On February 1, 2010, President Obama released budget details for fiscal year (FY) 2011. In terms of its impact on states, the budget is most notable for two things. First, it would extend for two quarters the additional Federal Medical Assistance Percentage (FMAP) that was provided in the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5). Currently, the ARRA FMAPs are set to expire after December 31, 2010. Under the proposed budget, they would expire after June 30, 2011.

Second, it includes a major reorganization and refocusing of federal education programs, primarily those funded under the Elementary and Secondary Education Act (ESEA). These changes include a number of program consolidations and eliminations.

This Budget Brief describes these and other major proposals of importance to states. Table 1 summarizes proposed changes in budget authority for a number of major grant programs. The table compares proposed FY 2011 spending levels to FY 2010 and FY 2009 enacted levels.

Under the president’s budget, funding for the discretionary programs listed on Table 1 would increase by 6% in FY 2011 and mandatory program funding would increase by 16%, reflecting the ARRA FMAP extension. The total funding increase across all programs listed would be $60 billion, or 12%.