GWEN IFILL: Now: Billions of dollars are about to come available in new federal education spending, and states are competing for a piece of the pie. The money, part of the government stimulus package, is designed to give public school systems a leg up. But there's a catch.
John Merrow, the "NewsHour"'s special correspondent for education, explains.
JOHN MERROW: President Obama visited a school in Falls Church, Virginia, today to promote his major education initiative known as Race to the Top. The program offers a shot at new funding. But the president was quick to remind the states that not all of them would win the money.
U.S. PRESIDENT BARACK OBAMA: And it's the competitive nature of this initiative that we believe helps make it so effective. We laid out a few key criteria and said, "If you meet these tests, we'll reward you by helping you reform your schools."
JOHN MERROW: Most states have accepted the challenge. Representatives flocked to workshops held in December, eager to learn the rules of a competition that offers a share of $4.35 billion.
JOANNE WEISS, director, Race to the Top: Most of the Department of Education's funding is -- is formulaic funding. It's funding that Congress gives the department, and we have to give it out on a formula basis.
JOHN MERROW: Joanne Weiss is the director of the Race to the Top.
JOANNE WEISS: This program is a competitive program. The states that win Race to the Top, we're hoping that what they do is show the way to the rest of the country for what could and should happen out there.
NINA LOPEZ, assistant to the commissioner of education, Colorado: Why should Colorado win? Well, because I think well have the best plan.
KATHRYN RADTKEY-GAITHER, undersecretary of education, California: I think that, if California were being judged based on its growth since July, we would certainly get extra points.
RAYNE MARTIN, chief of staff, Recovery School District, Louisiana: Oh, we believe Louisiana is one of the top candidates for this. I mean, we have such exciting reform going on in Louisiana.
JOANNE WEISS: So, you set these criteria.
JOHN MERROW: States will be judged on how ready, willing and able they are to enact four core areas of reform laid out by Secretary of Education Arne Duncan, standards that are on par with those of other nations: better data, so that states can keep track of student growth; putting the best teachers in the worst schools -- that means tying teacher pay to student performance -- and radical restructuring of the worst schools.
ARNE DUNCAN, U.S. Education Secretary: If we have the best and brightest teachers where we need them, if we have great principals, if we have common high standards and great assessments, and then great data systems behind that, if we do these things well, we can make a huge difference in our students' lives. That's what I want to incent.
JOANNE WEISS: We're not telling people in the Race to the Top program how to accomplish these things. We're just saying, great teachers matter, so how are you going to get more great teachers in front of kids?
JOHN MERROW: The application process is complicated. For example, the federal government wants teacher pay tied to student performance. In three states, that requires changing the law. In fact, some states are changing laws and policies just to be more competitive.
Here's another challenge: Washington wants proof that a state plan has local support. Easier said than done. Many local districts and teacher unions do not welcome either federal or state intervention.
LT. GOV. BARBARA O'BRIEN, Colorado: Colorado is a very big state. I have been to every corner.
JOHN MERROW: In Colorado, Lieutenant Governor Barbara O'Brien is leading the Race to the Top team.
LT. GOV. BARBARA O'BRIEN: We are a local-control state. So, you can't just mandate. You have to persuade other districts that they want to be involved. We're only given 60 days to do this. So, the outreach to 178 school districts to explain why we hope they will want to participate is just, for us, a very labor-intensive effort.
Do most people at least know what the Race to the Top refers to?
JOHN MERROW: O'Brien has met with students, principals, superintendents, politicians, union representatives, and teachers, seeking buy-in for the state's plan, which includes new ways to evaluate teachers based on student performance data. Some, like these teachers in rural Pueblo, remain skeptical.
SUZANNE ETHREDGE, fifth grade teacher: I understand it better than I did before today, but there are some definite concerns for me, still.
Making performance pay or alternative compensation strictly tied to test scores such a big part of that, it's a concern. It's a huge concern.
JOHN MERROW: For teachers in Maryland, performance pay was just one of a number of stumbling blocks. Their union is also resisting efforts to rewrite a law that allows for tenure in just two years. This law could jeopardize Maryland's chances of winning.
MARY CARY, assistant state superintendent, Maryland: We're a union state in Maryland, and so the tenure law is -- you know, it is a law. It is not a regulation. And, so, there needs to be a lot of buy-in from a lot of folks to change a tenure law.
JOHN MERROW: Some see the Race to the Top as a continuation of the No Child Left Behind law, and are critical of federal involvement in local education.
BILL BOSHER, NBC-12: They now are saying that states must adopt new federal standards that are lower than Virginia's.
JOHN MERROW: Only one state, Texas, is not participating. But, in some states, it's reported that 40 percent of districts may not sign on, largely because of the opposition of the local teachers union.
Despite pushback, many states, like California, have made changes.
GOV. ARNOLD SCHWARZENEGGER, R-Calif.: We want to be ready when they ask for those applications.
JOHN MERROW: After a long battle in the legislature, California reworked its state law that prohibited using student performance data to evaluate teachers.
GOV. ARNOLD SCHWARZENEGGER: There are other states that are already out there. They have filled out the application. They are already competing for this money, so we want to be out there and be competitive.
JOHN MERROW: Some believe that California's new legislation may be too watered down to assure them a shot at winning. A common concern is that many states are just chasing the money and making promises they may not be able to keep.
But Director Weiss is confident that the department will be able to recognize empty promises. She believes that the Race to the Top is already motivating real change.
JOANNE WEISS: The money obviously matters, and the money is part of how we got people to come to the table and have the conversations. But, then, win or lose, once those conversations have happened, you hopefully are setting in motion a chain of events and a level of sort of commitment and buy-in that's going to persist, whether or not you get the funding.
JOHN MERROW: Weiss has recruited independent judges to review applications. Secretary Duncan will announce the winners in April. The second and final round of competition will take place over the summer.
GWEN IFILL: President Obama candidate today he wants to expand funding for the Race to the Top program. He said he would seek an additional $1.3 billion in next year's budget.