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Budget Woes Have Several States Scrambling to Make Ends Meet

By Katie Ash — October 05, 2007 3 min read

Even as the 2008 fiscal year gets into full swing for most states, a handful—including Florida, Michigan, and Illinois—are still ironing the kinks out of their cash-strapped budgets.

Florida last week convened a 10-day special legislative session, scheduled to wrap up Oct. 12, with the aim of making about $750 million in cuts to help fill a $1.1 billion hole in the state’s $71 billion budget.

The expected cuts in public education include $147.5 million for a year-old merit-pay plan for teachers. Other likely moves include reduced state aid for students attending private colleges and universities and increased tuition rates for community colleges and state universities.

The performance-based-pay plan, called the Merit Award Program, was implemented this year in an effort to revise the controversial Special Teachers Are Rewarded plan, which was opposed by teachers’ unions across the state.

The Merit Award Program, or MAP, gives districts more control over how teachers are rewarded than did the previous plan, but it remains widely unpopular.

“Fewer than 20 counties out of 67 have decided to adopt it,” said Mark Pudlow, a spokesman for the Florida Education Association. “MAP is not as restrictive as STAR was, but it’s still not tremendously popular amongst teachers.”

The proposal would delay the funds for MAP, making them available for school districts on July 1, but taking them out of this year’s budget.

Overall, Florida lawmakers are hoping to keep K-12 budget cuts to about 1 percent of the total $33.3 billion for schools, said Jill Chamberlain, a spokeswoman for Speaker of the House Marco Rubio, a Republican. “To the extent that it is possible, the House and Senate are trying to keep any cuts to a minimum,” she said.

Jim Warford, the executive director of the Florida Association of School Administrators, has anticipated the education budget crunch.

The department has even gone through budget-cutting exercises at various levels to help districts prepare, he said.

Michigan Extension

In Michigan, which has struggled for years with a slack economy, a budget impasse led to a five-hour partial government shutdown Oct. 1—the start of the new fiscal year—until lawmakers agreed on a 30-day continuation budget that will allow the state to operate under last year’s funding levels for this month.

Gov. Jennifer M. Granholm, a Democrat, granted lawmakers a 30-day extension starting Oct. 1 to pass a final fiscal 2008 budget. The governor has suggested a 2.5 percent increase in the K-12 education budget, which was $12.1 billion in fiscal 2007.

Along with the budget extension, Michigan lawmakers approved a controversial change that requires health-care providers to make claims data available to school districts with more than 100 employees. Previously, such information was kept private, a practice that districts complained limited competitive bidding for health services.

The state also will cut back on the amount it contributes to the health-care plans of retired education employees, paying up to 90 percent of their monthly premiums instead of the full amount. The retired employee is then responsible for paying the remaining amount.

In another change, new education employees earning more than $15,000 a year will be required to contribute 2 percent of their salaries to their retirement plans.

As an efficiency measure, the legislature also passed a requirement that all intermediate school districts—conglomerations of school districts in a regional area—follow a common calendar.

Illinois Squeeze

In Illinois, schools are beginning to feel the effects of a legislative holdup that has prevented them from receiving this year’s promised $550 million increase in state aid for education.

Typically, the budget is passed before the legislature adjourns its spring session in May. This year, lawmakers could not come to an agreement and instead passed a $50.7 billion budget in August during an extended session. However, the legislature is still debating the budget-implementation bill, which details where the budget goes.

In the meantime, schools are being given state funding based on fiscal 2007 gross levels, totaling $6.5 billion for K-12 education, said Matt Vanover, a spokesman for the state board of education.

But Illinois is still a step ahead of Wisconsin—the only state that still has not passed a budget for this year.

The budget is already four months past due in Wisconsin. Gov. James E. Doyle, a Democrat, last week warned of severe consequences. The fallout, he said, could include teacher layoffs, increased tuition for state universities, and cuts in student financial aid.

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