Published Online: February 1, 2011
Published in Print: February 2, 2011, as Fiscal Plights Leveraged for Governors' Agendas

Governors Find Education Opportunities in Budget Woes

Superintendent of Public Schools Tom Luna, standing third from left, listens to testimony last week before the Joint Finance-Appropriations Committee at the Idaho Statehouse in Boise. With the backing of Republican Gov. C.L. Otter, Mr. Luna has called for allowing average class sizes across the state to rise by one to two students in grades 4-12, which he estimates will save the state $500 million over five years.
—Chris Butler/Idaho Statesman/AP

It is the worst of times for state budgets. But across the country, some elected officials say it’s the best time to rethink how their states spend money on education.

Governors and other officeholders are arguing that their states have no choice but to re-examine assumptions about how schools are using the money they currently receive, given bleak budget conditions that may not improve substantially for at least a few years. Some are urging their states to demand more financial accountability from schools, while others have proposed redirecting at least some of the flow of funding to districts and programs, in the hope of either saving money or improving student performance.

The call for schools to do more with less, or the same amount of money, is not new. But it appears to be gaining traction in a number of states, particularly those trying to climb out of financial troughs.

“We’ve chosen to act, rather than be acted upon,” said Idaho Superintendent of Public Instruction Tom Luna, who has proposed raising class sizes slightly across the state and putting financial savings from that move into new technology, higher teacher pay, and other areas. The goal, he explained, “is to change the system to one that can educate more students at a higher level with limited resources. The current system can’t do that.”

For years, states have sought to protect schools from budget cuts, and in their proposed spending plans for next fiscal year, some governors have promised to do that, by either keeping education funding stable or even increasing it slightly.

But in their annual “State of the State” addresses and other settings, governors such as Democrat Andrew Cuomo of New York and Republican Chris Christie of New Jersey have voiced dissatisfaction with the results their states are getting from schools for the money being spent now. Giving schools more money without higher expectations, they’ve argued, won’t bring improvements.

Restructure or Suffer?

It’s not unusual during tough financial times for state leaders to pledge to scour budgets, including school budgets, in search of bloat, said Julie Bell, the education program director of the National Conference of State Legislatures, a research organization in Denver. But elected officials today seem more determined at least to consider structural changes to K-12 spending, a goal she attributes to both economic conditions and public sentiment.

Moving Money, Shifting Priorities

Idaho schools chief Tom Luna, backed by the state’s governor, C.L. “Butch” Otter, has called for overhauling state spending on K-12 education. Luna says the changes will stave off deep school budget cuts and put resources where they’re needed.

The Plan
Idaho would raise its average student-to-teacher ratio from 18.2-to-1 to 19.8-to-1, for grades 4-12, saving an estimated $100 million per year over five years.

The Savings would be channeled into several areas:

During less severe downturns, the attitude was “this is short-lived, and the good times are right around the corner,” Ms. Bell said. “The mood of the country now is [focused on] dealing with deficits, dealing with spending. People want efficiency now.”

In Idaho, state leaders argue that their schools will struggle financially for years to come, barring fundamental changes in how the state spends money on education.

With the backing of Republican Gov. C.L. “Butch” Otter, Mr. Luna has called for allowing average class sizes across the state to rise by one to two students in grades 4-12, which he estimates will save the state $500 million over five years. The state would then pour those savings into a major expansion of virtual education and technology and the creation of a statewide performance-pay system for teachers and administrators, among other efforts.

If Idaho doesn’t restructure how it funds education, Mr. Luna contends, continued budgetary pain awaits. Over the past two years, he notes that the state has chopped its budget for schools by $200 million—out of an annual K-12 general fund budget of about $1.2 billion—resulting in frozen salaries for teachers and administrators and cuts to academic remediation, technology, maintenance, textbooks, drug-prevention programs, and other areas. Even under favorable economic conditions, it would take the state 10 years to make up for those two years of cuts, he estimates.

Like a number of public officials these days—including U.S. Secretary of Education Arne Duncan—Mr. Luna believes that modest class-size increases are acceptable if those classes are taught by talented educators who are paid fairly for their work. The class-size increase and proposed growth of online courses would allow Idaho to eliminate 770 teaching positions through attrition over the next five years, his staff estimates. The state would build on its existing network of online and virtual courses and monitor their quality, Mr. Luna said, and every online course would be taught by a certified teacher.

Idaho elected officials, like those in other states, could choose to raise taxes to increase education spending. But Mr. Luna, a Republican, and the governor, both of whom won re-election last fall, have said there is no public appetite for tax hikes. The school official points to November’s elections, in which candidates who promised to control government spending fared well.

