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Education Funding

Fiscal Cliff: How Would Federal Spending Cuts Affect Your District?

By Alyson Klein — December 04, 2012 2 min read
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If lawmakers don’t act to head off a series of automatic spending cuts, states and districts around the country will feel a squeeze—but some may be more heavily impacted than others, according to an analysis released today by the American Association of School Administrators.

AASA, which represents superintendents and other administrators, took a look at how every state and virtually every school district around the country would be impacted by automatic spending cuts (known as sequestration), which are set to hit on Jan. 2. Unless lawmakers and the administration can reach a long-term deal on deficit reduction, many federal programs, including most in the U.S. Department of Education would face a cut of roughly 8 percent. Most districts wouldn’t begin to feel the pinch until the new school year starts in the fall. More here.

Federal spending makes up a relatively small share of the budget in most school districts. In fact, the feds pick up the tab for about 10 percent of K-12 spending across the country. During the 2010-11 school year, which was used for the analysis, federal money accounted for 12.3 percent of schools’ revenues nationwide, according to the report. More on that below.

But for some districts, the percentage of federal funding was much higher.

Federal revenues account for more than 15 percent of the operating budget in more than half of the school districts in 15 states, including Alaska, Alabama, Arkansas, Arizona, Florida, Georgia, Idaho, Kentucky, Louisiana, Missouri, Mississippi, New Mexico, Oklahoma, South Carolina and West Virginia, according to the report. (Those calculations take into account spending on school nutrition, which wouldn’t be hit by the automatic cuts.)

That means districts in those states will likely feel the trigger cuts more than others.

“Where federal revenues represent larger portions of overall operating budgets, the cuts of sequestration will be deeper and more damaging,” the report says.

Interestingly, the majority of the states that seem to be most reliant on federal education funding are “red” states that supported the GOP nominee, Mitt Romney, over President Barack Obama in the last election. And some of those states are particularly politically significant (for instance, Kentucky is home to Sen. Mitch McConnell, a Republican and the minority leader.) And Florida is a notoriously important swing state.

So what does all this mean for negotiations on how to fix the so-called ‘fiscal cliff’ which includes the spending cuts, plus a whole host of tax issues? Tough to say. Rep. John Boehner, the speaker of the House, who is considered the key negotiator for the Republicans on the fiscal cliff, has said he would like to trim spending, but he hasn’t been specific about whether K-12 should be on the chopping block. And while the administration has pushed to increase education spending in its budget requests, it’s unclear whether the president and Democrats would be willing to accept some reductions.

One note about the analysis: During the 2010-11 school year the federal share of K-12 spending was particularly high because of the Education Jobs Act, which provided $10 billion to help districts stave off layoffs, and leftover funding from the American Recovery and Reinvestment Act, which provided about $100 billion for education. Also, state revenues were particularly low. However, the 2010-11 data represents the best and most recent available, said Noelle Ellerson, the assistant director of policy and advocacy for AASA, who wrote the analysis.

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