School & District Management

Partisan Fights, Budget Cuts Complicate School Funding

By Sean Cavanagh — July 11, 2011 7 min read
A frustrated Gov. Mark Dayton addresses the news media on June 30, hours before a midnight deadline for a budget agreement. State government shut down at 12:01 a.m. on July 1, for the second time in six years, after political leaders couldn't agree on how to solve a $5 billion budget deficit.

After months of arduous negotiation and partisan squabbling, states across the country have produced budgets for the new fiscal year that in many cases will bring deep cuts to state spending, including money for schools.

The budget blueprints adopted by numerous states were postscripts to divisive legislative sessions that saw newly elected Republican governors and lawmakers successfully push for big policy changes, including reductions in teachers’ collective bargaining rights. Proponents argue that change will save districts money over time. (“Legislatures Approve Tougher Teacher Policies,” July 13, 2011.)

Deliberations over state budgets also were marked by sharp ideological divides between GOP leaders and Democrats over taxes and the size of government.

In some states, such as Texas, Wisconsin, and Ohio, lawmakers approved spending plans that will bring significant cuts to schools, local district officials say, while in a few others, like California and Iowa, K-12 education was shielded from reductions.

In Minnesota, meanwhile, the state’s Democratic governor and Republican lawmakers as of late last week had failed to reach a deal on how to close the state’s budget shortfall, forcing a shutdown of state government, including the state’s department of education.

Just two weeks ago, as many as 15 states had yet to approve a budget for the new fiscal year or the biennium, which in most cases began in July, said Brian Sigritz, the director of state fiscal studies for the National Association of State Budget Officers, in Washington. But since then, legislatures in almost every state have either approved budgets or sent them to the governor, who in some cases can pare them through line-item vetos, he said.

A number of volatile political and economic factors came into play this year, as lawmakers debated how much money to provide to K-12 schools.

More than 40 states entered this year’s legislative sessions facing budget shortfalls. While state tax revenues climbed back somewhat from where they were in the depths of the recent recession, allowing some states to avoid deeper cuts than projected, many financial analysts say the money flow will not recover to pre-downturn levels for at least a few years. And states are also coping with the “funding cliff,” the point at which federal economic-stimulus money—about $100 billion in total aid for education—is drying up. States are required to spend most of their education-related stimulus funds by this fall, though many have been on pace to use them up before then.

Tax Hikes in Wake of Great Recession

Many states are struggling to close severe budget shortfalls. But states have relied less on tax increases, cumulatively, during the most recent recession than they did during economic downturns in the early 1980s and early 1990s. States were less apt to raise taxes during and after the recession of 2001.

BRIC ARCHIVE

SOURCE: Donald Boyd, Nelson A. Rockefeller Institute of Government; National Governors Association/ National Association of State Budget Officers, Fiscal Survey of the States; U.S. Census Bureau; and National Bureau of Economic Research

Many Republican state officeholders, who made historic gains in last fall’s legislative elections and won control of a majority of governors’ offices, have vowed to oppose any tax increases, which they argue will stifle economic growth and nourish government programs and services that they believe have grown too large.

“The anti-tax attitude, in particular, is very widespread,” said Donald J. Boyd, a senior fellow at the Nelson A. Rockefeller Institute of Government, at the University at Albany, State University of New York. “Clearly, we are testing the anti-tax fervor, because people are going to have to decide if they really meant it when they said, ‘No new taxes.’”

Unusual Response

Cutting spending was a priority for the Republicans who control the Texas legislature, which faced a projected budget shortfall of up to $27 billion earlier this year. Legislators, in approving a $172 billion budget, changed state law so that they could provide schools with $4 billion less over the next two years than they had been required to fund them under the states’ foundation formula.

In a move lawmakers said was designed to help school districts avoid layoffs, the legislature also approved a measure, awaiting final action by Republican Gov. Rick Perry, that would allow districts to furlough school employees and cut their pay.

Jenny LaCoste-Caputo, a spokeswoman for the Texas Association of School Administrators, predicts the struggle will continue to pay for K-12 education in the years ahead without broad changes in how Texas funds schools.

“When you have a cut in state funding, it’s the property-poor districts that suffer,” said Ms. LaCoste-Caputo. “They rely more on state funding.”

