Today the U.S. Department of Education announced the finalists in the first round of the Race to the Top competition, and New York is among them. This keeps the Empire State in the running for up to $700 million in much-needed funding.

That’s huge. And nobody saw it coming.

Don’t start adjusting those budgets yet, though. The real surprise was the size of the field: while most observers expected only a handful of finalists, Duncan named sixteen of them, while rejecting 25 other applicants.

Charter Center CEO James Merriman had this to say:

“Today’s announcement is a credit to the strong reform agenda championed by Commissioner Steiner and the Board of Regents. Being named in the top third of Race to the Top applicants is an important step toward $700 million in much-needed federal funding, but the critical stage is still ahead.

“The President, the Secretary, and the Board of Regents have all called for two reforms that could make the difference in a tight race: lifting the artificial cap on charter schools and providing equity in charter school funding. Since there’s no prize money for finishing in sixteenth place, the state should act quickly to pass these reforms and bolster its chances of winning the competition.”

Full statement here.