Published Online: July 27, 2007
Published in Print: August 1, 2007, as Schools Benefit From States’ Strong Budgets

Schools Benefit From States’ Strong Budgets

But with most legislative sessions over, funding increases aren’t universal.

During a 2007 legislative season that opened amid a generally strong fiscal climate, state policymakers continued to make public schools a top priority by showering them with record increases in funding and by expanding early-education programs.

Flush with cash, Oregon and Nevada approved major increases in school aid of 18 percent. Utah topped that—granting schools a whopping 20 percent more in funding for fiscal 2008 than in the previous budget.

And in a policy area that leaders in a number of states have made a priority, Arkansas invested heavily in prekindergarten programs, adding another $40 million to its program and bringing its prekindergarten spending to $111 million. Tennessee boosted its prekindergarten funding by $25 million, to $80 million for the coming school year.

But, in what could prove a cautionary note for future spending, the funding increases were hardly universal, as many states are seeing tax collections level off and the housing market continue to slow. New Hampshire and Rhode Island granted schools little or no increase, while budget cuts could threaten school funding in Michigan, Maryland, and Florida.

“I think there were some pretty good increases,” said Gail Gaines, the vice president for state services of the Southern Regional Education Board, an Atlanta-based group of 16 states that pushes for school improvement. “But some are feeling the slowdown in the economy.”

At least 39 states have wrapped up their legislative sessions; the rest are either full-time legislatures or are embroiled in special sessions. These sessions marked the first since Democrats seized control of a majority of legislative chambers and governors’ offices during the 2006 elections. And several states stand out this year for embarking on bold or unusual education initiatives—the consequences of which won’t be known for months, or even years.

After heated debates in most state legislatures, Virginia became the only state to require girls (with some exceptions) to be vaccinated against the human papillomavirus, or HPV, which can lead to cervical cancer. However, at least 17 states approved a milder form of the legislation, which will require states to educate parents about HPV or provide some funding for the immunizations, according to the Denver-based National Conference of State Legislatures.

Utah enacted the nation’s first universal private-school-voucher program, a polarizing law that opponents successfully fought to place before voters in the November general election, in the hope of getting it repealed. ("Push to Repeal Utah Voucher Law Advances," April 18, 2007.)

Maine shook up its school districts by requiring those with fewer than 2,500 students to consolidate in an effort to streamline administration and save money. That means the state’s 290 school districts would be reduced to about 80. The districts, which are picking their consolidation partners now, are working toward a state-imposed June 2009 deadline. ("Maine Moving Ahead on School Consolidation Plan," June 20, 2007.)

And in Florida, the legislature backed a proposed constitutional amendment, to go before voters in January, that would give property taxpayers a super-sized tax break, threatening the flow of money to schools, since such taxes help pay school district operating expenses. The legislature hasn’t said how it would make schools whole—but it has promised to do so.

Florida Budget Squeeze

District superintendents in Florida are facing a financial double whammy for the coming school year. If voters approve the constitutional amendment—which is part of a comprehensive property- tax-reform package devised by the legislature—schools will have to depend on lawmakers to make up the lost revenue. Estimates for the amendment’s price tag vary, but the lost revenue to all local governments, including cities, counties, and schools, could total nearly $9 billion over four years. The loss to schools alone could approach $1 billion a year.

Legislative Landscape

With most legislative sessions wrapped up, key education initiatives emerged in several states.

Florida: As part of a tax-reform package that gave Floridians their largest property-tax break ever, the legislature approved a constitutional amendment, to be voted on in a January election, that would give property owners even more breaks. Schools, which would lose that tax revenue, are worried that tough budget times mean the legislature wouldn’t be able to come up with enough aid to replace those lost tax dollars.

North Dakota: Legislators and the governor took the rare step of resolving the state’s school finance lawsuit out of court by approving a 13 percent increase in school aid; the plaintiff districts then dropped their suit.

Ohio: In one of the few states to take a big step toward making college more affordable, the legislature and the governor approved a tuition freeze for the next two years and a new $100 million scholarship program for math and science students.

Pennsylvania: Early education continues to be a top funding priority in many states, including Pennsylvania, where the new budget includes $75 million to expand prekindergarten to more than 10,000 youngsters.

Utah: The legislature approved the nation’s first universal privateschool- voucher program, but opponents were successful in putting the question on the November ballot, meaning voters will have the final say.

