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A Perfect Storm: Annual School Spending Report
With a faltering economy, K12 districts find creative ways to cut and stretch their budget dollars.
September 2008

If it wasn't the worst budget cycle in decades, it was one of the worst for school district administrators trying to juggle union-negotiated salary increases, higher fuel and food prices, and federal mandates with less money, district leaders and education experts say.

While most districts have increased budgets for the 2008- 2009 school year over last year, the increases do not meet the higher costs of fuel, insurance and food, according to the American Association of School Administrators’ public policy department members. Few districts will see decreased budgets this year, below the 2007-2008 school year, but if the budget includes fewer funds from the state or local sources, districts still have to make cuts. And if fuel and food costs are higher than budgeted, they have to make more cuts. Some districts such as Miami-Dade County Public Schools and Detroit Public Schools are dealing with outright decreases in their school budgets over last year.

It’s a perfect storm of conditions for districts in part because of the collapse of homeowners’ loans and the nation’s mortgage fiasco, which lower local property revenues that help fund school district budgets; state money reductions in part due to lower sales tax revenue because consumer spending is low; and districts’ own rising costs for fuel and food, according to Daniel Domenech, AASA executive director. On top of that, student enrollment nationwide should hit its highest peak this year, with about 50 million public school students. Some large, urban districts are seeing reduced enrollments, but those districts must compensate for receiving a reduction in state funds because of the lower enrollment.

A recent survey by the National School Boards Association (NSBA) found that 35 percent of school districts across the county this past spring and summer were making “substantial” cuts in their budgets: Onequarter of those districts reduced spending on instruction, while another 30 percent were planning “minor” cuts.

Reginald Weaver, former president of the National Education Association, says 10 states have announced cuts in K12 funding, while another 16 are cutting funds for higher education. As of July 1, Weaver says, 29 states were facing budget shortfalls. “Put that all together,” he says, “and that’s about $48 billion” in the red, he says.

In times like these, says NSBA Executive Director Anne Bryant, it’s essential for school districts to have a clear-eyed vision for the future. “Without a strategic plan, it’s very hard to make the right cuts,” Bryant says. “Often the easiest thing to cut is professional development. In the short term it sounds easy. In the long term it could be devastating.”

Districts face various options: cutting teachers and staff , which provides the biggest bulk of a budget, at a time when the country needs more teachers for rising student enrollment, says Domenech, a former 30-year superintendent. Increasing class size might be one way to accommodate higher student enrollment. Domenech foresees more noncore classes being chopped, such as elective high school courses or foreign languages, like Arabic, which only attracts a handful of students, or even less popular Advanced Placement courses. He also foresees cuts in additional services that schools might offer students in need of extra help. Some district leaders say they have or are raising the price of school meals, by about 25 to 50 cents, to help make up for losses.

At the same time, Domenech says academics and classroom instruction is a sacred cow that should not be touched. “You will do everything you can to protect students in the classroom and classroom instruction,” Domenech says. “Postpone construction work or renovation work that is not a safety issue. Postpone purchase of computers.”

Domenech recalls the energy crisis of the 1970s—which inspired some costsaving initiatives, such as the midwinter recess, that many districts maintain today. Many rural districts, for example, depend more on state money if they have a small local tax base, according to Rachel Tompkins, president of the Rural School and Community Trust. “So as state budgets get tighter, that begins to squeeze out what local districts get,” she said in July. “And one of the things we’re hearing, particularly in the Midwest,” where students have long bus rides to and from school, is that “more of them are thinking about four-day weeks for school.”

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