The American Recovery and Reinvestment Act is clear: States are on the hook for advancing education improvement goals spelled out in the law as a condition for receiving up to $100 billion in economic-stimulus aid to education. But school districts are the ones that must decide how to spend most of that aid--including hefty, one-time increases for Title I and special education funding--and tensions already are starting to emerge. Take the Phillipsburg, N.J., school district, for example. The 3,500-student system had hoped to use roughly $150,000 in special education stimulus funds for technology to better track students' records, including individualized education programs, and to keep better tabs on students' nutritional choices in the school lunch program, among other uses. But the state, which had final approval over the use of that money, rejected the district's proposal because it didn't seem clear that all of the proposal would benefit special education students, said Beth Auerswald, a spokeswoman for the New Jersey Department of Education. Phillipsburg is permitted to reapply for the special education funding later in the year. But William A. Bauer, the district's business manager, said he could have used clearer guidance from the state about what it was looking for.