What Is Impact Aid?
Impact Aid is a Federal education program that reimburses school districts for the lost revenue and additional costs associated with the presence of nontaxable Federal property. Because most public school districts are funded largely through local taxes and fees, and because Federal land is exempt from taxation, as are many of the businesses and facilities located on that land, districts are containing Federal property are at a financial disadvantage in funding their schools.
Examples of Federal Impaction
- Military installations
- Indian Trust, Treaty and Alaska Native Claims Settlement Act (ANCSA) Lands
- Federal low-rent housing facilities
- Federal properties such as national parks and Army Corps of Engineers projects and Federal facilities such as national laboratories and VA hospitals
The Basics of Impact Aid
The Impact Aid Program, signed into law by President Harry Truman in 1950, is the nation’s oldest K-12 Federal education program. Nationwide, approximately 1,200 school districts enrolling more than 11 million students benefit from Impact Aid funding, which is appropriated annually by Congress. The program has not been fully funded since 1969.
The Impact Aid Program is the only K-12 Federal education program that is not forward funded. This means a delay in appropriations – caused by a Continuing Resolution (CR) or a government shutdown – has an immediate impact on Impact Aid recipient school districts. Without a payment early in the school year, some districts may have difficulty funding day-to-day operations, instructional expenditures, utility payments, or payroll.
Impact Aid funding is direct, locally controlled and flexible. All Impact Aid funds appropriated annually by Congress are disbursed directly to school districts – bypassing state involvement. They can be used for any general fund purpose, such as instructional materials, salaries, transportation, technology or capital needs. All decisions on how Impact Aid funds are spent are made locally. This flexibility and local control allows school district leaders to target funds supporting all students wherever the needs are greatest.
Each school district must submit an Impact Aid application annually to the U.S. Department of Education. The application deadline is usually January 31. The Department reviews the applications and processes payments based on Congressional appropriations each fiscal year (October 1 – September 30). The Department allocates funding in multiple installments until all available funds are distributed. School district applications are audited, on average, once every five years.
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