States Will Be Hard Pressed To Boost Education Funding, Studies Predict

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Deborah L. Cohen

Although the overall financial picture in many states has brightened considerably in the past few years, those gains are not likely to translate into increased spending on education and children's services in the near future, a new set of studies says.

The Washington-based Finance Project--set up by a consortium of foundations to study innovative ways of paying for children's programs--released the three studies late last month.

The group projects that economic growth and declining school enrollments--trends that have helped some states increase per-pupil spending over the past two decades--are unlikely to continue.

The studies also point out that Congress' drive to convert such entitlement programs as welfare and Medicaid into block grants and reduce their funding will shift to the states more of the burden to meet the needs of low-income families.

And because these proposals are not likely to factor in increases in the need for public aid, "many states will face the difficult choice of decreasing services, limiting eligibility, or raising taxes," said Cheryl Hayes, the executive director of the Finance Project.

Against that backdrop, states will be hard pressed to increase education spending, she said, and even modest increases in poverty will make it harder for states to serve poor families.

Richard H. Finan, a Republican state senator in Ohio, agreed that money is likely to be tighter if block grants are enacted, but he said his state has been building up funds to ease the transition.

"We have consistently increased our education spending in the state, and I see no reason that is not going to continue," he said last week in an interview.

Mr. Finan admitted that it would be harder to keep up the pace with social-services spending, but he said the federal changes could help the state continue its efforts to serve children more efficiently.

He cited one state program that has tried to reduce the number of case managers assigned to families to address different problems.

"Hopefully, there will be efficiencies of less bureaucracy so we can maximize the dollars that are there," he said.

Some experts say congressional proposals to consolidate social programs could improve coordination across agencies, but others worry that spending cuts could undermine such collaboration.

Ups and Downs

Spending on children varies widely by state, the studies show. For example, New Jersey, which spends the most on education, spends more than twice as much per pupil as Utah, the lowest-spending state. And Alaska, which spends the most on social-welfare programs, spends 21 times as much per child on welfare and nine times as much on Medicaid as Mississippi, the lowest spender.

States with proportionately low school-age populations and high per capita incomes spent the most on education, the studies show. But a state's tax effort--the amount of education spending per $100 of personal income--did not appear to influence per-pupil spending.

In contrast, the 10 states that spent the least on social services had low tax efforts relative to welfare spending.

Ira Cutler, a partner of the Cornerstone Consulting Group in Greenwich, Conn., and a co-author of one of the studies, said the findings show that several states are using creative approaches to integrate education and social services, encourage local decisionmaking, and promote more-equitable funding.

But that does not mean that states are "fully and completely ready to take on all of the responsibilities they're likely to have to assume," he said.

Vol. 15, Issue 06

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