Shanker Blog: State Budget Cuts and School Districts with Pre-Existing Conditions
The Center on Budget and Policy Priorities has published projections of state budget shortfalls due to the pandemic. The total estimated shortfall for fiscal years 2020-2022 is $555 billion. This includes $290 billion in FY2021 alone, a deficit over 25 percent larger than that in the worst year of the Great Recession (2009).
Compared with the sickness and death caused by Covid-19, state budget shortfalls are just collateral damage (though remember that states spend a lot on healthcare). But it could be a lot of damage. Unlike the federal government, virtually all states are required to balance their budgets every year. They cannot spend more than they raise in revenue, which means any deficits must be balanced out by cuts. Suppose we take these CBPP projections at face value, and subtract from them existing federal aid forthcoming and total state budget reserves. That, according to CBPP, still leaves states about $400 billion short for this past fiscal year and the next two (and there could easily be shortfalls in subsequent years).
Virtually all public school districts will feel this pain, but it will not be felt equally. Higher poverty districts are more dependent on state revenue, since more affluent districts generate more revenue from local sources (mostly property taxes). But the situation is even worse: higher poverty districts are already spending far less than they need to be. In a sense, the pandemic is going to be particularly harsh on districts with pre-existing conditions.
The graph below presents estimates of spending adequacy for the U.S. as a whole, by poverty quintile, with adequacy defined as the amount that would be required to achieve national average test scores. This measure is part of the School Finance Indicators Database, and you can CONTINUE READING: Shanker Blog: State Budget Cuts and School Districts with Pre-Existing Conditions | National Education Policy Center