The Coming Recession Threatens Severe Cuts to Public Schools
An economic recession is inevitable and public schools are likely to suffer. Across many states, the public schools have finally recovered from deep cuts to state funding during the 2008 recession; other states have not yet caught up. Now we are headed into another recession.
The Learning Policy Institute’s Michael Griffith describes the recession we can expect in the coming year and explains why school funding is so vulnerable: “In the past 5 weeks alone, since sates began to issue shelter-in-place orders, virtually all 50 states have significantly reduced economic activity… and almost 22 million Americans—more than one in ten working adults—have applied for unemployment insurance. The International Monetary Fund has predicted that this will be the worst economic downturn since the Great Depression. This downturn will impact state tax revenue and thus result in reduced state PreK-12 education spending.”
How much do public schools depend on state revenue? Griffith reports: “According to the U.S. Census, 47.1% of public PreK-12 education finding comes from state sources. Another 44.9% comes from localities, and typically just 8% comes from the federal government. While localities rely on more stable property taxes, the vast majority of state revenue (just under 90%) comes from two sources—sales and income taxes. Retail sales started to take a hit in February, while state unemployment numbers—which will ultimately affect overall wages and taxes—did not begin to climb until the end of March…. I have spoken to revenue and budget experts from around the country, and none of them currently feels confident in projecting how far state revenues will fall this year and next. Some preliminary estimates from states are showing state revenue drops of between 10% and 20%. These drops are likely to be even larger in 2021-22, when the income tax effects will be felt more fully.”
While the CARES Act provided some relief to states, assistance for state and local governments falls far short. It appears that President Donald Trump and Senate Majority Leader, Mitch McConnell may be playing politics when it comes to future relief bills by holding back state assistance to put pressure on Democratic governors. How dangerous are these political games CONTINUE READING: The Coming Recession Threatens Severe Cuts to Public Schools | janresseger
