Published Online: January 5, 2009
Published in Print: January 7, 2009, as Budget Pain Dampening K-12 Efforts

Budget Pain Dampening K-12 Efforts

Governors, State Legislatures Seek Ways to Limit Damage

Governors and state lawmakers are poised to kick off their toughest legislative sessions in years, with the hope of sparing K-12 education from deep budget cuts in the face of mounting deficits—a far cry from the more typical push for new policy initiatives and school programs.

Simply holding the line may prove difficult.

Together, 31 states face existing fiscal 2009 budget gaps totaling $30 billion, and are already cutting precollegiate education to help close those shortfalls, according to the latest semiannual fiscal surveyRequires Adobe Acrobat Reader released by the National Governors Association and the National Association of State Budget Officers.

That total, which is bound to grow, doesn't take into account $3.6 billion that's already been cut this year as 13 states made midyear trims to their fiscal 2009 budgets.

In a trend not seen since the deep recession of the early 1980s, according to the fiscal report, overall state spending is declining this fiscal year—a bad sign for K-12 education, which is usually a signature part of governors' agendas.

Raymond C. Scheppach, the executive director of the NGA, said: "Across the board in a large number of states, education is probably going to get hit."

It already is.

The Ax Comes Down

A number of states already have made or are proposing education budget cuts.

ALABAMA
K-12 schools are getting the biggest cut in nearly a half-century after Gov. Bob Riley proposed a 9 percent cut in public school funding this fiscal year to save the state $800 million.

NEW YORK
Gov. David Paterson has proposed cutting $2.5 billion in education aid from the fiscal 2010 budget, which would mean schools would get $698 million less than they did this school year.

VIRGINIA
To help close a $2.9 billion hole in the current two-year fiscal 2009 and 2010 state budget, Gov. Tim Kaine has proposed cutting $340 million to fund school support staff.

CALIFORNIA
Facing a massive budget gap of $41 billion through mid-2010, Gov. Arnold Schwarzenegger has proposed cutting $2.5 billion from K-12 education this year.

Washington state is halting a quality-rating program for early education that sought to improve child care, for a savings of nearly $3 million, which is just a small chunk of the state's more than $5 billion deficit, according to local media reports.

In Oregon, because of a tight budget, the state is suspending its plans to increase graduation requirements in mathematics. The move had been seen as a way to save an undetermined amount of money on remedial classes and other efforts to help students to meet the higher bar.

And many more states are making deep, across-the-board cuts to general state aid for public schools.

For example, Alabama Gov. Bob Riley, a Republican, has announced an across-the-board cut of 12.5 percent to all agencies—including K-12 education, which has a $2.4 billion fiscal 2009 budget. He'll use rainy-day funds to help blunt the effect on schools, but the cut will still end up being a sizable 9 percent.

"We had some good things going. We were on a roll in increasing test scores. We are doing distance learning and teacher mentoring," said Alabama state Rep. H. Mac Gipson, a Republican and a member of the House education appropriations committee. "We have a lot of good programs that will be cut."

New Faces

In most states, Democratic chief executives will be in charge of navigating the rocky times—and making tough choices, along with state legislators, about what programs get cut and how deep those cuts will be.

After the November elections, which resulted in new governors in Delaware, Missouri, and North Carolina, Democrats control those top offices 29 to 21.

But that margin almost certainly will shift in the Republicans’ favor by one governorship. President-elect Barack Obama has tapped a sitting Democratic governor for his Cabinet: Arizona’s Janet Napolitano as secretary of homeland security. Secretary of State Jan Brewer, a Republican, is line to succeed Ms. Napolitano and give the GOP 22 governorships.

Democrats made inroads in statehouses, too, winning five additional chambers in November to Republicans’ four. Democrats now control both chambers in 27 states, and Republicans have 14 states; the rest are divided, except for Nebraska, which has a nonpartisan unicameral legislature, and Montana, where the House is tied at 50-50.

Though state policymakers generally try to spare K-12 education when budgets are cut, such protection becomes harder in a severe recession. Elementary and secondary education funding is usually the biggest single expenditure in state government—20.9 percent of all state spending nationally in fiscal 2008, according to last month's report from the NGA and NASBO. Just slightly behind is Medicaid, the state-federal health-insurance program for the poor and people with disabilities, which made up 20.7 percent of state budgets last fiscal year.

