Nine states and the District of Columbia have emerged as winners in Round 2 of the closely watched Race to the Top competition, the Department of Education’s innovative – and controversial – competition to reward reform efforts.

Together, they were competing for $3.4 billion available in federal funds.

In order of their rank, the winners are Massachusetts, New York, Hawaii, Florida, Rhode Island, D.C., Maryland, Georgia, North Carolina, and Ohio.

“We funded as many states as we could [until we] ran out of money,” said Education Secretary Arne Duncan in a press call with reporters, noting that just a few points separated some of those states who failed to make the cut from the winners. “I can’t overstate how strong the applications were in the second round.”

Still, the big news among many education experts was who lost – particularly Louisiana and Colorado, widely considered leaders in education reform with priorities that are strongly aligned with those favored by the administration. And some of the winners – including Maryland, Ohio, and Hawaii – raised eyebrows, as well.

“What’s really going on in these states and the degree of sincerity of their reform convictions, I don’t think has made it through these review decisions,” says Chester Finn, president of the Thomas B. Fordham Institute, an education think tank. “I don’t think there’s a truly reformist bone in the body of the Hawaiian public education system.… You’ll find more going on in Nebraska.”

Mr. Finn, like others, was glad to see reform leaders like Florida, which has imposed tough accountability measures, and D.C., which has implemented a controversial teacher evaluation system, be rewarded. But was stymied by the omission of Louisiana and Colorado. A Fordham study of reform-minded cities released Tuesday ranked New Orleans – widely regarded as a hotbed of reform with its Recovery School District – as No. 1, and had Denver as No. 4.

Colorado, in particular, had passed a major law around teacher evaluation in Round 1, but finished in 17th place. And Louisiana, widely regarded as a leader in reforms, lost 12 points on the teachers and leaders section of their application since the state was graded in Round 1, despite strengthening that section by passing a new law to evaluate teachers based in part on student achievement.

“I have to scratch my head and wonder why,” admitted Paul Pastorek, Louisiana’s superintendent of education. “But at the end of the day, that is the process, and we’ll live with it.”

Louisiana, he emphasized, will still work to implement the reforms in its proposal.

Mr. Pastorek sounds at peace with the results, saying that “the Race to the Top process has moved all of us significantly down the pathway [to reform],” but others are more skeptical about the quality of the peer review process.

“You are hearing a lot of quiet grumbling about [the results],” says Andrew Rotherham, a cofounder and partner at Bellwether Education, which advised some of the states on their applications. “I think it’s pretty amazing that New York went from not even meeting the basic criteria to finishing No. 2.”

While Mr. Rotherham says he’ll wait until he sees the scoring, which will be available Wednesday, he tends to think that it was skewed by the same problem that occurred in Round 1, which saw some uneven scores that weren’t always in line with the goals of the administration. In that round, just two states – Delaware and Tennessee – won.

The department made the process as transparent as possible, posting all applications, scores, comments, and videos from the presentations of the finalists, a decision that helped bypass criticisms of political favoritism, but left little room for discretionary judgment.

“They’re damned if they do and damned if they don’t,” says Rotherham. But the problems that that peer-review process can introduce, he adds, means that “people who were initially favorably inclined toward supporting more competitive grants are starting to reconsider that.”

With the Round 2 winners announced and the money largely claimed, the future of Race to the Top is uncertain.

Secretary Duncan has asked for another $1.35 billion in next year’s budget, and plans to open it up to individual districts to apply, but there is no guarantee that Congress will approve the money.

Race to the Top has been controversial among critics who charge that the reforms it encourages – including charter schools, merit pay, school turnaround strategies, and teacher evaluations linked to student achievement – are not necessarily the right ones or based on evidence. Some see it as a federal intrusion into state policy, and others are critical of the competition aspect of the program, with money ultimately going to just a handful of states.

But among proponents, even those who are baffled by some of the winners and losers, the program has been a highly successful way to leverage widespread reforms with a relatively small amount of money. Forty-six states, plus D.C., applied over the course of the competition, and 34 states changed laws to make themselves more reform-friendly.

“We’ve noted more political activity around education reform in the last 12 months than we saw in the last decade,” says Joe Williams, executive director of Democrats for Education Reform. “This gave a green light to reformers all over the country to really push some ideas that hadn’t gotten a lot of traction in the past… I think you can only argue that this has been a smashing success.”