortunately, although congressional leaders and administration officials met last month to talk about getting ESEA done, the odds are slim to none that it will actually get finished this year. That suggests that there must be a plan B to smooth the way for this new money. Our best guess is that they will find a way to authorize it through the annual appropriations process, which is not the best or usual way things are done and actually caused push-back from Congress on Choice Neighborhoods when they tried that approach last year. But they will do what they have to do.
What about the proposed $210 million for Promise Neighborhoods for 2011? According to documentation from the U.S. Department of Education justifying the request, the new money includes a second round of planning grant money for next year — presumably $10 million just like this year. So now we have confirmation that there will be several (at least two) annual application rounds for Promise Neighborhoods. Like this year, community-based organizations will be the grant recipients.
That leaves $200 million for 5-year implementation grants for the first round (or “cohort” in the department’s terminology) of Promise Neighborhoods that are selected in the next few months. This level of implementation money raises questions.
If we assume that the feds provide 50% of the money for Promise Neighborhoods and the other half is matched locally, that is $400 million. That may seem like a lot of money, but it isn’t when you spread it over 20 neighborhoods over five years: it’s only $4 million per neighborhood per year. By comparison, the Harlem Children’s Zone budget is somewhere around $60-70 million per year. Even if we assume a slow ramp up (HCZ itself took several years to scale up to its current size), $20 million over five years simply isn’t that much money.
If the administration actually went that route, the chosen Promise Neighborhoods would be micro-neighborhoods, just a few blocks in size, or their population equivalents in smaller towns and rural areas. This is not impossible, especially since a few probably will be chosen in rural areas. Overall, however, these numbers suggest a much more likely scenario.
During the campaign, candidate Obama said he would create twenty Promise Neighborhoods modeled on the Harlem Children’s Zone. He didn’t say he would create twenty new Promise Neighborhoods every year. These numbers suggest that the administration plans to ramp up to 20 neighborhoods over several years. Reducing the total in the first year to, say, 5 would bring the spending levels per neighborhood to a more reasonable level. It would also be more in line with the 5-7 neighborhoods per year envisioned for Choice Neighborhoods in HUD’s Choice Neighborhoods budget justification.
That does not necessarily mean that only five or so neighborhoods will be chosen to receive planning grants, which we should find out more about in the next few weeks. It is possible that as many as 20 neighborhoods will receive planning grants, but only a fraction of them will be chosen to advance to the implementation phase based on the quality of their plans.
If we assume around 5 neighborhoods receive implementation money in the first year, what does that tell us? If each of these neighborhoods comes up with a 50% local match, that’s $80 million per neighborhood over five years. Assuming a slow ramp-up, that could take you to a program maybe half of HCZ’s size in a few years time — possibly larger with more local money thrown in the pot. HCZ currently serves about 10,000 children in Harlem at an average cost of around $5,000 per child per year. Using these back-of-the-envelope numbers, a Promise Neighborhood might be able to scale up to $25 million per year by year five, serving around 5,000 children in a given neighborhood. HCZ has suggested that you should reach 65% of the children in the area served, so this also suggests a rough estimate of the size of the average chosen community (one with no more than about 7,000-8,000 children).
One final caveat to keep in mind: these initial funding levels are just the beginning. Then-candidate Obama said Promise Neighborhoods would cost “a few billion dollars a year.” It just may take a few years to get there. If Promise and Choice Neighborhoods money is combined, we are already at nearly a half billion dollars and we are just starting.
Clearly, there is more to learn about these proposals. We will fill in the details as we learn more.