Texas residents will be surprised by the impact of the budget cuts in their communities, she said: “When people say, ‘Cut government spending,’ they don’t think about the school down the street.”

In Wisconsin, the budget approved by the the state’s GOP-controlled-legislature and Republican Gov. Scott Walker will provide $4.3billion in general state aid for the coming school year, a decrease of 8.4 percent from the most recent year, according to the state’s department of public instruction. In Ohio, local school officials say they will lose hundreds of millions of dollars in aid, not including the loss of federal stimulus money, as a result of the budget approved by Republican Gov. John Kasich.

But both governors have argued that recently enacted laws limiting the collective bargaining rights of teachers and other public workers will help bring down districts’ costs in the long run. Those laws, which the governors in both states championed, drew massive protests from teachers and public employees. (“New Laws Curbing Public-Worker Bargaining Besieged,” April 20, 2011.)

“The tough choices we have made together produced a responsible, stable budget that will build a platform for future budgets and a stronger Wisconsin in the years ahead,” Gov. Walker said in a statement after the legislature approved the budget last month.

Few states had as much budget drama as California, which at one point earlier this year faced an estimated $26 billion shortfall. Lawmakers chopped $11 billion off that amount through a series of cuts in March. To close the remaining gap and pay for services going forward, Democratic Gov. Jerry Brown urged lawmakers to place a series of tax increases and extensions before voters, but the legislature’s Republican minority rejected that idea.

As a result, Democratic lawmakers last month approved an $86 billion budget, which reduces state spending by 6 percent. While the state’s universities and social services absorbed major cuts, K-12 spending will stay relatively level, at about $50 billion. But state lawmakers are counting on economic projections that show state revenues increasing with an improving economy; if that money does not come in, the budget includes a series of triggers that would force cuts to schools.

California lawmakers also took the unusual step of requiring districts to not make layoffs for the coming year and assume certain revenue projections. That move pleased teachers but angered many administrators, who said it tied their hands financially.

“You’re really setting up [a situation] where local school boards no longer have the authority to make local decisions about staffing levels and their budgets,” said Adonai Mack, a legislative advocate for the Association of California School Administrators. Districts will be in a bind if revenues peter out, he said.

‘Do More With Less’

In most states, Mr. Sigritz said, there is no definite consequence for not approving a budget on time, because legislatures can keep the government running through temporary spending measures or other means.

But the circumstances are different in Minnesota, where state legal and constitutional provisions forced a government shutdown on July 1 when Democratic Gov. Mark Dayton and the Republican-controlled legislature failed to agree on a budget.

The governor, elected in November, proposed closing a $5 billion shortfall and paying for state programs by raising taxes on the top 2 percent of the state’s income-earners; Republicans favored budget cuts. The governor and state lawmakers have proposed fairly similar spending on schools, at around $14 billion over two years, with Mr. Dayton having called for about $80 million more for K-12 education than his GOP counterparts.

The shutdown forced the closure of the state’s department of education, which has about 400 employees. As a result, the state was forced to stop issuing and renewing teacher licenses at a time when it had between 9,000 and 10,000 in process, said Charlene Briner, a department spokeswoman. It also halted the state agency’s work determining whether schools have met adequate yearly progress under the federal No Child Left Behind Act, and cut off technical support and other services, Ms. Briner said.

Not all state budget fights broke down along party lines.

In South Carolina, the GOP-controlled legislature overrode a series of vetoes by Republican Gov. Nikki Haley, actions that will send an additional $88 million to schools, according to the state’s department of education.

Local school district officials applauded the legislature’s move, saying that they have been making difficult financial sacrifices for years.

The Abbeville County school district has been forced to cut about 50 certified positions, including teachers, over the past four years, leaving about 300 people on staff, Superintendent Ivan Randolph said. The 3,000-student district’s budget has fallen by $4 million, to $20 million, over that period, forcing it to scale back early-childhood education, arts, foreign languages, and other programs. Mr. Randolph wants to use the new state aid to restore some cuts, particularly in early-childhood education.

“Our teachers are asked to do more with less,” he said. “We have to address standards for academic achievement, and it’s difficult to meet those standards when your budget is being cut.”

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A version of this article appeared in the July 13, 2011 edition of Education Week as Education Takes Hit In Budgets

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