Despite stimulus, schools feel budget pain

More than $100 billion in federal economic stimulus will help public schools and colleges survive the recession over the next two years, and for districts in dire straits, that money is a lifeline. 

But some states’ finances are so precarious their schools are still going to face large cuts. That’s why the Los Angeles school district canceled summer school classes, several Idaho districts have declared a state of financial emergency, and some states are considering shortening the average 180-day school year even as U.S. Education Secretary Arne Duncan pushes for students to spend more time in school. 

“Pretty much every school system I know is making cuts to their budget because of the economy. In some cases the stimulus money prevented cuts for some of those school systems, but in the vast majority of others, it didn’t because the cuts were so massive,” said John Musso, the executive director of the Association of School Business Officials International. 

This year, 26 states made midyear cuts to elementary and secondary education and 31 made cuts to higher education, according to a recent report by the National Association of State Budget Officers and the National Governors Association. Some of the cuts were approved before Congress passed the stimulus relief and were rolled back after the first stimulus dollars started flowing to the 29 states that so far have applied for their education allocations.

In Oregon, 22 districts had planned to cut the current school year short before they were saved by the stimulus. “The districts had no choice,” said Craig Hawkins, a spokesman for the Confederation of Oregon School Administrators. “When you’re midway through the year and you lose money, there’s only so many options.”

Part of the education stimulus money is being sent to the states specifically for certain populations such as disabled or low-income students. Another pot of education money, which the states must apply for and would have greater flexibility to spend, is based on states’ school-aged population. 

Legislatures in at least 27 states are proposing cuts to K-12 classes in the next school year. States with large gaps – such as Nevada, New Jersey, Oregon, Rhode Island, Washington and, facing the biggest budget crisis, California – stand to suffer the most, even when lawmakers factor in the stimulus help. For example, California’s share of the stimulus so far is $4 billion, but Gov. Arnold Schwarzenegger (R) has proposed $6 billion in education cuts through the next school year.

The budget squeeze means districts nationwide are planning steps such as increasing class sizes, dropping elective classes, charging more for school lunches, reducing transport and other services, putting off new textbook purchases and even closing schools.

They’re also laying off people – the main thing the stimulus was meant to stop. Washington state, which cut education by $800 million, could lay off 3,000 to 5,000 teachers. Its Issaquah School District sent layoff notices to 158 of its 1,097 teachers last month, though it hopes to bring back up to 70 teachers once the budget is finalized.

Even if schools aren’t laying off teachers, they’re trying to save money by cutting salaries. Oregon’s largest district, Portland Public Schools, has released a budget that cuts $32 million mainly by furloughing teachers for five of their professional development days.

 

In some places, teachers’ contracts make it tough for district administrators to make cuts. Nevada passed a budget that calls for a 4 percent cut in teachers’ salaries, but Washoe County Schools, for example, is in the middle of a four-year contract that stipulates it cannot cut salaries.

 

Idaho lawmakers, who this year cut state education funds by 7.7 percent – the first time ever the state didn’t increase education funding – also enacted a law that lets districts declare a financial emergency, which allows them to renegotiate teachers’ contracts to cut pay and hours. New Plymouth School District has completed the process, and now every district employee will be furloughed for three days.

California schools will deal with the deepest cuts. With the state facing a $24 billion budget hole in the next fiscal year, Schwarzenegger wants to end state funding for school buses and let districts shave 7.5 days off the school year. The governor proposed to cut $4.5 billion from K-12 education and community colleges next year and another $1.6 billion in the current fiscal year that will end in weeks.

For California districts, larger class sizes and layoffs are a given. They’re also making tough choices about things like ending Advanced Placement classes, cutting library services, and decreasing literacy programs.

“We are in the process … of decimating our schools. We’re talking about massive, unprecedented slashing of base funding for our students,” said Brian Lewis, the executive officer of the California Association of School Business Officials. “Schools have been quite successful at doing more and more with less and less over the years. Then we get hit with this tremendous cut that’s going to push districts over the edge of financial insolvency.”

 

Higher education is also taking a hit. For the next school year, 28 states have proposed cutting taxpayer support for state colleges and universities. Arizona, Kansas, Louisiana, Massachusetts, Nevada, New Jersey, North Carolina, Rhode Island and Washington are among the states that have cut or are considering double-digit cuts to higher education. Universities are freezing salaries and cutting classes and degree programs to cope.

 

“Short of a significant economic turnaround in revenues to the states, public higher education across the country is going to potentially (fall off) a funding cliff” next fall, said Dan Hurley, director of state relations for the American Association of State Colleges and Universities. 

Students’ pocketbooks will be affected. Florida previously prided itself on its below-average tuition, but this year the state allowed its 11 public colleges to raise tuition 15 percent each year until it reaches the national average – the state’s largest tuition hike in 17 years. Washington state also is allowing its universities to increase tuition 14 percent each of the next two years to offset reduced state funding. 

California could become the first state to eliminate its main financial aid program while raising tuition. The governor is proposing to end the Cal Grant for all new low-income students. 

Although the situation for schools would have been disastrous if not for the education stimulus, one problem is that states are planning to spend so much of the money upfront. On average, the states that have requested education stimulus money will spend about 39 percent of the money in fiscal 2009 and 53 percent in 2010, leaving only 8 percent for 2011, said Mike Griffith, a school finance expert with the Education Commission on the States (ECS) who analyzed the applications of the first 26 states that applied.

 

Current shortfalls are so high that 12 states – California, Florida, Georgia, Idaho, Illinois, Michigan, Nevada, New Jersey, Rhode Island, Utah, Virginia and Washington – will have no education stimulus money left for 2011, according to their applications.

 

That “means there is very little safety net, come 2010-11,” Griffith of ECS said. “We’re looking at 2010-11 being as bad a state budget year as 2009-10, and we’ve got dramatically less money available to make up the difference. … Even those places that are making small-to-no cuts now might have to make fairly dramatic cuts for the 2010-11 year.” 

See Related Stories: 
Reports: Bleak state budgets through 2011 (6/4/2009)
State budget gaps top $200 billion; fees, tax hikes in the works (4/24/2009)
Economics sore subject for public schools (1/15/2009)
Tough economy hammers schools, colleges (11/17/2008)

Contact Pauline Vu at pvu@stateline.org.