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Record Budget Shortfalls Lead States to Make Major Cuts

Before the current fiscal year is over, at the end of June in most places, states have to cut $21.5 billion in order to balance their budgets, as most are required to do by law, according to a report, State Budget Update: April 2003, released by the National Conference of State Legislatures (NCSL) on April 24. The report further concludes that next fiscal year, 41 states will have to eliminate an additional $78.4 billion, for a total of nearly $100 billion. Nineteen of those 41 states will have shortfalls of more than 10% of their total budgets. These record gaps, the worst since World War II, have led nearly all states to cut their education and health care budgets. Although education is often a virtual untouchable, even when times are tough, three years of slow economic times have emptied "rainy day" funds and led to increasingly desperate measures. Education, which frequently comprises the largest percentage of state budgets, is now on the chopping block, along with social services, Medicaid, and law enforcement.

States have tried different strategies to save money on education. Twenty-one states, according to the NCSL report, are considering K-12 cuts. Some proposals call for across-the-board reductions, while others target transportation funds, teacher salaries, class sizes, and/or per-pupil aid. Oklahoma is implementing a nine percent across-the-board cut. In California, the state with the largest shortfall in dollars-over $30 billion-25,000 teachers have already received notices that they might be laid off. Half of the school districts in Kansas have cut staff. Teachers in Portland, Oregon have agreed to work for two weeks without pay in order to prevent the school year from being shortened, while districts in parts of Colorado are going to four-day school weeks. California and Florida have seen proposals to postpone or reverse class-size reduction.

Attempts to raise money are also varied. More and more states are adopting lotteries or other gaming programs, but big paydays for education have not materialized. On the local level, some districts are charging per-pupil fees, while even more are requiring student athletes and band members to "pay to play." Fifteen states have resorted to raising taxes-something governors almost always promise not to do-but the increased revenues are not enough to close the gaps.

Education cuts are all the more alarming to state and local education officials who are trying to comply with the numerous unfunded mandates of the No Child Left Behind Act (NCLB; for summary and analysis of NCLB, see the ACCESS NCLB sites). Two recent cost studies in Kentucky and Washington State have estimated that schoolchildren will need $740 million annually and $1.7 billion, respectively, to meet NCLB standards.

In response to these pressures, teachers and parents have chipped in, volunteering for janitorial duties and pooling money to retain nurses or music teachers. Several large-scale rallies of 10,000 people or more, and many more, smaller ones, have been held recently in state capitols. Even the most optimistic protesters, however, concede that simply keeping funding at the present level would be a significant victory in these difficult times.

Prepared April 29, 2003