It Begins – Education Stimulus Round II

Federal ARRA stimulus funding has been keeping schools around the country on life support for the past year. Despite significant layoffs around the country it headed off catastrophe in many states. That era is coming to an end later this year or early next year.

It was heartening to see Secretary Duncan take up the cause in a statement issued today. Unless Congress acts and provides a second round the deteriorating tax climate at the state and local level is going to cause massive disruption to the education system in 2011 and beyond.

“We are gravely concerned that the kind of state and local budget threats our schools face today will put our hard-earned reforms at risk,” he stated. “Every day brings reports of layoffs, program cuts, class time reductions, and class size increases.”
Potentially hundreds of thousands of educators and other personnel could be laid off if action is not taken quickly to help states and districts cover shortfalls...Literally, tens of millions of students will experience budget cuts in one way or another.” Moreover, schools, districts and states that are working so hard to improve—will see their reforms undermined by these budget problems.

The Secretary urged members to consider another round of emergency support for America’s schools, similar to the aid provided to states through the American Recovery and Reinvestment Act (ARRA). “If we do not help avert this state and local budget crisis,” he warned, “we could impede reform and fail another generation of children.” (emphasis added)

Richard Sims, Chief Economist at the NEA, has spoken clearly on the connection between property values and state and local tax receipts. It takes three years for the funding impact from a change in home values to affect school budgets. In other words – we are just starting to see the most serious impact from the decline that started in 2007. If prices bottom out this summer – which is iffy given a potential wave of foreclosures ahead due to ARMs resetting – it will be 2014 before budgets START to recover.

States can not engage in deficit spending and will balance their budgets on the back of massive teacher layoffs, school closures, etc. In most states education is the single biggest line item and accounts for 50% of the budget. While it is always the last thing Governors want to cut they simply won’t have an option in the years to come.

The only cavalry that can save the day here is the Federal Government stepping in with additional deficit spending to prop up education budgets.

• Is the political will there to step and engage in additional deficit spending?
• Will advocates for privatization use this as a political opportunity to destroy public education? Many of these folks are also strongly anti-deficit.
• Will reform efforts be set back decades by draconian cuts?

These are not idle questions as we head into 2011-2014.

This battle will largely be fought in the next 12 months and those of us who serve schools should get shoulder to shoulder with any educational association we have a stake in supporting. Join in this fight!