Education Week - June 10, 2020 - 9

7 Issues Facing
K-12 Budgets
As COVID-Shocked
Legislatures
Reconvene
alexsl/iStock/Getty

By Daarel Burnette II
Almost every state's legislature is expected to
reconvene in the coming weeks to cut billions
of dollars from their budgets. The coronavirusdriven shutdown of the economy caused a precipitous drop in income and sales tax revenue,
which states heavily rely on. 
Without another federal infusion of aid for
states on the horizon, the consequences for
public schools will be swift and severe. More
than half of the nation's school districts get the
majority of their revenue from state aid. These
districts, on average, serve a disproportionate
number of poor, black, and Latino students,
many of whom were lagging academically before the crisis abruptly closed schoolhouse doors
this spring.  It's well-documented that it will cost
billions of dollars more for schools to reopen this
fall and to get children back on track. 
How legislatures decide to fill a multi-billiondollar deficit will have long-lasting effects on
academics and politics. After school districts
laid off more than 300,000 people between
2008 and 2010 in the last recession, students'
performance on tests stagnated and disparities
between wealthy and poor students widened. 
Many districts have yet to recover.
State lawmakers have their work cut out for
them as they encounter difficult, if not impossible, financial choices.
Here are seven key issues on their summertime agendas that will affect school finance.
1. States will attempt to change who gets
taxed and how much, which could worsen
the fiscal crisis for schools.
Lawmakers are looking for ways to jump-start
their economies and ease the financial burden for
millions of unemployed constituents. 
The federal government, along with states like
California and Oregon, have extended the deadline for individuals and corporations to pay their
tax bills. That's pushed back the timeline for when
school districts expect to receive cash from local,
state, and federal agencies to pay their bills. 
Many legislators want to limit how much school
districts can tax their constituents and how often
and when they can go to taxpayers to ask for more
money.  Pennsylvania is now considering a bill
that would cap property tax revenue.  For most
districts, when state revenue dips, school boards
and voters attempt to raise the local property tax
rate to make up for the lost revenue. Capping
property tax rates is like "tying one hand behind
your back," Bruce Baker, a K-12 finance expert
at Rutgers University who has pushed for more
school funding, said in a webinar a few weeks ago. 
In Vermont, where property taxes are pooled
by the state and then redistributed to districts,
Gov. Phil Scott, a Republican, has proposed telling school districts to put their 2020-21 school
year budgets back up for a vote and ask local
residents if they want to see their property tax
rates jump 14 percent this fall.  Many legislators
balked at that idea.
Alternatively, states' legislatures could decide

that the budget cuts are too much to bear and raise
taxes to bring in more revenue, though higher
taxes during a recession is a tough political sale.
2. Lawmakers will grapple with how states
and districts spend their limited federal
aid money. 
It's now very unlikely that Congress will provide states with anywhere from $100 billion to
$200 billion that K-12 finance experts agree is
the amount needed to avoid mass layoffs this
summer.
But there's heightened political scrutiny on
how states should spend the $13.5 billion they got
from the federal government through the Coronavirus Aid, Relief, and Economic Security Act. 
One issue is whether legislatures can or should
use the money to shrink their looming budget
deficits, as New York's legislature already did, or
treat it as extra money on top of the funds states
would have sent to districts otherwise. 
States are split on the issue of what the federal
law allows, though the language in the law is very
loose.
Meanwhile, U.S. Secretary of Education Betsy
DeVos wants the states to share the money with
private schools, a move that's infuriated public
school advocates. 
And remember: Once that $13.5 billion is split
among 50 states and then again among 13,000
districts, it will do little to spare deep budget cutting for schools. The vast majority of districts will
have to carve a range of 10 to 25 percent from
their budgets.
3. Every K-12 program that exists outside
states' funding formulas will have a target
on its back. 
Districts get most of their state aid through complicated funding formulas that consider factors
including district size, poverty rate, and location. 
But as these funding formulas have aged, and
it became increasingly difficult to funnel money
to districts that needed it most, legislatures have
created a variety of grants and categorical funding
streams outside their funding formulas. 
State lawmakers will first do everything they can
to avoid cutting back money that flows through
their funding formula. 
That means big initiatives launched after a
state created its funding formula are at risk. That
includes pre-K programs, after-school programs,
vocational programs, programs for English-language learners, and, in many states, school choice
programs such as vouchers and charter schools.
States' school construction projects will likely
be placed on hold. And states' education departments, which have specific duties under the federal Every Student Succeeds Act and play a pivotal
role in leading school systems through the pandemic crisis, will likely experience deep cuts. 
4. States will attempt to cut equitably, but
will struggle. 
Researchers have now concluded that the
budget cuts made during the last recession
directly led to widening achievement gaps be-

