Education Funding

State Budget Woes Hit Schools In Deep South

By Jessica L. Sandham — February 14, 2001 5 min read
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As leaders in a growing number of states scramble to cut their budgets in the face of declining tax revenues, schools in at least two states—Alabama and Mississippi—are already feeling the pinch.

Alabama districts are moving to make steep cuts in school budgets after learning that sagging tax revenues have propelled the legislature to reduce precollegiate spending by $180 million—roughly 6 percent of the state’s total budget for K-12 schools—for the remainder of the current fiscal year. In Mississippi, meanwhile, Gov. Ronnie Musgrove recently called for a 3 percent, or $39 million, cut in education spending.

A coalition of Alabama school groups including the Alabama Association of School Boards, the Alabama Coalition for Equity, and the Mobile and Pike county boards of education, have joined together to fight their state’s budget cuts in court. In a lawsuit filed Feb. 7, the groups assert that the state’s midcourse reduction in education spending is unconstitutional.

“Our state constitution guarantees Alabama children a fundamental right to a public school education,” said Sandra Sims- deGraffenried, the executive director of the Alabama Association of School Boards. “That mandate cannot be met if $180 million is slashed from the K-12 budget nearly halfway through the school year.”

Gov. Donald Siegelman, a Democrat, said last week that he sympathized with the school groups’ aims, but that heading off the budget cuts would require a change in state law.

Despite the crunch in Alabama and Mississippi, though, education experts report that it is still too soon to tell if schools in other states will be squeezed hard by the apparent stall in the economy.

“Education is such a high priority right now, in every state and at the federal level,” said Michael P. Griffith, a policy analyst at the Denver-based Education Commission of the States. “They’re going to look everywhere else before they take a cut out of education.”

Districts Cutting Back

In Alabama, the school groups’ lawsuit came as Gov. Siegelman asked lawmakers last week to create a $50 million emergency fund that schools could tap to prevent teacher layoffs.

“This budget will put Alabama kids and classrooms first,” the governor said in his annual State of the State Address on Feb. 6. “It will get us through a period of economic uncertainty with our hopes and dreams intact.”

Despite Mr. Siegelman’s optimism, one education official characterized the funding cuts—an across-the-board reduction known as proration— as the “worst financial news in our state in 10 years.” Though districts are moving swiftly to balance budgets by reducing energy usage, eliminating travel budgets, and limiting the purchase of supplies, education groups say many will still likely face budget deficits—and layoffs—without additional state or local money.

“We’re desperate,” said Peggy Nikolakis, the school board president in the 66,000-student Mobile County district, which faces a $15 million cut in state funds for its roughly $420 million budget. “We’re cutting out all extracurricular activities, we can’t purchase textbooks, and we’re losing approximately 22 assistant principals. It’s a long list.”

In the 33,500- student Montgomery County schools, officials say they will likely have to wipe out the district’s savings account to make up for a $7.62 million shortfall in state funding for their budget of roughly $200 million. Even so, said Angela Mann, a spokeswoman for the district, “if we have a custodian or a secretary resign tomorrow, and that position is not critical, that position will most likely not be filled.”

Because Alabama earmarks much of its government spending, the legislature cannot reduce the budgets of other state agencies to shore up funding for schools, said Ira W. Harvey, an associate professor of educational leadership at the University of Alabama at Birmingham. The state’s education trust fund depends solely on sales and income taxes—revenue sources that have lagged in recent months—while other agencies receive funding from a patchwork of smaller taxes.

Under state spending provisions, “if the fund from which you happen to be funded has a shortfall, then you have proration,” Mr. Harvey said.

The approach is different in North Carolina, for example, where Gov. Michael F. Easley recently declared that the state’s $800 million budget shortfall amounts to a fiscal emergency. Mr. Easley, a Democrat, has vowed to continue school improvement efforts despite the crisis, and education appeared to have dodged the knife last week when the governor announced $1 billion in budget cuts.

Mr. Griffith of the ECS noted that states that rely heavily on sales taxes are more likely to feel the effects of an economic downturn faster than those that depend on more stable revenue sources, such as property taxes. Given that Alabama has one of the lowest property-tax rates in the country, some Democratic lawmakers say the current school funding crisis highlights a need to raise taxes or reform the way education is financed.

“I think this is the time that we should come to the plate to discuss increased property taxes for the state of Alabama,” said Sen. Vivian Davis Figures, a Democrat and the chairwoman of the Senate education committee.

Still, others detect little political will to retool the state’s tax system, given that Gov. Siegelman has consistently opposed new taxes.

“Let me say it plainly, this governor is not going to raise taxes on Alabama families,” Mr. Siegelman said in a budget address on Feb. 2. “So we have no choice but to reduce spending, just like Alabama families would do in a similar situation.”

Mississippi Feels Squeeze

Mississippi schools are also facing budget cuts tied to a shortfall in revenue from state sales and personal-income taxes. Earlier this month, Gov. Musgrove ordered $94.3 million in spending reductions, including a 3 percent—or $39 million—cut from this year’s state education budget.

“Because the final revenue estimates used in last year’s budgeting process were so off the mark, we have been forced to reach into education budgets,” the Democratic governor said in a Feb. 2 statement announcing the cuts.

But last week, the Senate approved a proposal to take $39 million from the state’s budget reserves to restore the public school funding. The measure now awaits action by the House of Representatives.

Sen. Jack Gordon, a Democrat who chairs the upper chamber’s appropriations committee, said the governor is limited in what he can take out of the state’s rainy-day fund without legislative approval. So it falls to lawmakers to prevent schools from having to “lay off teachers and other personnel,” Mr. Gordon said.

John L. Hartman, the executive director of the Mississippi School Boards Association, said the fiscal solvency of about two-thirds of the state’s districts hinged on restoring the funding. Without it, he said, “the districts would be placed in a position of ending the school year with a deficit, which is a violation of state law.”

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A version of this article appeared in the February 14, 2001 edition of Education Week as State Budget Woes Hit Schools In Deep South

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