For States: New Year, Same Old Issues
As the new year began, a number of governors and state legislators across the nation were focusing on education matters, principally on the difficult question of how to maintain state support for schools at a time of steeply declining state revenues.
Among recent developments are these:
Arizona legislators, who convened this week, are in the process of trying to cut more than $200 million from this year's budget, and probably will have to make a similar cut in 1983-84 spending proposals, according to Senator Anne E. Lindeman, chairman of the Senate Education Committee.
Much of the cut will come from elementary and secondary education, which together consume over 50 percent of Arizona's budget.
Gov. Bruce E. Babbitt is considering a proposal to lower the permissible growth rate of school-district budgets from the current 7 percent to 4 percent, for an estimated savings of $30 million.
Senator Lindeman will propose fixing the growth rate to the Gross National Product "price deflator," a figure designed to reflect current economic conditions. The deflator is currently at 4.6 percent.
The state's new governor, George Deukmejian, placed education among his four top priorities in an inauguration speech last week. The Republican governor may face strong opposition from the Democratic-controlled state legislature in developing ways to alleviate the state's current $1.5-billion budget deficit.
The legislature wants to raise taxes--a move that could generate more money for schools. But the Governor said last week that he plans no net tax increases. He did, however, hold open the possibility that he might seek short-term revenue measures to bring the budget into balance.
At the same time, the new state superintendent of public instruction, William Honig, said he would ask for an additional $500 million to $700 million for state education programs. The funds, Mr. Honig said, will be needed to keep the system going and to make necessary improvements.
In Colorado--where deficit spending is illegal--school districts lost around $13 million in state education funds in November as part of a 2-percent cutback in all government programs caused by an estimated $100-million revenue shortfall in the 1982-83 budget.
The state legislature, which convened last week, is considering a variety of ways to avoid making further cuts this year, such as borrowing from other state funds.
Gov. William A. O'Neill, the 52-year-old Democratic lieutenant governor who became governor after the death two years ago of Gov. Ella T. Grasso, took office as an elected governor last week. He faced the prospect of a $46.5-million deficit in the current fiscal year and a projected $300-million deficit for the next year.
The Governor, who has said he may include tax-increase proposals in the budget he will deliver to the legislature next month, has already told state agencies to cut 5 percent from their budgets for the remainder of this year.
The current state budget is $3.2 billion.
Mr. O'Neill's budget deliberations will include the State Board of Education's 1983-84 budget request of $706 million, up $151 million over the current education budget. About $140 million of the request, education officials say, is needed to cover the cost of implementing school-finance-equalization legislation passed last year by the General Assembly. The Governor has already said he wants to simplify the aid formula.
In his inaugural address, Gov. Robert Graham told the state legislature last week that he would continue his commitment to adequate funding for education.
But revenue from the state's sales tax has fallen steeply this year in spite of a 1-percent increase, and Florida has few ways other than budget cuts to make up its $410-million budget shortfall, state officials say.
Allocations for education, which represent about 69 percent of the state budget, have been cut this year by about 4.5 percent, according to Martin T. Green, chief legislative specialist for the Florida Teaching Profession, the state affiliate of the National Education Association.
Governor Graham, who officials of teacher unions say is making "as genuine and sincere an attempt to fund education as any governor in the U.S.," will try to persuade the state legislature to bring teachers' salaries and per-pupil expenditures up to the top level among the states.
"In order to fulfill the potential of each of our citizens," the two-term Governor said in his inauguration speech, "we must be committed to avoiding the most devastating deficit of all, the deficit of knowledge. If all Floridians are to be full partners in the achievement of our dreams, we must increase our investment in education."
He added that the economic investment in education would create "intangible and enduring dividends" because "the next chapter of our economic future will be written in our classroom."
Massachusetts, where 8,000 teachers have been laid off since the 1980 passage of Proposition 2, faces a no-growth budget It was recommended by former Gov. Edward J. King and will be amended next month by the incoming governor, Michael J. Dukakis.
Mr. Dukakis, who was sworn in last week, promised during his campaign to allocate more state funds to local communities, and education officials in the state are hopeful that some of that money will be specifically earmarked for education programs.
Currently, 90 percent of the school districts are operating at the same level of state support as in 1978, according to Soterios C. Zoulas, director of media relations for the Massachusetts Department of Education.
Areas that have lost enrollments still receive the same amount of funding, while other cities and towns with expanding enrollments are scrambling to provide necessary services.
The New Hampshire legislature has told the state education department to expect a 4-percent across-the-board cut in state funds for education this year.
The cut, required by an expected deficit of approximately $35 million in the 1982-83 budget, would mean $1 million less in state education funds for local districts, said Commissioner of Education Robert L. Brunelle.
