State and Local Budget Writers Brace for Worst

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Uncertainty over federal funding is leading many local and state officials to use worst-case scenarios to plan next year's school budgets, anticipating at least a 17 percent cut in federal aid.

The bleak forecasts are fueling talk of pink slips and program cuts, especially in many urban and poor rural school systems where federal money pays for nearly 20 percent of school budgets. On the average, money from Washington makes up about 6 percent of school spending.

"Funding delays cause school districts to function with tunnel vision," David L. Snead, the superintendent of the Detroit schools, said at a recent news briefing on Capitol Hill. "Who can we hire? How can we develop supply budgets?"

A five-month-old deadlock between Congress and President Clinton over short- and long-term federal budget plans is at the root of the anxiety. The ongoing dispute has stalled 1996 spending bills for several agencies, including the Department of Education, which has been without a firm budget since Oct. 1, when the fiscal year began.

Instead, the Education Department and other agencies, including the Department of Health and Human Services, are being financed by a makeshift spending bill that expires March 15. And without any idea when the budget standoff will end, local officials are projecting many federal revenues for 1996-97 based on that bill.

If extended over a whole budget year, the short-term bill would cut $3.1 billion from the 1995 Education Department budget of $32 billion.

"It's a terrible, terrible way of doing the public's business," Secretary of Education Richard W. Riley said here last week at a rally sponsored by the National School Boards Association. "But that's where we are."

'Waiting and Hoping'

The political fight is creating headaches from coast to coast.

Anticipating cuts in impact aid, which compensates the district for schooling students who live on the tax-exempt Fort Eustis Army base, and Title I, which pays for services in schools with high concentrations of poor students, administrators in Newport News, Va., have already banned field trips and started a partial hiring freeze.

"We're waiting and hoping to have a decision to make adjustments in our budget," said Wayne Lett, the assistant superintendent for business for the 31,000-student system, which must submit a draft budget for the 1996-97 school year by March 15.

Boston school officials submitted a draft budget last week that would cut 17 of 79 schools from the Title I program, as well as 60 staff members, due to a projected loss of $3.5 million from $20.6 million in Title I funds.

"Even if the money comes back, teachers could be told they're out of a job," said Jack Baptista, the Title I director for the 62,600-student district. Making the situation even more dire is the requirement that Boston teachers be told of new assignments by April 1. "It causes frustration and consternation," Mr. Baptista said.

In a typical year, federal officials would already have state estimates for programs like Title I, special education, job training, and Safe and Drug-Free Schools. And by now, they would also have a picture of what funding for fiscal 1997 might look like as the president released his budget plan for next year. (See story, page 19.)

But things are far from normal. Mr. Clinton's 1997 plan is full of asterisks, and, except for Title I, the largest federal K-12 program, estimates for fiscal 1996 were unavailable last week. Marshall S. Smith, the Education Department's undersecretary, said funding data will be out by March 15.

Negotiations in Des Moines

In the meantime, local officials are keeping one eye on Washington while looking ahead with the other.

David Agazzei, the budget director for the Chicago schools, said his department will brief local school councils on budget procedures this week and will release their estimates for next year on March 6.

An 18 percent cut he is projecting in the $220 million the district received in federal school aid last year would, among other reductions, cut Title I aid by $28 million, from $145 million now, and vocational-training funds by $1.1 million, from $5.5 million.

"It will be hard to put together school-improvement plans backed by dollars," Mr. Agazzei added. "Schools will have to make some tough decisions."

In Oakland, Calif., doubt over federal aid is pulling apart the mosaic of funding for school security, technology, and immigrant-education programs, said Jean Quan, the director of the Oakland school board.

And Des Moines, Iowa, school board member Suzette Jensen said last week's opening round of contract negotiations with teachers would be complicated by the uncertainty of federal funding.

"Bipartisan support for education has dissolved," Ms. Jensen said. "Suddenly, there's an upheaval in things we've worked for so long."

Tide Turning?

That upheaval continues as Democrats accuse Republicans of trying to balance the federal budget on the backs of children. Republicans reply that Democrats want to perpetuate costly but failed programs while forcing federal involvement on local schools.

"I have a great deal of hope that we can put together a budget deal by March 15," Rep. John Edward Porter, R-Ill., the chairman of the House subcommittee that oversees education spending, said in an interview. "But the president has to be part of making any agreement."

The tide could be turning in favor of increased education funding. Recent House and Senate votes narrowly fell short of setting education spending at fiscal 1995 levels, which were higher than the current program funding rates.

Last week, about 250 school board members gathered in front of the Capitol for the NSBA rally. In the subfreezing weather, they chanted and urged Congress to pass a final education spending bill that increases school funding.

"As local school boards, we have to balance out budgets, and guesswork isn't good enough," said Roberta G. Doering, the NSBA president and a school board member in Agawam, Mass.

State-Budget Caveats

The budget impasse is also leaving a sting with state lawmakers who are at work on fiscal 1997 budgets. Without knowing how much money--or flexibility--Congress will give states, some governors are predicting a long budget season.

Gov. Paul E. Patton of Kentucky, who was elected last fall, delivered his first budget to lawmakers last month with the caveat that Congress could render his figures meaningless almost overnight. A change in Washington "could change our budget situation next week, next month, or any time during the next year," the Democrat said.

Some Washington observers suggest Republican state leaders are more confident about their projections because they have inside information on federal budget talks.

But at least one GOP governor, New York's George E. Pataki, has said the uncertainties of a long stalemate pose hazards for states. New York's fiscal year begins April 1, some two months before many states'.

As state budgets move from governors' desks to legislative committees, lawmakers must begin divining what Washington will do.

"I get eight to 10 calls a day," said Aaron Bell, the director of education and job-training programs for the National Conference of State Legislatures in Denver. "The question is always, 'What the hell is going to happen?"'

For state budget writers, uncertainty over the fate of federal Medicaid, welfare, and transportation payments is the biggest obstacle, as those programs account for most of the money that flows from Washington to states. Education cuts do not pose nearly the same problem, because federal school funds are a minor part of most state budgets.

Some state leaders say they will try to fill some the holes left by cuts in federal school spending.

In his State of the State Address last month, Gov. Parris N. Glendening of Maryland listed a number of programs that would be cut--including Title I--and said, "We will step in and pay for some of these programs ourselves because it is the only responsible thing to do."

But the chances that states can plug budget gaps left by federal cuts are not good in poorer states, which rely more on help from Washington.

"We're in a lean, mean kind of budget year," said John Hartman, the executive director of the Mississippi School Boards Association. "We just don't have the money. It's that simple."

Vol. 15, Issue 21

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