Maryland and D.C. schools are one step nearer obtaining a share of $3.4 billion up for grabs from the U.S. Department of Education.

The two jurisdictions are among 19 finalists in the federal Race to the Top competition, designed as an incentive for school systems to adopt reforms du jour, such as laws more friendly to charter schools and tying teacher evaluations to student performance.

Analysts have speculated that D.C. Chancellor Michelle Rhee’s recent firing of 302 “ineffective” school employees will earn points with Race to the Top judges. In Maryland, Gov. Martin O’Malley’s Education Reform Act of 2010 passed the state legislature earlier this year, which among other things lengthened the time required before teachers earn tenure.

Two states — Delaware and Tennessee — shared $600 million awarded in the first round of the competition earlier this year. Finalists for the current second round beat out 17 other states. U.S. Secretary of Education Arne Duncan has not indicated how many winners will be chosen overall.