Academic journal article Phi Delta Kappan

How to Steer the Tough Budget Road Ahead: Accelerate Your Performance: The Fiscal Nightmare Isn't over Yet So Educators and District Leaders Would Do Well to Look Ahead with No Illusions and a Resolve to Make the Most of This Difficult Time

Academic journal article Phi Delta Kappan

How to Steer the Tough Budget Road Ahead: Accelerate Your Performance: The Fiscal Nightmare Isn't over Yet So Educators and District Leaders Would Do Well to Look Ahead with No Illusions and a Resolve to Make the Most of This Difficult Time

Article excerpt

Despite the pervasive sense that K-12 schooling has been hammered by the recent recession, K-12 spending has fared better than one might think. Nonetheless, things are likely to remain tight much longer than we might wish. Knowing how to respond to the looming challenges is something that will pay hefty dividends in the half-decade to come.

It certainly feels like things have been tough so far. Yet, U.S. Department of Education data show that school-district staff increased by 2.3% nationally over the course of the Great Recession (Education Intelligence Agency, 2010). During that same period, private-sector jobs fell by 6.8%. While national per-pupil spending data isn't tallied yet for the last two years, state legislatures have generally sought to protect K-12 while taking enormous bites out of spending on public safety, transportation, higher education, and other services.

Unfortunately, national education leaders have too rarely been candid with educators and communities about where matters stand. In 2010, while touting the $10-billion federal "Edujobs" bill, Secretary of Education Arne Duncan said that while "we want people to be responsible to be efficient," districts had already been cutting for five or seven years and had cut "through ... fat, through flesh, and into bone" (U.S. Department of Education, 2010). But Duncan's claims were inaccurate. The National Center for Education Statistics, for instance, reports that, nationally, per-pupil spending increased 16% from 2000 to 2007. Indeed, nominal per-pupil spending rose every year from 1933 until 2007.

While educators hope better days are just around the corner, the reality is that school district budgets are likely to be constrained at least through 2015. For starters, the Center for Budget and Policy Priorities noted in March that, "The upcoming fiscal year (FY2012) is shaping up as one of the most difficult budget years on record for states. Thus far, some 44 states and the District of Columbia are projecting budget shortfalls totaling $112 billion for fiscal year 2012." CBPP also reports, "Already, some 26 states are projecting shortfalls totaling $75 billion for FY 2013 ... Once all states have prepared estimates, this total is likely to grow. "

Unemployment is expected to remain above 8% into 2012 and above 6% through 2015. While the worst of the recession may be over, Nobel Prize-winning economist Joseph Stiglitz cautions: "This is an anemic recovery ... and is likely to remain anemic" (Heath & Salamat, 2010). Stateline reported in January that "revenues--while up a bit now--plunged so deeply in 2008 and 2009 that it will take years for many states to return to levels they saw before the recession" (Goodman, 2011).

More specifically, four factors will continue to squeeze states and districts. First, schools have been cushioned for most of the past two years by tens of billions in federal stimulus aid, and then by 2010's Edujobs bill. Those dollars are now almost tapped out, leaving districts that used them to minimize cuts in staff or services in a position where they're about to confront dramatic shortfalls. CBPP has noted that in fiscal 2011, states had "approximately $59 billion in federal aid to assist in closing budget shortfalls that totaled some $130 billion. For 2012, states are already reporting shortfalls that total $112 billion with only $6 billion" still available.

Second, while the worst of the real estate collapse is past, the impact on property tax collections hasn't yet fully rippled through. Homeowners are well aware that state property tax assessments tend to lag market valuation by two to three years. That means most states are still collecting property taxes based on 2008 or 2009 valuations. With most experts expecting residential real estate to bottom in 2012, and commercial real estate to bottom in 2012 or 2013, there will be a downward gravitational pull on property tax revenues until 2014 or 2015. …

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