Issues of 'Buildings and Bucks' Put Squeeze on Charters

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The suspension last week of budget talks between the White House and congressional Republicans portends a long period of uncertainty for school districts trying to plan for next fall. And without a budget deal, schools are virtually certain to face big cuts in federal funding when September comes.

Republicans backed out of Jan. 17 talks after demanding that President Clinton revise his most recent balanced-budget proposal, and they are threatening to single out some programs for full appropriations while funding for other programs lapses or continues at low levels.

The stalemate over the federal budget has had little immediate impact on education programs, because most funding for fiscal 1996, which began Oct. 1, will not begin flowing to schools until July 1. Still, the uncertainty is giving state and local budget writers heartburn.

"The more this drags on, the more damage that will be done," Undersecretary of Education Marshall S. Smith said last week. "Everyone is in the same position we're in, speculating. Uncertainty is the story."

While the negotiators are at loggerheads over long-term plans to balance the budget in seven years, several agencies, including the Department of Education, are still without appropriations for 1996.

The impasse has caused two partial government shutdowns. Republican leaders have said they do not intend to force a third closure, but one could come after Jan. 26, when a temporary spending bill financing those agencies is set to expire. While most K-12 programs would continue distributing money appropriated last year, federal officials would again be unavailable to answer questions or process applications.

Targeted Funding

The final outcome of the budget battle has broader implications.

A long-term deal would likely favor education, because it could make more fiscal 1996 money available to the House and Senate committees that set education funding levels.

Currently, a House-passed 1996 spending bill would cut Education Department programs by $3.2 billion below the 1995 level of $33 billion. A companion bill, approved by the Senate Appropriations Committee but stalled over employment and abortion issues, would cut $2.1 billion.

The worst-case scenario for education programs could be a series of short-term spending bills that keep the government running at low funding levels while fully paying for some programs and eliminating funding for others.

"We're going to fund those agencies that we want to fund. We're not going to fund those we don't want to fund," House Majority Whip Tom DeLay, R-Texas, told reporters recently.

House GOP leaders have specifically named two Clinton administration initiatives, the Goals 2000: Educate America Act and the AmeriCorps national-service program, as programs they would like to erase, although both have well-placed Republican supporters in the Senate.

"The Senate is more committed to the normal ways of doing things, so I don't know if they'll get these through Congress," said Joseph White, a senior fellow at the Brookings Institution, a centrist think tank here. "But I do think there will be a serious attempt."

Should GOP leaders get targeted spending bills through the Senate, President Clinton would have to accept the cuts or risk another shutdown by vetoing them.

In addition, if the government is funded through continuing resolutions for the remainder of the fiscal year, it would likely be bad news even for education programs not singled out for elimination.

The current resolution funds programs at the lowest of three marks: the spending bill passed by the House or the Senate, or the 1995 level. Programs that would be killed under one of the bills get up to 75 percent of their 1995 funding. An extension of the current terms would mean a $3.1 billion drop in education spending, including a $1 billion cut to the Title I compensatory-education program, which got $7.2 billion in 1995.

"We're most nervous about a war of attrition," said Joel Packer, a lobbyist for the National Education Association. "Over time, a series of low continuing resolutions start becoming your appropriation for the year."

The lack of a federal budget--which is usually set in September or October--is already beginning to have an impact.

A Planning Vacuum

In Washington, there is little work being done on the fiscal 1997 budget proposal that Mr. Clinton would normally be planning to unveil early next month.

"We don't know what we're going to do because without a 1996 base, we can't make plans," said Sally H. Christensen, the director of the Education Department's budget service. "Normally, the budget would be at the printer and we'd be getting ready for a press conference in two weeks."

State and local officials are experiencing difficulties of their own.

Without knowing next year's Pell Grant budget or the size of the maximum award, for example, it is hard to compute financial aid for fall college applicants.

"These are kids trying to decide where they're going to go to college," Undersecretary Smith said.

The Education Department has told state and local officials to make contingency plans for different levels of federal aid. Title I programs, for example, would take a 17 percent cut in fiscal 1996 under the House bill and a 10 percent cut under the Senate plan.

"Basically it's chaos," said Rich Long, the executive director of the National Association of State Coordinators of Compensatory Education. "You just can't dignify it any other way."

"It has had an impact on staff and the community in preparing for the 1996-97 school year. They are greatly discouraged," Michael J. DeRaimo, the federal-state liaison for the Pittsburgh public schools, said last week at a Democrat-sponsored hearing on education and the budget.

Democrats used the event to blast Republican budget proposals, and especially the threat of targeted appropriations.

"How are we going to have a national commitment to education with that cavalier attitude?" asked Sen. Edward M. Kennedy, D-Mass.

The Democrats also expressed concern over what state lawmakers will do in the absence of federal numbers.

"As they go into the season without getting money, they will have to look over their budgets to see where to pick up the difference, and it always comes out of education," said Sen. Patty Murray, D-Wash., a former school board member.

Vol. 15, Issue 18

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