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New School Year Brings Deep Cuts for Education

September 16, 2011

The Center for Budget and Policy Priorities has a new report out that is very daunting for teachers, our students, and public education of all forms.  I would take the link to read the article, some of it is posted below.  If you are reading this and you live in California, we have been one of the leaders in funding cuts per pupil, look at the charts below:

As a new school year begins, elementary and high schools are receiving less state funding than last year in the great majority of states for which the necessary data are available, and are now funded at below pre-recession levels in most of these states. In at least 10 states, the shortfall compared with pre-recession levels exceeds 10 percent.

These are the results of an initial analysis of state budget documents in 24 states where the necessary data were available. These 24 states include about two-thirds of the nation’s school-age population.

The analysis illustrates the continuing effect on state-funded services like education of the 2007-09 recession and slow recovery. The failure of the federal government to extend emergency fiscal aid to states and school districts and the failure of most states to enact needed revenue increases have exacerbated the cuts.

Specifically, 21 of the 24 states analyzed are providing less funding per student to local school districts in the new school year than they provided last year, and 17 of the 24 are providing less than they did before the recession, after adjusting for inflation. In 10 of these 24 states, per student funding is down by more than 10 percent from pre-recession levels. The three states with the deepest cuts — South Carolina, Arizona, and California — each have reduced per student funding to K-12 schools by more than 20 percent.

State-level K-12 spending cuts of this magnitude have serious consequences for the national economy, both by reducing purchasing power in the short run and by undermining the nation’s economic competitiveness in the long run.

  • State-level K-12 cuts have large consequences for local school districts. Some 47 percent of total education expenditures in the U.S. come from state funds (the exact share varies by state). Cuts at the state level mean that local school districts have to either scale back the educational services they provide, raise more revenue to cover the gap, or both. In particular, the cuts may have particularly affected school districts with high concentrations of children in poverty. States typically distribute general education aid through formulas that target additional funds to school districts with large shares of low-income and other high-need children and/or with lower levels of taxable wealth. As a result, reductions in “formula” funding may result in particularly deep cuts in general state aid for poorer districts unless a state goes out of its way to protect them.
  • The cuts have extended the recession and slowed the recovery. Federal employment data show that school districts began reducing the overall number of teachers and other employees in August 2008, when the first round of budget-driven cuts began taking effect. The job losses have accelerated in the last year as the cuts have deepened; by August 2011, local school districts had cut 293,000 jobs nationally. These job losses have reduced the purchasing power of workers’ families, in turn reducing overall consumption in the economy and thus extending the recession and slowing the pace of recovery.
  • A further negative economic consequence of the cuts is that they counteract and sometimes undermine education reform and more generally hinder the ability of school districts to deliver high-quality education, with long-term negative consequences for the nation’s economic competitiveness. Many states have undertaken a number of important school reform initiatives to prepare children better for the future, but deep funding cuts counteract and sometimes undermine these reforms. At a time when the nation is trying to produce workers with the skills to master new technologies and adapt to the complexities of a global economy, large cuts in funding for basic education threaten to undermine a crucial building block for future prosperity.
  • Local school districts typically have little ability to replace lost state aid on their own. Given the sorry state of many of the nation’s real estate markets, it is difficult for many school districts to raise more money from the property tax without raising rates — and rate increases are often politically very difficult. As a result, property tax and other local revenues were actually lower in the 12- month period ending in March 2011 than they were the previous year. However, at least some localities are considering and in some cases enacting property tax increases — a sign of the challenges that schools face.

States Are Cutting K-12 Education Formulas — the Primary Funding Source for Schools

States typically distribute the largest share of their K-12 education funding through formulas that allocate money to school districts, with some share of the funds often targeted to districts that have higher levels of student needs (such as the concentration of students from low-income families) and less ability to raise funds from local revenue sources (primarily the local property tax).

To help states sustain their education systems during the recession, the federal government in recent years has provided emergency education aid to states. Under the State Fiscal Stabilization Fund established by the American Recovery and Reinvestment Act (ARRA) in 2009, states received $39 billion in federal aid targeted at K-12 and higher education funding. And through the Education Jobs Fund enacted by Congress in August 2010, states received an additional $10 billion in federal aid aimed at saving education jobs in schools, colleges, and universities.

States distributed most of the portion of this funding that went to K-12 school districts using the same formulas they normally use to distribute state education funding. Indeed, both ARRA and the Education Jobs Fund generally requiredstates to distribute the funding in this way. [1]

Both ARRA and the Education Jobs Fund required states to maintain their K-12 education spending at certain levels, to assure that the federal aid was used as intended to help states sustain their education systems during the recession.[2]

ARRA also provided states with much more narrowly targeted forms of federal education aid. For example, ARRA provided $13 billion in targeted, additional aid for schools with a large share of low-income students (Title I schools), and $12 billion in aid targeted to help schools sustain education programs for disabled students. These funds are targeted to particular student populations and hence typically are not distributed through the funding formulas used to distribute general state aid.

Cuts to state formula funding often have very large consequences for local school districts. Some 47 percent of total education expenditures in the U.S. come from state funds (the exact share varies by state), and most of that is through the formulas. Cuts at the state level mean that local school districts have to either scale back the educational services they provide, raise more revenue to cover the gap, or both. In addition to the funding distributed through general aid formulas, states may or may not use separate allocations to fund items such as pupil transportation, contributions to school employee pension plans, and teacher training; some of those allocations also have been cut.

Moreover, since states typically distribute general education aid through formulas that target additional funds to school districts with large shares of low-income and other high-need children, reductions in “formula” funding may result inparticularly deep cuts in general state aid for districts with high concentrations of low-income students. ARRA’s additional federal aid for Title I schools and for schools serving disabled students helped soften the blow of the recession on the children in these schools. But with the federal aid now expiring, reductions in state formula funding may be pulling in the opposite direction by reducing funding disproportionately for districts with high concentrations of low-income students. (A number of states, such as New Jersey, are under court order to avoid cuts that hurt high-poverty districts, in which case middle-income districts may be hit harder.)

States Have Cut Education Formula Funding Deeply Since the Recession Began

As of late August 2011, there are 24 states for which data are readily available to compare state K-12 formula funding in the current school year with funding in earlier years.[3] (Other states publish education funding data in ways that make it more difficult to make historical comparisons, but it is reasonable to suspect that some or many of those other states also are cutting education funding.) These 24 states are home to two-thirds of the nation’s schoolchildren. Overall, these states have been facing levels of fiscal stress that are roughly reflective of the nation as a whole, with average shortfalls closed as a share of their budgets for fiscal year 2012 very close to the national average.[4]

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