GOP and Democrats Alike

The Idaho proposal—which Mr. Luna says would need approval from the state’s GOP-controlled legislature—has drawn a skeptical response from the Idaho Education Association, a 13,000-member teachers’ union. Sherri Wood, its president, said class sizes in some schools are higher than the averages cited by Mr. Luna and should not be raised. She also thinks the public would support tax increases if Idaho’s political leaders promised that money would be spent on schools.

Education is feeling the pinch as state budgets tighten nationwide. Read what the governors plan for education funding and reform in 2011 in our State of the State and budget address roundups.

“Doing away with teaching jobs, to be replaced by a computer, doesn’t play well in [Idaho] communities,” Ms. Wood said. Struggling students and those who need more guidance aren’t likely to succeed in online settings, without a teacher present, she argued.

Other state efforts seek to give students and families more flexibility in how they use state funding. In Indiana, legislation sponsored by state Sen. Dennis Kruse would give students who graduate early from high school a portion of state per-student aid—$3,500—to cover college costs during what would have been their senior years. The plan is supported by state schools chief Tony Bennett and Gov. Mitch Daniels, who like Mr. Kruse are Republicans.

While many of the calls for greater scrutiny and different uses of school spending are coming from Republicans, some Democratic office holders have also sounded the theme.

New York’s Gov. Cuomo, in his State of the State address last month, said the state should provide more of its education funding to districts through competitive funds, rather than formulas. The newly elected Democrat called for the creation of a pair of $250 million competitions for school districts, one of which would reward them for academic improvement, the other for finding innovative ways to save money. Currently, districts get “their numerical formula, and that’s what they’re going to get, whether they do a good job, a bad job, it doesn’t matter,” Mr. Cuomo told lawmakers. “Competition works. ... When you just give people cash with no results, you take the incentives out of the system.”

New York faces a $10 billion deficit, and it is hardly alone in its budget woes. Forty-four states have projected financial shortfalls in fiscal 2012, which is “shaping up as states’ most difficult budget year on record,” according to the Center on Budget and Policy Priorities, a Washington-based research organization that focuses on issues affecting low-and moderate income individuals.

So far during fiscal 2011 year, at least 13 states have made midyear budget cuts to K-12 programs, according to a recent reportRequires Adobe Acrobat Reader by the National Governors Association and the National Association of State Budget Officers. Governors’ budget proposals for fiscal 2012 offer a mixed picture for K-12, with some calling for increasing or preserving education funding and others recommending modest cuts.

The financial struggles of states also are playing out as governors and lawmakers across the country are backing legislation to make it easier for districts to fire ineffective teachers and change how teachers are evaluated. Some advocates also favor changing teacher pay to reward educators for improving student achievement, rather than seniority or obtaining master’s degrees.

Related Blog

The potential financial impact of those measures on states is unclear. Many states base the amount of money they provide to districts on estimates of what it costs to educate a child, noted Michael Griffith, a senior policy analyst at the Education Commission of the States, a research organization in Denver. If districts could drive down costs through alternative approaches to evaluating, paying, and hiring and firing teachers, he said, states’ costs also could fall. But the costs and savings of those teacher strategies are difficult to predict, said Mr. Griffith, who noted that some teacher merit-pay models have raised costs in districts. Even so, salaries and benefits of teachers and other educational staff account for a big chunk—about 65 percent—of K-12 spending, so it’s easy to see why state and district officials are focused on it, he said.

One elected official who called for overhauling how teachers are evaluated is Gov. Christie of New Jersey. In his Jan. 11 State of the State speech, he vowed to continue to press that agenda, adding that simply devoting more money to K-12 would not bring the increased student performance the state needs. He noted that New Jersey ranks among the highest states in per-pupil spending.

“We must end the myth that more money equals better achievement,” Mr. Christie said. “We can no longer waste our children’s time or the public’s money waiting for it to finally work.”

But David G. Sciarra, the executive director of the Education Law Center, argued that if states cut funding to school districts during this difficult financial period, the pain will be felt most by disadvantaged students. Impoverished districts have little local property-tax wealth to draw from, and so state aid is a lifeline, said Mr. Sciarra, whose Newark, N.J.-based group advocates for poor students and schools. He urged state officials to work cooperatively with districts in the years ahead to set budget priorities so that current inequities aren’t made worse.

State officials “have an obligation to look for better ways to spend money,” Mr. Sciarra said, but “they’ve got to be very careful in how they do this. Across-the-board cuts and freezes have a negative impact on schools in need.” Ideas about how to cut spending are often proposed at “30,000 feet,” he said, but officeholders need to “take a serious look at how [cuts] would play out in their state.”

Vol. 30, Issue 19, Pages 1,21

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