The education department, which has already lost some 60 positions in the last year and a half, will also absorb an additional 4-percent cut, Mr. Brunelle said, probably resulting in the loss of an additional 10 to 15 positions.
The prospect of a $150-million deficit in the current budget brought New Jersey's Republican governor, Thomas H. Kean, and the Democratic-controlled legislature into agreement late last month on two tax measures, after a year of disagreements.
The actions came in a special post-Christmas session called by the Governor that kept legislators working around the clock; it resulted in approval of bills to increase by 1 percent the income tax on individuals earning more than $50,000 and to raise sales taxes by 1 percent, to 6 percent.
In addition, the legislators approved an $87-million appropriations bill that included $45 million in additional aid to schools. The state's 1982-83 education budget of about $2 billion had been hurriedly trimmed last June after the legislature failed to approve a gasoline surtax that would have bolstered state revenues.
The state education department has submitted to Mr. Kean a 1983-84 budget of $2 billion.
The Governor will deliver his recommendations to the legislature Feb. 1.
The incoming governor, Mario M. Cuomo, told the state legislature last week that he would make specific changes in education funding formulas to provide "increased support for those districts least able to support basic programs from the real property tax."
(Mr. Cuomo's predecessor, Gov. Hugh L. Carey, had also supported such changes, but the chances that the legislature would approve them were said to fade when the state's highest court last summer ruled that New York's current formula is equitable.
The ruling ended a suit, Levittown v. Nyquist, that had been brought against the state in 1974 by 26 school districts that claimed the New York formula discriminated against "property-poor" districts.)
Governor Cuomo nonetheless said the budget he will present to the legislature on Feb. 1 will propose "detailed recommendations to make current aid formulas fairer without seriously impairing the programs of more affluent communities."
Included in the changes, Mr. Cuomo said, would be "increased support for magnet schools and demonstration schools in urban areas." He commended these schools for their success in improving academic performance and promoting integration.
Mr. Cuomo also said he would increase support to help both public and private schools purchase textbooks, which have become increasingly expensive in the last few years.
New York has a $579-million shortfall in its current budget that is expected to reach $1.8 billion by April 1. At a press conference following the governor's speech, State Budget Director Michael Finnerty said that he would be looking at the budget to provide fair cuts in programs.
In Oklahoma, where the legislature is currently $11.3 million behind in providing the $750 million it allocated for education programs for the current year, Gov. George Nigh predicted last week in his state-of-the-state address that education and other agencies would suffer an additional 3-percent cutback for the next fiscal year.
In Utah, which is feeling the effects of the nationwide recession for the first time, Gov. Scott M. Matheson has proposed a no-growth budget that would hit teachers especially hard.
The new funding proposals would leave teacher salaries at 1982 levels. Teachers would be given a 3-percent salary increase only if the legislature agrees to increase taxes.
Governor Matheson also may dip into a surplus in the state's teacher-retirement program to come up with funds needed in other areas, according to Donald W. Ulmer, acting director of the Utah Education Association.
The only new funds for education, Mr. Ulmer says, are intended to provide for the recent influx of 12,400 new students.
Educators here are facing the possibility of a fourth budget adjustment in two years as the state gropes for ways to cope with the effects of a severely depressed regional economy.
The "very bad situation," according to a state department of education official, is compounded by complexities in the tax structure (Washington currently is one of the few states without an income tax) and uncertainty over the outcome of a crucial school-finance case pending in a federal appeals court. (See story on page 8.)
Gov. John Spellman last week ordered another across-the-board cut in the current state budget that would take effect March 1 unless the legislature, which convened this week, finds a way to raise money to cover a $135-million deficit before that.
According to Terry McCarthy, an administrative assistant to State Superintendent of Public Instruction Frank I. Brouillet, the new rescission would amount to another 4.5-percent cut in school-district budgets that have already lost $55 million in the current biennium.
Last month, the Governor also made public his 1983-85 budget, which included a strong pitch to the legislature to "make an investment in the future" by supporting his proposed $637-million increase in education spending over the two-year period. The $8.3-billion total state budget would include $3.8 billion in spending for schools and colleges.
The schools' portion of the education budget, according to Mr. McCarthy, is $294 million less than the education department requested. It raises spending, he said, somewhat closer to the 100-percent funding level that educators argue is mandated by state law, but still does not, in their view, constitute full funding for "basic education," transportation, and special programs.
Another wrinkle in the overall finance situation, Mr. McCarthy said, is the fact that current surtaxes are scheduled to be eliminated in June. Although proposals to initiate an income tax in Washington are likely to be debated in the new legislative session, he said, if those or other revenue-raising measures replacing the taxes are not enacted, state finances could at that point be thrown completely off balance.
Alex Heard, Martha Matzke, and Sheppard Ranbom contributed to this report.
Vol. 02, Issue 16