UPDATE: Sen. John Thrasher, the St. Augustine Republican pushing the merit pay plan, says the state can fund his proposal without the federal grant money: “It would have been nice, but the bill is not predicated on whether we got Race to the Top,” he said. “This policy is based on what we think is the right thing to do for the state of Florida.”

Florida came up short in the first round of awards from a $4 billion in federal education fund, but Gov. Charlie Crist said he was encouraged after a conversation today with U.S. Education Secretary Arne Duncan.

“We’re disappointed, but not deterred,” Crist said. “It’s on to round two.”

Florida Board of Education Chairman T. Williard Fair told the St. Petersburg Times that missing out on the cash was “the biggest shock of my professional career.”

State lawmakers were also anticipating the money. The Senate approved a plan last week to base teacher raises on student performance. The $900 million proposal was to supposed to be paid for with money from the federal “Race to the Top” fund.

But Crist said he was encouraged by Florida’s #4 ranking out of 41 states. “It bodes very well for the second round. We’re pressing forward and we’re not giving up,” he said.

Crist brought an entourage of state education officials to Washington D. C. two weeks ago for an intense interview with federal education officials over the state’s application for $1 billion out of the $4.35 billion available in the fund. The total awards for Delaware and Tennessee announced today were a combined $600 million.

Vice President Joe Biden will visit an Orlando middle school on Wednesday to tout Florida’s $3.5 billion share of the economic stimulus package for education.

Biden will be joined by U.S. Education Secretary Arne Duncan. They’re scheduled to appear at Jackson Middle School in Orlando at 10 a.m.

Not all of the money is being spent in schools or on teachers, however.

Florida’s three-year education stimulus cash includes money for school lunch equipment, homeless education, independent living programs and services for older blind individuals.

Perhaps the White House duo will receive a warmer welcome than Congressional members touting the president’s health care package at raucous town hall meetings throughout the country.