The house and the Senate have overwhelmingly passed the new education bill this week. This bill is the first major change in funding K-12 schools in more than 35 years and represents a 20% increase over last year's budget.

Here are the most significant changes that will affect not only what products and services we will develop in the future, but also how these products and services will be sold and distributed. The "Leave No Child Behind Act of 2001":

• Requires increased student testing and requires schools to narrow the achievement gaps between poor and minority students and their wealthier, white counterparts or risk losing control over their schools' operations. Beginning in the 2005/06 school year, the measure would require every public school student between the third and eighth grades to take state-administered math and reading tests. While states can develop their own tests, the tests will be measured against a national benchmark exam, the National Assessment of Educational Progress (NAEP) which will be taken by a sample of students in each state on a biennially basis.
  
  
• Requires states to set standards for teaching and provide professional development programs for teachers and their aides.
  
  
• Title 1 Part A has been funded through 2007 and changes in the formula for distributing money have been made to ensure that most of the money goes to low-income schools.
  $13.5 billion for fiscal year 2002
  $16 billion for fiscal year 2003
  $18.5 billion for fiscal year 2004
  $20.5 billion for fiscal year 2005
  $22.75 billion for fiscal year 2006
  $25 billion for fiscal year 2007
  
  
• Significantly increases funding for K-3 literacy programs from $300 million in 2001 to $1 billion in 2002. Schools with 15% or more students in poverty will have top priority for receiving these funds on a competitive grant basis.
  
  
• $250 million is included to "fix" school libraries.
  
  
• For the first time, federal funds may be used for private tutoring.
  

At the same time that federal education funding is up, it is important to remember that this funding source accounts for only 7% of total funding to support the K-12 education system. State funding is much more important and due to the recent downturn in the economy, states have been slashing their education budgets for the first time in many years. According to a congressional report Education in Crisis: The State Budget Crunch & Our Nation's Schools, states have cut $10.5 billion from their education budgets between 2001 and 2002.

While more details will be published in the future about these changes in education funding, I would suggest that there are important strategic decisions you need to make now that will help your company take advantage of these new initiatives.

First and foremost, you need to analyze how you are doing business with large urban school districts. These districts will be getting a large part of the new funding and selling to these institutions requires a unique approach.

Secondly, you need to look at your product line. Correlations with state and national standards will become increasingly important. Showing teachers how your products will help raise test scores will be paramount.

and thirdly, it might be time to implement a "test prep" section of your teacher guide.

These are just a few ideas to start thinking about as we approach the New Year, with new challenges and new opportunities.

Happy holidays!

ABOUT THE AUTHOR
This article was written by Carol Ann Waugh, President of Xcellent Marketing a marketing and new business development firm. Xcellent Marketing offers a variety of marketing services to help education and reference publishers increase their sales and profits from; identifying new markets; providing critiques of Web sites and marketing communications such as direct mail, catalogs, space ads, etc., as well as developing effective marketing plans and strategies. Carol is the co-author of i-Tips 2000: The Insiders' Guide to School and Library Marketing and co-editor of The Experts' Guide to the K-12 School Market books published by the Internet Monitor (http://www.internet-monitor.com) Carol can be reached at cwaugh@xcellentmarketing.com or by calling (303) 388-5215.