Published Online: December 15, 2008

K-12 Threatened as State Spending Slumps

The first drop in program expenditures in a quarter-century bodes ill for states’ economic future, a new report warns.

In a trend not seen since the deep recession of the early 1980s, state spending on government programs is declining this budget year—a very bad sign for K-12 education.

That’s the dire economic news from the December 2008 semiannual fiscal survey of states Requires Adobe Acrobat Reader released today by the National Governors Association and the National Association of State Budget Officers.

Together, 36 states face existing budget gaps totalling $30 billion, and are already turning to cuts in K-12 education to help close those shortfalls. The $30 billion tally doesn’t take into account $3.6 billion cut earlier this year as 13 states made mid-year trims to their fiscal 2009 budgets.

Overall, state government spending is expected to shrink by 0.1 percent—a seemingly small amount, but negative growth nonetheless that hasn’t been experienced since 1983, when spending shrunk 0.7 percent.

As consumer spending drops, the housing market continues to flounder, and unemployment mounts, states are seeing tax collections in the major categories—sales, income, and corporate—come in lower than estimates, according to the survey.

“Across the board in a large number of states, education is probably going to get hit,” said Raymond C. Scheppach, the executive director of the Washington-based NGA.

What’s worse, officials are predicting that this downturn could affect states for four years before a significant recovery occurs.

“In past downturns, virtually everything faced cuts except K-12; the fact that even now we’re talking about K-12 shows how difficult the situation is,” said Scott D. Pattison, the executive director of the Washington-based budget officers organization.

Education Vulnerable

Though state policymakers generally try to spare K-12 education in tough budget times, it becomes more difficult in a severe recession because public school funding is usually the biggest single expenditure in state government—20.9 percent of all state spending nationally in fiscal 2008. The next biggest category is Medicaid, the state-federal health care program for the poor and those with disabilities, which encompassed 20.7 percent of state budgets last fiscal year.

Already, more than a dozen states have made targeted cuts to education. ("Hard Times Hit Schools," Aug. 27, 2008.) Mr. Scheppach pointed to more K-12 education cuts pending in Alabama, Hawaii, Nevada, Utah, and Virginia.

Cuts in K-12 education are starting to affect programs and curriculum.

Washington state is halting an early education quality rating program that sought to improve child care, for a savings of nearly $3 million, according to local media reports. In Oregon, because of a tight budget, the state is suspending its plans to increase graduation requirements in mathematics to save an undetermined amount of money on remediation and other efforts to help students to meet the higher bar.

Vol. 28, Issue 16

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