School & District Management

‘Sequester’ Adds to Districts’ Budget Uncertainties

By Alyson Klein — March 12, 2013 6 min read
Sixth graders at St. Paul's Lutheran School in Waverly, Iowa, plead their case after their hopes of a visit to the White House were dashed. Tours of the White House were suspended in the wake of across-the-board federal spending cuts known as sequestration. States and school districts face fiscal uncertainty as Congress and the Obama administration continue sparring.
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Even as they seek to quantify the impact of across-the-board federal budget cuts on K-12 programs, some of the nation’s neediest school districts are bracing for tough choices.

The pinch from sequestration—or “the sequester,” in Washington shorthand—is expected to be particularly painful for districts that depend the most on the federal government to supplement their bottom lines. They include districts serving high numbers of disadvantaged children, students in special education, and English-learners, along with those near military bases and on Native American reservations.

“If you’re one of those districts that’s heavily reliant on federal funds, you’re not going to have any other way to replace those dollars,” said Michael Griffith, a school finance consultant for the Education Commission of the States, in Denver. “These are the poorest school districts in America. ... Any dollar you take from those districts will be problematic, especially if this continues.”

The reductions—roughly 5 percent of federal aid across the board—threaten to darken the fiscal picture in states and districts beginning to rebuild their education funding as they recover from state and local cuts made during the recent recession.

Tough Course Ahead

The fiscal uncertainty that school districts have faced from Congress for the past couple years isn’t likely to end anytime soon. Policymakers face some hurdles that could have major implications for the federal budget and U.S. Department of Education funding.

March 1
President Barack Obama signs an executive order putting in place “sequestration"—a series of across-the-board cuts applying to a broad swath of federal programs, including many in the U.S. Department of Education, such as Title I grants for districts and special education. The cuts won’t hit most districts until the 2013-14 school year. They will stay in place for 10 years unless Congress can figure out a way to reverse them.

March 27
A spending measure currently financing most of the federal government at last year’s levels expires. If Congress and the Obama administration can’t agree on a compromise to extend the funding, there could be a government shutdown. The U.S. House of Representatives has passed an extension measure that will leave the education cuts in place. Mr. Obama has signaled that he will likely sign the bill to avoid a shutdown.

President Barack Obama is warning of the effect across-the-board cuts will have on education.
—Carolyn Kaster/AP

Obama releases his budget for fiscal 2014. That budget is expected to flesh out proposals the president announced in his State of the Union Address in January, including major expansion of federal prekindergarten programs, and it could explain how the administration wants to handle the sequester cuts going forward.

Late May
The nation will reach its debt limit around May 18. Congress will need to come up with a compromise to continue to pay the nation’s bills—or, again, there could be a government shutdown.

House Speaker John Boehner and GOP and Democratic colleagues face hard budget choices.
—J. Scott Applewhite/AP

October 1
Federal fiscal year 2014 begins. Congress will need to come up with a spending measure—or yet another extension—to keep programs in business.

For instance, the Los Angeles Unified School District had experienced a “steady drumbeat of layoffs” and furlough days until Golden State voters last year agreed to boost the sales tax to finance public education, said Tom Waldman, a spokesman for the district. The LAUSD is planning to stop those job losses and had even hoped to hire back some of the thousands of staff members it had let go in recent years.

But sequestration has “dampened some of the good news around here,” Mr. Waldman said. Los Angeles is expected to lose about $37 million in federal aid, of a budget of about $6 billion.

“It’s a real hit to a budget that has been devastated over the last five years, at a time when things were really starting to look up,” Mr. Waldman said.

The across-the-board federal cuts, which affect a broad array of domestic programs as well as military spending, were intended as a sort of trigger mechanism to force lawmakers on both sides of the congressional aisle to compromise on a long-term plan for the nation’s fiscal future. But so far, such an agreement has proved elusive—and the cuts, which total $1.2 trillion, are slated to take place over the next decade.

Teacher Jobs

The Obama administration, which has been working to persuade lawmakers to reverse the reductions, has made education a focus when it comes to the impact on domestic programs—with some notable stumbles.

U.S. Secretary of Education Arne Duncan pegged job losses at a potential “40,000 teachers” in a Feb. 24 interview on the CBS program “Face the Nation,” drawing criticism from media fact-checkers and Republicans in Congress. He later said he had misspoken and should have referred to “educator” jobs.