Meanwhile, Gov. Charlie Crist, a Republican, is struggling to close a nearly $1 billion budget shortfall by the end of the state’s two-year budget cycle in 2009, and has warned all state-funded agencies and programs (including public schools) that cuts of up to 4 percent will likely be needed, regardless of whether the constitutional amendment is approved.

The budget cuts stemming from the existing shortfall alone will mean a loss of $4 million for the 28,000-student St. Johns County district, in St. Augustine, where Joseph Joyner is superintendent.

“The problem with this is these cuts are coming so late,” said Mr. Joyner, who is also the president of the Florida Association of District School Superintendents. “We start hiring teachers in June, so trying to recapture $4 million won’t be easy.”

What’s more, if the property-tax amendment is approved, that will mean another $20 million loss for his district—out of a $200 million operating budget—if legislators don’t replace the money, Mr. Joyner said.

“It could be a hammer. We’re talking about raising class size and no salary increases at all,” he said.

North Dakota avoided a potential school finance quagmire by agreeing in April to increase school funding by $91 million over two years, which prompted several school districts that filed a lawsuit in 2003 to drop their claims.

Rep. RaeAnn Kelsch, a Republican and chairwoman of the House education committee, who spoke at a conference of the Denver-based Education Commission of the States, called the feat—resolving a school finance lawsuit out of court—“monumental.”

Voucher Vote Set

The Utah legislature also overcame some monumental opposition to approve universal private school vouchers, though the fight is far from over. In November, voters will decide whether the new law will stand and whether students will be eligible for vouchers ranging from $500 to $3,000 for private school tuition. While other states have created vouchers for low-income students or those who have disabilities or attend failing schools, Utah’s vouchers would be available to all public school students, regardless of income.

Utah, which became the first state to enact a universal voucher program, wasn’t the only state, however, to approve school choice measures.

In Pennsylvania, the legislature expanded by $16 million its tax-credit program, which gives companies tax credits for their donations to scholarship organizations that in turn provide private-school-tuition vouchers to students. According to the Washington-based Alliance for School Choice, that’s the largest annual dollar increase in the program’s history.

Meanwhile, Georgia became the latest state to create a voucher program for private school tuition for children with disabilities. The Ohio legislature passed a similar bill this year, only to see it vetoed by Democratic Gov. Ted Strickland.

In South Carolina, Gov. Mark Sanford continued to be unsuccessful in persuading the legislature, controlled by fellow Republicans, to enact some form of private school choice—either through vouchers or tax credits.

However, South Carolina became the latest to create a so-called virtual school program that allows students to take courses online, outside of their traditional school settings and boundaries—something that at least 23 other states already have.

“While we certainly have miles to go in terms of creating a system in South Carolina that maximizes choice for all parents and students, this legislation is an important step forward on that front,” Gov. Sanford said in a statement in May, after signing the bill.

But a month later, he vetoed an open-enrollment bill that would have let students cross district lines to attend any public school, within certain restrictions. The governor argued that the legislation didn’t create true choices for families.

Spanning the Spectrum

Coming into the legislative sessions, many policymakers had hoped to make big changes on both ends of the public education spectrum: to expand prekindergarten and make college more affordable. They had mixed success.

While several states enacted legislation to cap increases in higher education tuition, Maryland continued a tuition freeze that was put in place a year ago.

Ohio, meantime, ended a decade’s worth of average annual tuition increases of 9 percent when the state froze college tuition this year for in-state students. In addition, the state created a new, $100 million scholarship program for students interested in mathematics and science. Both were pushed by Gov. Strickland, who was elected last fall. In an interview, he likened the tuition increases to a tax hike on the middle class.

“It was unacceptable,” he said.

States generally were more successful in expanding prekindergarten, especially in expanding the number of children who may participate. In addition to growth in those programs in Arkansas and Tennessee, Pennsylvania added $75 million to its prekindergarten program, while Oregon added $39 million.

But with an economy that could be on the brink of slowing, some policymakers are concerned about whether these investments can survive state budget downturns—especially when the K-12 grades are at the core of states’ education systems.

Joan Lord, the vice president for education policies at the SREB, said that while more states are moving to fund pre-K through the traditional school formulas, several states still use alternative methods. Georgia’s is tied to lottery proceeds, and Arkansas’ to a beer tax. Others are using funds from their share of the 1997 national tobacco settlement.

“It’s all over the board in states,” said Ms. Lord. “The real hope is to get [prekindergarten] as part of the state formula.”

Vol. 26, Issue 44, Pages 16,19

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