Economics Sore Subject for Public Schools

Two years ago, California Gov. Arnold Schwarzenegger (R) vowed that 2008 would be the “year of education.” He laid the groundwork by establishing a high-profile commission that urged an overhaul of the state public school system – and $10.5 billion in additional spending.

But that was before the nation dove headlong into economic crisis, and before California policymakers realized their state would be deep in the red. In late 2008, Schwarzenegger met with educators and dropped this bombshell: Schools needed to brace for cuts of more than $2 billion.

“We thought we were going to have a conversation about how to adequately fund education, [but] we’re having a conversation about where else can we cut. It’s the wrong conversation,” said Brian Lewis, executive director of the California Association of School Business Officials.

States traditionally have been reluctant to cut school funding during hard times because education is “politically sacrosanct,” said Scott Pattison, executive director of the National Association of State Budget Officers. During the economic downturn after the Sept. 11, 2001, terror attacks, half the states still managed to avoid major school aid cuts, he said.

This time, up against the worst economic crisis in decades, schools are not immune. Georgia, Hawaii, Nevada and South Carolina are among states that cut into elementary and secondary education budgets for the current school year. In November, North Carolina schools were forced to return $58 million to help cover an expected shortfall.

Alabama, California, New York, Utah, Virginia and Washington expect to reduce school funding this year. Alabama schools could face the largest cuts in 48 years. Washington is considering cuts of more than $1 billion. In California, Republican legislators have proposed cuts of up to $10 billion.

The story is the same throughout the country. States and school districts have begun pinching pennies wherever they can. Economy measures include changing school bus routes, forcing children to walk farther; buying fewer new library books and assigning librarians to multiple schools; and asking parents to help supply such basics as toilet paper. For the first time in a generation, New York’s Schuylerville Central School District was forced to boost its school lunch price – to $1.50 from $1.25.

Art, music and other elective classes are getting the ax, and classes are becoming more crowded. Only two years ago, Georgia Gov. Sonny Perdue (R) said he would withhold state funding if school districts didn’t comply with a 2006 state law limiting class size; now the state is waiving the requirement until at least 2010.

“We would’ve had to hire about 15 to 16 more teachers. … If we didn’t have the waiver, the cost would’ve been an additional million dollars,” Ron Collier, chief financial officer of Georgia’s Bibb County School District, told Stateline.org .

There aren’t many places for schools to find additional funds. Bibb County is considering selling some vacant school properties costing the district money for upkeep. The Los Angeles School District might sell billboard space on school grounds that face a freeway, a move that could generate up to $30,000 a month. Nevada’s Clark County School District, which has to find cuts of at least $120 million in each of the next two school years, has discussed selling ads on school buses.

The shortage of funds comes as schools are struggling to comply with the increasingly tough standards of the federal No Child Left Behind Act, which requires that students show annual improvement on state tests in math and reading.

Schools with inadequate proficiency incur sanctions, such as having to offer tutoring or allowing students to transfer to another school.

The law’s toughest requirement is that every child have grade-level skills in reading and math by 2014, a goal many education experts regard as impossibly ambitious. One of the pressing tasks facing the new Congress is the reauthorization of No Child Left Behind; at this point, it’s more than a year overdue.

President Barack Obama has called for reforming the law. State officials hope the revised version will offer more flexibility, place less emphasis on high-stakes testing and provide more federal money to meet the law’s demands. But with more pressing priorities – the economic crisis and the wars in Iraq and Afghanistan – congressional reauthorization could be delayed until next year or later.

In the meantime, the U.S. public school system will be feeling the pressure. “Schools are facing a double-whammy, with increasing demands to raise test scores … and the economic crisis potentially cutting back on their funding,” Jack Jennings, president and CEO of the nonpartisan Center on Education Policy, which analyzes the effects of the No Child law, said in an interview.

Even if the federal government increases education spending – and prospects are better under Obama than the previous administration because the new president in principle favors such a move – it would not make a huge difference. The federal share of public school funding is only about 9 percent.

Higher Education Also Pinched

While the money situation is worrisome for elementary and secondary schools, it’s a bigger headache for state colleges and universities. When the South Carolina Legislature met in October to plug a $488 million budget gap, lawmakers cut elementary and secondary school funding by 3.6 percent and higher education by 14 percent.

Governors in several states are proposing big cuts in state college and university spending this year. Louisiana’s public higher education system is braced for cuts os $109 million. Some institutions are denying eligible students admission for lack of funds: The 23-school California State University system – the country’s largest four-year system – plans to cut enrollment unless the state provides more money. It would be the first time that the system denied seats to students who met admission standards.

With less money, colleges have put construction projects on hold, dropped programs and reduced course offerings. The belt-tightening strikes at the heart of an economic strategy many states have pursued in recent years: making state college more affordable in hopes of having a more-educated workforce, a major factor in attracting business.

“Under these circumstances it will not be surprising if we see significant increases in tuition next year,” said Molly Corbett Broad, who heads the American Council on Education , an association of higher education officials. The economic crisis, she said, “is looking as if it potentially could be a once-in-50- years kind of thing. A lot of folks are comparing this with what happened in the Great Depression.”

State college representatives in Mississippi and Tennessee warn that they might have to impose significant tuition increases in fall 2009. Schools in Rhode Island and Michigan aren’t waiting: They’ve already announced midyear tuition hikes – usually a measure of last resort.

Outlook Grim

For public schools, an already bad situation could get worse: Much of their funding is from property taxes, and home values have fallen sharply. But property taxes don’t yet reflect lowered values. When that happens, schools will get even less money from local communities. But district budget officers insist they’ve already economized.

“We can’t cut anymore,” said California’s Lewis. “The very question, ‘Where else are you going to cut?,’ begs the assumption that there’s somewhere else to cut. It’s a phony question. There’s nowhere else to go.”

This article is an excerpt from the “State of the States 2009”, Stateline.org’s annual report on significant state policy developments and trends.