In a March 1 letter to Mr. Duncan, key Republican lawmakers said that while the cuts “may have negative effects, ... school districts will have final say in determining how cuts are implemented.”

The letter, signed by U.S. Sens. Lamar Alexander of Tennessee, the top Republican on the Senate education committee, and Jerry Moran of Kansas, the senior GOP lawmaker on the panel that oversees K-12 spending, goes on to say that the cuts “will not necessarily result in significant teacher layoffs.”

The total job-loss impact of the cuts remains murky because school districts are just beginning to craft their budgets for the next school year, when a majority of the reductions will hit. The long window gives districts, which tend to be much more dependent on state and local funding than on federal dollars, time to plan. Still, the cuts are expected to sting both districts and states.

“This is trouble on trouble,” said June Atkinson, the superintendent of public instruction in North Carolina, an elected Democrat.

During recent lean budget years, districts across North Carolina trimmed thousands of educator positions, and teachers’ salaries have been relatively stagnant for years, she said. Now, state revenues are beginning to pick up, said Ms. Atkinson, but lawmakers face other spending pressures that will likely compete with education, such as Medicaid, and they might not be able to steer enough toward K-12 to make up for the cuts.

Schools Bracing

“It’s just becoming increasingly more difficult for school districts to be able to absorb all those cuts through attrition,” Ms. Atkinson said. It’s unclear whether the federal cuts will translate into layoffs or programmatic cuts, but Ms. Atkinson said they could complicate North Carolina’s efforts to carry out education redesign initiatives, including implementation of the Common Core State Standards.

Sequestration is also coming at a tricky moment for the Boston public schools, which have already had to do some creative budgeting to find new sources of money for interventions such as extended learning time and partnerships with nonprofit groups at the lowest-performing schools.

Those strategies had been financed in part with School Improvement Grant dollars made available through the American Recovery and Reinvestment Act. But this school year is the final year for ARRA’s boost to that SIG funding.

“Extended learning time and critical partners are at risk with sequestration,” said John McDonough, the chief financial officer of the 57,000-student district, although he said he expects Boston would be able to find a way to continue many of those efforts and identify other places to trim, at least during the 2013-14 school year.

Among the first districts to feel the cuts will be the 1,200 that rely on federal impact aid, which helps districts cover the cost of educating children in areas near military bases or on Native American reservations, or which makes up for tax revenue lost to the presence of federal lands.

Unlike Title I aid for disadvantaged students and federal funding for special education, the $1 billion impact-aid program will experience a cut during the current school year.

Most impact-aid districts have already planned for the cuts.

Susan Smit, the superintendent of the roughly 1,000-student Wagner, S.D., schools, said she put off purchasing new language arts textbooks and didn’t fill some positions.

Another superintendent, Ron Walker of the nearly 8,000-student Geary County schools in Kansas, put off needed building repairs,and reduced contractual positions for paraprofessionals working with students in special education.

But next year might be a lot tougher. Deborah Jackson-Dennison, the superintendent of the 2,600-student Window Rock district in Arizona, is already planning to lay off staff members, and maybe even close three of her seven schools, resulting in longer commutes for students.

Opportunities to Reverse

Federal lawmakers still must finish work on spending bills for fiscal 2013, which started Oct. 1. The government has been operating under an extension measure that expires March 27.

But the spending agreement passed by the U.S. House of Representatives last week—which still must be approved by the U.S. Senate—wouldn’t do anything to stop the sequestration cuts.

The Obama administration released a statement on the bill that expressed disappointment the reductions would stay in place, but that didn’t explicitly threaten a veto. That suggests President Barack Obama would be willing to sign an agreement that keeps the cuts in place, at least temporarily.

Lawmakers also must raise the federal debt ceiling in late May, which could offer another chance to reverse the cuts.

But longtime advocates such as Joel Packer, the executive director of the Committee for Education Funding, a lobbying coalition in Washington that backs increased education spending, fear the cuts are likely to stay in place, at least for the remainder of this fiscal year.

“I think the fight has shifted to [next fiscal year] and beyond,” said Mr. Packer.

A version of this article appeared in the March 13, 2013 edition of Education Week as Amid Uncertainty, Districts Weighing ‘Sequester’ Impact


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