Districts Wary Amid Federal Fiscal Showdown

By Alyson Klein — September 29, 2015 5 min read
Leaders in Congress, including Senate Majority Leader Mitch McConnell, R-Ky., center, were scrambling last week to put together a strategy that would lead to passage of a federal spending measure, as the Sept. 30 end of the fiscal year loomed. Failure to pass a budget in time in 2013 resulted in a government shutdown felt acutely by some programs. Joining McConnell at a news conference last week were Sens. John Barrasso, R-Wyo., left, and John Cornyn, R-Texas.

Officials of school districts that count on money from the federal Impact Aid program, along with some Head Start administrators, were crossing their fingers last week that Congress could come to an agreement on spending—even a temporary one—and avert a repeat of the 2013 government shutdown that caused serious disruption and lost momentum.

Congress faced a standoff over the budget sparked by fierce opposition by some Republicans over funding for Planned Parenthood. Lawmakers must come to an accord on spending by Sept. 30, the end of fiscal year 2015, or many government operations would cease until an agreement can be hammered out.

Selective Hit

Most schools and K-12 programs wouldn’t feel an immediate pinch if the federal government were to close its doors temporarily. But the shutdown two years ago had a major effect on Head Start, the early-childhood program for low-income families funded through the Department of Health and Human Services, and some districts that rely on impact aid, the nearly $1.3 billion Education Department program that helps schools with a big federal presence—such as a military base or an American Indian reservation—make up for lost revenue.

Some Head Start centers were forced to close their doors for a week or more, and a handful of impact-aid districts were forced to borrow money and were worried about making payroll.

With a budget deadline looming, the Department of Education and other federal agencies are dusting off their shutdown plans.

In 2013, more than 90 percent of the Education Department’s employees—about 4,000—didn’t report to work, making it tough for state education agencies and school districts with questions for the federal government. And there were other complications, such as problems delivering applications for Race to the Top district grants. (The department ultimately extended the deadline for the program.)

This month’s drama is just the first in a series of expected fiscal showdowns. There are plenty of other opportunities for budget battles throughout the fall, as Republicans in Congress tangle with the Obama administration on a range of issues, including how to get rid of the spending squeeze known as sequestration.

“Even if there’s no shutdown now, that’s not a solution. That’s just the kick-the-can-down-the-road option,” said Joel Packer, the executive director of the Committee for Education Funding, a lobbying group. The ultimate outcome of that—a longer-term spending agreement—could have major implications for K-12 programs, some of which, such as Investing in Innovation grants, may end up on the chopping block, he said.

By contrast, a shutdown, especially a short one, would have a fairly limited impact. Most federal money for K-12 education, such as state grants for special education and Title I grants to help districts cover the cost of educating disadvantaged students, is provided a couple months before the start of the school year.

But Head Start is on a different schedule—its checks go out to different batches of grantees on a rolling basis throughout the year. Last week, the National Head Start Association projected that 23 grantees across 10 states and Puerto Rico might see their payments disrupted if the government shuts down Oct. 1. It wouldn’t be the first time—in 2013, a handful of centers were forced to close their doors.

William Bevacqua, the assistant to executive director of Action for Bridgeport Community Development in Connecticut, said its Head Start center had to lay off staff members and could not accommodate the 900 or so children it served.

“A great many of [our] families are working parents and had no alternative but to stay home and care for their children,” he said. “It was a real agonizing period of time for those folks.” The state ended up stepping in and providing temporary financing, Bevacqua added.

Now, Bevacqua and his colleagues are “saying a few extra prayers"—and staying in regular touch with their congressional delegation. “We are at our wits’ end to determine how to deal with it because we face the same problem again,” he said.

Some districts that receive impact aid are in a similar boat. About 100 districts of the 1,200 or so impact-aid recipients earlier this year asked the Education Department for early funding, a sign that the money is a key component of their annual budgets, said Jocelyn Bissonnette, the director of government relations at the National Association of Federally Impacted Schools.

A shutdown that lasts only a couple days probably wouldn’t be a big hit, she said. But a protracted shutdown could force a handful of districts that rely heavily on impact aid to dip into reserves or even borrow money. And the closure would come on top of a couple years of flat funding for the Impact Aid program, even as enrollments and need grows, she added.

“We have a couple districts that are nervous about payroll in October, November” if they don’t get their payments, Bissonnette said.

Budget Battles

And, even if Congress is able to sort out the Planned Parenthood controversy, lawmakers will have to navigate another sticky situation: the looming expiration of a budget deal negotiated in 2013 by Sen. Patty Murray, D-Wash., and Rep. Paul Ryan, R-Wis., which offered a temporary reprieve from the major programmatic cuts known as sequestration.

That deal, which set broad spending levels for the past two years, is set to expire this month. And Congress and the Obama administration haven’t come to an agreement on whether to get rid of sequestration, which is aimed at trimming the deficit, but has led to some serious belt-tightening for both military and domestic programs.

If sequestration stays in place, it could mean major cuts to education. The House Appropriations Committee approved a bill that would cut funding for the Education Department and its programs by $2.8 billion compared to its current level, $67.2 billion. And the panel that oversees education funding in the Senate passed a bill that would cut funding by $1.7 billion.

Both bills would take aim at key Obama priorities, eliminating or shrinking the School Improvement Grant program, the Investing in Innovation initiative, and the Preschool Development grants.

District-Level Worries

Lance Gibbon, the superintendent of the 5,600-student Oak Harbor, Wash., school district near Whidbey Island Naval Air Station, is worried about both a shutdown and a restart to sequestration. Impact aid has largely escaped the brunt of the cuts since the program has been level-funded, which still doesn’t leave room for enrollment growth, advocates say. Gibbon said the money—about $4 million a year on a $60 million budget—is critical.

If there are further cuts to federal aid or a long shutdown, the district may have to put off buying curricular materials aligned to new standards and much-needed facility repairs, including fixing a sagging parking lot. And the district may have to delay hiring new staff, despite an expected influx of students.

“Our community has generously supported levies and bonds, but our federal government has failed to do its part,” Gibbon wrote in an email.

A version of this article appeared in the September 30, 2015 edition of Education Week as Federal Fiscal Showdown Puts Districts, Agencies on Edge


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