The Wall Street Journal
March 4, 2010, 3:26 P.M.

By Neil King, Jr.

WASHINGTON—The Obama administration has picked 15 states and the District of Columbia as finalists to win billions in federal education funding, part of a high-stakes bid to pressure local educators to shake up underperforming schools.

The states could win as much as $900 million each, depending on their size, at a time when many local education budgets face deep funding shortfalls. The number of actual winners, set to be announced next month, is expected to be far smaller, possibly as few as five.

The states that move on to the next level are Colorado, Delaware, Florida, Georgia, Illinois, Kentucky, Louisiana, Massachusetts, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina and Tennessee.

The number of finalists is higher than foreseen by outside experts, many of whom predicted that the administration would try to send a message to the states that it planned to reward only those states pushing hardest for change.

The list of finalists will bring disappointment to dozens of other states, many of which spent millions of dollars on private consultants to compete for the cash under the administration's $4.35 billion Race to the Top program.

A total of 40 states and the District of Columbia submitted applications in January for the first round of funding. Winners will be announced in April.

President Barack Obama has promoted the program as a way to push states and school districts to improve local education standards. The idea is to reward states that show the greatest willingness to overhaul failing schools through measures such as tough testing standards, data-collection and teacher training.

The Department of Education turned to a panel of 58 outside judges to pick the finalists and winners according to 19 criteria, including the state's track record, openness to charter schools, and systems to judge teacher performance.

Independent evaluators have given especially high markets to Florida, Tennessee and Louisiana for their accountability standards and for implementing systems to track student performance. All three have also pushed to expand the growth of charter schools, which are publicly funded but independently run.

Education Secretary Arne Duncan and his team have worked to keep the selection process as free of politics as possible. Congress, the states, and even the White House were not told who made the cut until Thursday morning.

Mr. Duncan has won bipartisan support for Race to the Top, but that could change as lawmakers and governors realize only a small minority of states may emerge as winners.

Write to Neil King Jr. at neil.king@wsj.com