Georgia is one of 16 finalists for the U.S. Department of Education's "Race to the Top" competition, which will deliver $4.35 billion in school reform grants.

The Cherokee County School District was one of 23 local school systems that signed on to partner with Georgia's education department in the application.

Georgia is eligible to receive between $200 million to $400 million in the grants, with 50 percent going to the state, and the other half split between the local school systems that signed onto the initiative.

Each school system's share will be determined by the number of Title I students enrolled in its schools. In Cherokee, there are about 11,000 Title I students out of the total population of 38,000.

The winning states will be chosen in April, and a second round of applications accepted in June. At least 10 states will be selected, according to federal officials.

The other finalists selected from a pool of 41 applicants are: Colorado, Delaware, the District of Columbia, Florida, Illinois, Kentucky, Louisiana, Massachusetts, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina and Tennessee.

"These states are an example for the country of what is possible when adults come together to do the right thing for children," U.S. Secretary of Education Arne Duncan said.

The grants are designed to reward states that have adopted and will continue implementing innovative reforms to improve student performance. The money is part of President Barack Obama's economic stimulus law, which provided an unprecedented $100 billion for schools. Much of that has gone toward preventing teacher layoffs and addressing other budget concerns. The $4.35 billion "Race to the Top" fund is targeted specifically for education reform.

Applications were read and scored by panels of five peer reviewers. Those with the highest average score were selected to visit Washington later this month to present their proposals. The Education Department said it expects no more than half of the money to be awarded in the first phase of the competition.

The department asked states to concentrate their proposals on four areas prioritized in the Recovery Act: adopting standards and assessments to better prepare students for careers and college, getting high-quality teachers into classroom, turning around low-performing schools, and creating data systems to track performance.

States also were required to be legally permitted to link student performance data to teacher evaluations.

Critics have questioned the timing, saying the administration is out of touch with state budget needs in putting forward billions in reform at a time when many districts can barely afford basic necessities.

"You can always say now is not the right time for change," said Amy Wilkins, vice president for government affairs and communications at The Education Trust. "But the fact is that improving education is sort of a linchpin in improving the economic health of the country. So we have to do this now."

Questions have also been raised about the department's approach in rewarding states that have a history of past success through education innovation, rather than those now looking to enact reform.

Federal spending accounts for just 10.5 percent of elementary and secondary education funding. And while the "Race to the Top" money is a small slice of the $100 billion in stimulus education funding, observers said it is significant.