Big Stakes for K-12 as Federal Budget Process Gears Up

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Congressional Republicans and President Donald Trump, aiming to break years of fiscal gridlock, could make significant changes to the U.S. Department of Education's budget—changes that might include major cuts. There are conflicting signals about whether they'll impose big cuts that hit students in special education, educators in teacher training, and other beneficiaries of federal education programs.

Budget sequestration, the mandated caps on spending that have defined the fiscal environment in Washington in recent years, may not make the headlines it used to. But lawmakers still have to decide if they want to end that constraint for education and other domestic programs—and if so, how those budgets will look for what's left of fiscal 2017 and for fiscal 2018, which begins Oct. 1.

Dramatic reductions in spending appear possible. A recent report from The Hill newspaper indicated that a 2017 budget blueprint from the Heritage Foundation, a leading policy voice on the political right, could form the basis for the Trump administration's fiscal 2018 budget.

Conservative Blueprint

That blueprint includes reducing so-called formula funding in education by 10 percent, or $2.3 billion, for federal programs like Title I whose aid is allotted mainly according to fixed formulas; cutting competitive and project grant funding under the Every Student Succeeds Act by $1.8 billion; and phasing out Head Start by cutting 10 percent from the program each year, or $935 million in the first year. (Head Start, which serves preschoolers from poor families, is overseen by the Department of Health and Human Services, not the Education Department.)

In the current year's budget, Title I for disadvantaged students is the largest single piece of federal K-12 spending, at $14.9 billion, followed by Individuals with Disabilities Education Act state grants, at $11.9 billion.

Although the Heritage budget calls for a 10 percent cut to formula-funded education programs, the director of the think tank's Center for Education Policy, Lindsey Burke, said it wants to look at allocating IDEA money differently but isn't calling for cuts in that aid at this time.

"The very general approach is one in which we want to restore as much state and local control of education as possible," she said. said. "In my opinion, in order to get to that point, it requires a stop to what we see as an education spending spree."

There could also be a fierce competition for a shrinking pie of dollars, not just between education advocates and those fighting for Labor Department and HHS programs, but also between advocates of various programs within the Education Department budget. The Education, Labor, and HHS departments are funded through the same congressional budget bills.

Rep. Tom Cole, R-Okla., the leader of the appropriations subcommittee in the House of Representatives that funds the Education Department, stressed that he's still finding out where the Trump administration stands on key K-12 spending questions, and that much will be shaped by Trump's priorities. Cole also said an overall reduction in department spending "may be more likely than not."

However, Cole also offered a measure of support for some of the biggest formula-funded programs at the Education Department.

"Some of these basic programs like Title I and IDEA are important building blocks for a lot of school districts around the country," he said.

Recent Action

The Education Department budget was $68.1 billion for fiscal 2016. Of that amount, $22.5 billion was for Pell Grants for higher education; Title I aid was the second-biggest category. (Because the federal budget is operating on a continuing resolution through late April, those fiscal 2016 spending levels have essentially rolled over into fiscal 2017.)

Last year, when the GOP-controlled Congress approved spending bills, the House appropriations panel approved a fiscal 2017 bill that would cut $1.3 billion out of the department's budget. Among other reductions, state teacher-quality grants would be cut from $2.35 billion, to $1.95 billion; the office for civil rights from $107 million to $100 million; and the Education Innovation and Research program would be eliminated.

In addition, the Student Support and Academic Enrichment Program in Title IV—a big new block grant for various programs created by ESSA—would be funded at $1 billion, less than the $1.6 billion authorized in ESSA, but more than the $300 million allocated in the Senate budget bill for education. Special education grants to states under the IDEA, however, would get an increase of $500 million, to $12.4 billion, and Title I spending would go from $14.9 million to $15.4 billion.

That Senate spending bill had a smaller overall cut to the Education Department, just $200 million, even as it increased funding for Title I by $500 million, up to $15.4 billion. Some advocates were still concerned because of other budget changes.

Last summer, Speaker of the House Paul Ryan's "A Better Way" policy blueprint called for reducing "redundancy" in early-education and child-care programs funded by Washington, and criticized Head Start for the "fade out" some research has shown occurs as children progress through the early grades.

It's also unclear if, or how, a big push by the Trump administration to create a federal tuition-voucher program would shake up the education budget. When Trump announced his $20 billion voucher plan during the campaign last year, he said the money would come from existing federal funds. But the president hasn't elaborated on that idea.

Cole said that if his subcommittee comes back to craft another education spending bill for fiscal 2017, the plan likely wouldn't look significantly different from what the panel put together last year. But he added that "we don't have a lot of time" to pass a regular appropriations bill for fiscal 2017 before the start of the next fiscal year in October.

Without any action to alter sequestration, overall domestic discretionary spending is slated to go down by $3 billion in the next budget year, noted Erik Fatemi, a vice president at Cornerstone Government Affairs and a former Democratic staffer on the Senate appropriations subcommittee that handles education. And it's unsafe to assume that the Labor-HHS-Education budget would merely take a corresponding $1 billion reduction, he added.

The glory days of programs like the Obama administration's Race to the Top—in which states applied for federal grants to accomplish certain education goals under certain requirements—will probably seem like a distant past when Republicans sit down to draw up their budget, according to Fatemi.

"Republicans for a long time have been frustrated by competitive [grant] programs. I think you're going to see that formula programs will carry the day much more than competitive programs," Fatemi said.

That's because many Republicans are concerned that if they cut formula programs like Title I, they could be accused of imposing unfunded mandates on states and school districts, said Julia Martin, the legislative director for Brustein and Manasevit, an education-focused law firm.

Big-Ticket Items

That concern among lawmakers would also apply, she said, to the IDEA, under which the federal government is authorized to pay for up to 40 percent of the cost of educating students with disabilities. Congress has not come close to reaching that level, however.

Martin said there's the potential that advocates for different formula-funded aid programs will end up fighting over which formulas should be cut. In that case, Martin said, "often the easiest answer is that kind of across-the-board cut."

Such thinking could lead the administration back to the Heritage plan.

Sheryl Cohen, the executive director of the Committee for Education Funding, a lobbying coalition that supports "adequate federal support" for K-12, predicted an overall cut for education in President Trump's proposed fiscal 2018 budget, but a boost for charter school aid.

She pointed out that aside from Title I and the IDEA, only four other programs in the Education Department currently get more than $1 billion: Impact Aid, career and technical education programs, teacher-training programs, and after-school programs. (Impact Aid helps offset schools' loss of local tax revenue in areas with a big federal presence, such as military bases, which might make it less likely to get cut by a GOP-controlled Congress.)

"Unfortunately, these are among the most important programs for filling the gaps in state and local funding, and most target their funding to at-risk students," Cohen said in an email.

Fatemi said that the recent House and Senate education spending bills, despite general concerns about domestic spending levels under the GOP-controlled Congress, contained notable increases for Title I and the IDEA. But it's unclear whether the new president will go along with them.

"Republicans are going to want to hear what Trump has to say. He may tell them to work it out, or he may have priorities," Fatemi said.

Vol. 36, Issue 20, Pages 17, 20

Published in Print: February 8, 2017, as Big Stakes for Education Aid as Federal Budget Process Gears Up
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