... temporarily by ending or cutting back literacy and other programs. One of those affected was the organization Reading Is Fundamental; all the $24.8 million they were getting from the feds was eliminated. You can read their impassioned plea here, and EdWeek has a round-up of the cuts here. Federal spending is, of course, a fluid thing so some of that funding might have come back in the succeeding...
The "America's Most Literate Cities 2008" list has been released by Central Connecticut State University: link. Things like this generally fall into the FWIW/"for entertainment purposes only" category due to the varying definitions of "literate" and so forth. And, some sections of a given city are more "literate" than others, and some cities may be more cohesively "literate" vs certain others...