Editorial: Strategies for Countering Budget Cuts

Thirty-seven states plus the District of Columbia are facing combined budget deficits of approximately $66 billion in the 2009 fiscal year. In an effort to balance their budgets, many states have called emergency legislative sessions and are proposing significant budget cuts to many governmental agencies, including education. As of December 10, sixteen states have made cuts to K-12 education funding, and many other states are threatening to follow suit.

Providing context to the severity of the economic situation and its impact on K-12 education, Ron Snell of the National Conference of State Legislatures stated in a recent briefing of lawmakers in Maine that, “K-12 education is nearly sacrosanct in state finance. It is the biggest item of expenditure in every state. Even so…states are cutting K-12 education.” Snell indicated that making cuts to K-12 funding is generally considered a last resort for states, yet the current economic crisis is taking such a toll on state budgets that significant cuts are being suggested and implemented. Many states are seeing proposed education cuts of up to 4% this year—in many cases reducing funds that had already been appropriated and included in school districts’ budgets—with even larger cuts threatened for next year.

Cutting education spending in an effort to help balance states’ budgets is a shortsighted fix. As Randi Weingarten, President of the American Federation of Teachers, explained in a November 17, 2008 speech to the National Press Club, “This disinvestment in education may help state and local governments’ bottom lines this year. But it places our economy in a race to the bottom for years to come.”

Fluctuations in the economy should not adversely alter states’ spending on education. If education is guaranteed by a state constitution as a fundamental right, as it is in most states, a state should be required to provide and sustain a reliable funding stream. After a cost study has been performed, the amount determined by the study to be necessary to provide students a constitutionally adequate education should not be subject to the vagaries of economic cycles.

Tennessee and Vermont are prime examples of states that have taken strong measures to protect education funding. Despite economic instability, education funding has been unaffected in these states. Amidst talks of cutting up to 20% of funding from governmental agencies, Tennessee Governor Phil Bredesen has declared that education will remain untouched. In Vermont, state law has established a state education fund which has a dedicated funding stream from a statewide property tax and other designated sources. In addition, an annual general fund appropriation, with an inflationary adjustment, is also added to the education fund. The money for this education fund can not be used for any purpose other than education, and a strong stabilization reserve fund has been established to ensure that surpluses are carried forward and the education fund has sufficient assets even in times of economic decline. Vermont Tax Commissioner Tom Pelham stated that while cuts are being made to other departments, “there is no reason why it (the education fund) should be affected.”

According to a study by Education Trust, the United States is the only industrialized nation in the world in which children are less likely to graduate from high school than their parents. A period of economic crisis is a time to reevaluate our priorities and place an emphasis on both our short-term and long-term goals as a country. Harvard economists Claudia Goldmin and Lawrence Katz contend that historically, investing in education has had significant payoffs. In the 20th century, investing in human capital enabled the United States to have a competitive advantage over other nations, and, on the domestic level, it had the result of reducing the gap between rich and poor. In terms of today’s economic situation, Goldmin states that, “Investing in human capital is still a very good deal. Returns are very high.”

In planning for the new stimulus package that the Obama administration is crafting, there have been indications that there is a commitment to allocating money for capital construction for schools. The Economic Policy Institute estimates that an investment of $20 billion into the infrastructure of public education—school construction and deferred maintenance—would support as many as 250,000 new jobs and create the demand for approximately $6 billion in products. In addition to including school facility funds in the stimulus package, the new administration should strongly consider providing educational maintenance grants or loans that would provide funding support for states to maintain basic educational services at the levels which court orders or cost studies have determined to be necessary to provide all students a basic quality education.

The benefits of investing in education are immense. As Randi Weingarten stated, it is time for the United States to “reinvest—not disinvest—in education.”

-Michael A. Rebell
and Anna C. Douthat