Overall, state-government spending is expected to shrink by 0.1 percent for fiscal 2009. That may seem to be a small amount, but negative growth hasn't been experienced since 1983, when spending shrank by 0.7 percent, according to the fiscal report.

As consumer spending drops, the housing market flounders, and unemployment mounts, states are seeing tax collections in the major categories—sales, income, and corporate—come in lower than estimates, the survey found. Already, more than a dozen states have made targeted cuts to education.

During the last recession in the early 2000s, 34 states ended up cutting K-12 education, according to the Washington-based Center on Budget and Policy Priorities. Although that recession officially ended in November 2001, the delayed impact on state budgets meant that the bulk of K-12 cuts took place between 2002 and 2004. ("Hard Times Hit Schools," Aug. 27, 2008.)

But that recession was milder, and the cuts to K-12 education came later in the economic cycle; already, unemployment during this recession is higher than it was at the peak of the recession earlier this decade, according to the center. And cuts usually get worse during the second year of an economic downturn, experts say.

Finance officials are predicting that this overall downturn—which officially became a recession in December 2007—could affect states for four years before a significant recovery occurs. Especially worrisome are mid-year cuts already being made to programs like education, which are usually among the last to face the budget ax.

"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.

Pain Spreads

The list of states moving to cut public school funding either during the current fiscal year or in budget proposals for fiscal 2010 grows longer by the week.

In Virginia, Gov. Tim Kaine, a Democrat, is proposing cutting $340 million in state spending for public schools' support staff out of a K-12 and higher education budget of $5.6 billion.

"The revenue reductions necessary for 2010 are big enough that we cannot ignore the single largest state expenditure in the budget," he told legislators on Dec. 17. That admission came from a governor who has made expanding prekindergarten and raising teachers' salaries a key part of his agenda.

Still other states are having to make cuts in the current year's budget—half-way through the school year. Midyear cuts—like the $1 billion that may be slashed from California public schools' $42 billion annual budget—are the most painful. ("State Budget Chills Send Shivers Through K-12 Circles," Nov. 12, 2008.)

"School districts have already purchased equipment, and textbooks, and have their computer contracts," said Michael Griffith, a fiscal expert with the Denver-based Education Commission of the States. "Once the year has started, you don't have a lot of maneuvering other than layoffs."

In terms of sheer dollars, California is in the biggest budget mess. A projected $42 billion deficit over the next 18 months has schools bracing for deep cuts. The one-year budget is about $103 billion.

In response, the 340,000-member California Teachers Association, an affiliate of the National Education Association, is trying to get a 1-cent increase in the sales tax—with the $5 billion in annual proceeds used to reduce class sizes and provide new instructional materials—on a special-election ballot as early as later this year.

Many states are also turning to the federal government for help. Governors gathered in Philadelphia last month to make their pitch that any federal stimulus package should include aid to states, which could help pay for—among other things—school construction projects. School groups also hope they can garner money for general operating aid, which could help stave off teacher layoffs, as part of the stimulus package. ("School Groups Hope K-12 Gets Share of Stimulus," this issue.)

Without federal help, Ohio could be forced to slash up to 25 percent across the board, since tax increases are highly unlikely, Democratic Gov. Ted Strickland has said.

In New York state, school groups are lobbying to increase taxes on people earning more than $250,000 annually to help stave off massive cuts in state spending, including to education. The state faces a $15 billion deficit; the overall budget is $121 billion.

Gov. David Paterson, a Democrat who as a state legislator pushed for more school funding, has proposed reducing state education aid for fiscal 2010 by nearly $700 million from current levels, a cut that would be made worse, educators say, by the fact that schools were supposed to get an $1.8 billion increase next year as part of a multiyear plan to boost school funding levels across the state.

But in most states, raising taxes isn't a politically realistic option, especially in conservative, low-tax states such as Alabama.

"I think schools will get by this year," said Rep. Gipson, who noted that even his state's once-thriving automotive sector, which includes factories for Mercedes, Honda, and Hyundai, is feeling the economic pinch, though not as much as the long-troubled American carmakers. "But the real problem is next school year."

Vol. 28, Issue 16, Pages 1,21

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Clarification: This article differs slightly from the version in the Jan. 7 issue of Education Week, which did not reflect New Mexico Gov. Bill Richardson’s decision to withdraw his name as President-elect Barack Obama’s choice for U.S. Secretary of Commerce.

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