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Can Ed Reform Thrive During State Budget Slumps?

By Michele McNeil — June 19, 2008 2 min read

One of the most disturbing things I heard today during a press conference about state budget conditions was this: the economic downturn in many states could last three or four years.

That’s about as long as the next president’s first term.

Even if the national economy takes an unexpected upward swing, states are always slower to come out of slumps. Ray Scheppach, the executive director of the National Governors Association, explained that it’s because states typically don’t feel the negative impact from unemployment (which means fewer dollars coming in from income taxes) until months after job losses hit their peak. For example, even though the recession in the early 2000s officially ended in 2001, states had to make huge budget cuts in 2002 and even into 2003. The NGA and the National Association of State Budget Officers unveiled the latest edition of their fiscal survey today, which is quite gloomy (unless you’re in an energy- or food-crop-rich state like Texas, Wyoming, or North Dakota.)

When considering the national economic woes and the presidential candidates, it’s important to look at state budgets for several reasons. First, states (and their local governments) are responsible for paying nearly 90 percent of the tab for K-12 education. Second, K-12 education is the biggest line-item in a state general-fund budget. And third, states are often the incubators of education reform. (If you need another reason, then consider that Obama is meeting with Democratic governors on Friday to involve them in the larger discussion about the economy.)

I can think of plenty of ways that a drawn-out slowdown in the states could affect the education plans of the next president, whether it be Sen. Barack Obama or Sen. John McCain.

For one, Sen. Obama’s promised $4,000-a-year tax credit to offset the cost of college tuition won’t go nearly as far if higher ed institutions jack up tuition and fees because state lawmakers cut their funding. (Higher ed is traditionally cut long before K-12 education is.)

Sen. McCain’s pledge to freeze discretionary spending, including Title I money that accompanies No Child Left Behind, would be even more painful.

States and school districts, though always welcome to new money, are often hesitant to start new programs if they worry the funding source might disappear. Overall, I wonder how any new programs proposed by either candidate—whether it be funding to expand technology (which McCain’s camp has talked about) or devoting more money to recruiting teachers (Obama’s plan)—will be embraced if states are still struggling to pay for the basics. It will be hard for education leaders who are involved in the day-to-day running of schools to think about revolutionizing K-12 when they’re struggling to pay the salaries of their existing teachers, or the fuel to bus kids to and from school.

Just one more reason why the economy and education are so closely tied together.