Report: School districts at funding cliff

This was written by Jack Jennings, president and chief executive officer of the Center on Education Policy, a nonpartisan, nonprofit education research group in Washington, D.C. From 1967 to 1994, he served as subcommittee staff director and then as general counsel for the U.S. House of Representatives’ Committee on Education and Labor.As tough as things were financially for school districts last year, prospects are even bleaker in the coming school year, according to data from a nationally representative sample of school districts released today by the nonpartisan Center on Education Policy.

In addition to being squeezed by state and district belt-tightening, most districts will no longer have the cushion they had last year from federal stimulus funds that pumped millions of dollars into state and local education budgets.

Insiders have referred to this as the “funding cliff” that has been looming since the federal funds were released as part of the American Recovery and Reinvestment Act of 2009 (ARRA). If there is one takeaway from the survey results, it is this: School districts are at the precipice of the funding cliff.

Here’s a quick look at the numbers from the 457 districts of all sizes that responded to our survey:

While 70 percent of school districts nationwide experienced funding cuts in the 2010-11 school year, that percentage is expected to rise to 84 percent in the coming 2011-12 school year — and 63 percent of these districts expect cuts to exceed 5 percent of their existing budgets.

About 85 percent of the districts that experienced funding decreases in the 2010-11 school year said they cut jobs for teachers and other staff to help absorb lost revenues.

Looking to next school year, approximately 61 percent of the districts that anticipate funding shortfalls plan to cut staff. That may sound like an improvement, but the percentage is likely to rise because at the time of the survey, many districts had not yet decided where to cut.

And while federal ARRA and Education Jobs funds helped cushion some of the budget shortfalls, most districts have exhausted these funds. Last year 94 percent of school districts had those funds available. In the coming school year, only about 30 percent of school districts expect to have any ARRA funds available.

According to data from the U.S. Department of Education, only about $16.9 billion of the total ARRA education appropriations, or roughly 17 percent of the total obligated funds, remain available for expenditure.

School systems are experiencing a triple whammy. Federal resources are drying up at the same time that state budgets are being cut and revenues from local property taxes are shrinking due to falling housing prices and foreclosures.

And while it’s impossible to say exactly how these challenges will play out this coming fall, it’s safe to say that many schools are going to look and feel different when the doors begin opening in August and September. It may mean that classes are more crowded, that popular after-school teachers and programs are gone, or that students are asked to pay for services that once were free.

Equally troubling is that budget cuts are forcing districts to slow reforms. According to our survey, 66 percent of the districts with budget shortfalls in 2010-11 either slowed progress on planned reforms or postponed or stopped reform initiatives. In the coming school year, 54 percent of districts anticipate shortfalls to slow progress on reforms or postpone or stop reform initiatives.

Money alone will not fix the ills or address the challenges that our schools and communities face. But the survey results make it clear that the cuts districts are experiencing could be deep enough and last long enough to stall or upend the reforms that are most likely to contribute to improving our schools as well as the nation’s economic situation in the future.

As business leaders have long emphasized, education reform is essential for the United States to remain competitive in a global economy. As a nation, we must weigh the impact that ongoing budget cuts will have on those reforms tomorrow and in the long run.

Jack Jennings