tween black, Latino, ELL, and poor students and
their white, wealthier peers. Overall, standardized test scores have stagnated and, in recent
years, have begun to backslide. 
Dan Thatcher, a K-12 fiscal analyst for the National Council of State Legislatures, said legislators this summer are attempting to spare academically struggling districts by working more
collaboratively with education department officials to make more surgical cuts.
But those sorts of budget-cutting strategies are
complicated to execute and politically difficult
to get through legislatures.
No matter which way you slice it, low-income
and school districts with lower-performing
students are most heavily reliant on state aid
and stand to lose the most when sales and income tax revenue go into a tailspin. The nation's wealthiest, highest-spending districts rely
mostly on property taxes. Those rates historically have been set locally, not by the state.
Lawmakers in Ohio last month devised a
formula that cut more money from wealthier
school districts than low-income school districts, a move that's gotten some blowback but
has been praised in K-12 funding circles.
In recent weeks, K-12 finance think tanks have
come up with alternative, more progressive budget-cutting strategies for states to consider.
EdBuild, an organization that's pushed states
in the past to overhaul their funding formulas in
order to close spending gaps between wealthy
and poor school districts, released a paper this
week that urges states to pool more-stable property tax revenue at the county level rather than
at the school district level.
And WestEd, a think tank that works with
states to spend money more efficiently, released
a paper last month that encourages legislators to
spare programs and districts that serve an overwhelming number of poor students; avoid cuts
to districts hit heavily by the coronavirus; and
spread cuts out over several years.
5. Districts are asking legislatures for
waivers from states' K-12 finance rules.
Civil rights advocates will push back.
More flexibility in how districts collect and
spend their money would allow CFOs to be
more creative in their attempts to keep classrooms intact and open schools sooner this fall,
they have argued.
Also, because teachers have had a hard time
tracking students to make sure they log on for
distance learning, districts are pushing for states
to waive average daily attendance rules that determine how much money districts get annually.
Similarly, districts want states to waive classsize requirements since online classrooms can
handle dozens more students. Bigger class sizes
would allow districts to lay off more teachers,
whose salaries take up more than 80 percent of
their budgets.
Other requests include waivers from increased minimum wage requirements; federal
and state maintenance of effort rules that require districts to annually spend a base amount

on items such as special education costs; staffing rules that dictate things such as how many librarians and counselors students have access to;
and requirements that dictate how much money
districts need to save annually.
But civil rights advocates have urged legislatures to be cautious when deciding which rules
to waive.
"We should be granting districts waivers
where it's appropriate and necessary," said Ary
Amerikaner, the vice president for P-12 policy,
practice, and research for EdTrust, a group that
advocates for poor students and children of
color. "But we should be taking into account that
these compliances aren't just hoops we make
people jump through but they're civil rights
protections to make sure vulnerable kids get the
resources they need."
6. K-12 faces fierce competition for money
from other struggling government services.
While public schools typically take up the
largest chunk of states' budgets, they are not
the only part of the public sector that is struggling.
The higher education sector, rapidly losing
student enrollment, is facing mass layoffs and
some smaller private and public colleges have
threatened to shut down permanently.
Millions of unemployed people have joined
states' Medicaid and welfare rolls, requiring
states to spend more on housing vouchers, food
stamps, and unemployment checks.
Public hospitals have been slammed with
coronavirus patients, and states have spent
hundreds of millions of dollars purchasing face
masks and ventilators and to prop up chronically underfunded local health departments.
In addition, states must find a way to pay
down their public pension debt which has lost
more than $1 trillion in value in the last few
months.
While K-12 funding advocates have been able
to convince legislatures to prioritize the needs
of schools in years past, they will have a more
difficult time this time around.
7. With no clear end in sight for the downturn, expect rolling legislative sessions
throughout the 2020-21 school year.
That means midyear cuts are likely. States'
fiscal analysts are having a difficult time making projections given the uncertainty surrounding the pandemic and the turnaround in
revenues as state economies reopen. That has
raised anxiety among district administrators
who anticipate budget cuts to come close to or
even after the new school year starts.
In the meantime, legislatures in some states
like New York and Pennsylvania are passing
temporary budgets with promises to meet
again throughout the fiscal year. That pattern
will likely be replicated throughout the nation
in the coming months and complicate districts'
reopening plans and, possibly, interrupt classroom learning next school year as districts are
forced to make midyear layoffs.

EDUCATION WEEK | June 10, 2020 | www.edweek.org | 9


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Education Week - June 10, 2020

Table of Contents for the Digital Edition of Education Week - June 10, 2020

Education Week - June 10, 2020
Briefly Stated
A Tragic Killing in Minneapolis Prompts Districts to Take a Harder Look at School Police
Hurricanes, Earthquakes, and COVID-19 Make a Dire Trio for Puerto Rico’s Schools
Early Reading Instruction Takes a Hit During COVID-19
7 Issues Facing K-12 Budgets as COVID-Shocked Legislatures Reconvene
How Is COVID-19 Affecting Children’s Health?
How Can School Sports Get Back on the Playing Field?
Summer Programs Struggle to Keep Learning Fun From a Distance
Instruction During COVID-19: Less Learning Time Drives Fears of Academic Erosion
How to Root Out Anti-Black Racism From Your Schools
A Teacher’s Letter to His Younger Self
Letters to the Editor
EdWeek Top School Jobs
Don’t Make Black Families Choose Between Academics and Justice
Education Week - June 10, 2020 - CW1
Education Week - June 10, 2020 - CW2
Education Week - June 10, 2020 - Education Week - June 10, 2020
Education Week - June 10, 2020 - Briefly Stated
Education Week - June 10, 2020 - 3
Education Week - June 10, 2020 - A Tragic Killing in Minneapolis Prompts Districts to Take a Harder Look at School Police
Education Week - June 10, 2020 - 5
Education Week - June 10, 2020 - Hurricanes, Earthquakes, and COVID-19 Make a Dire Trio for Puerto Rico’s Schools
Education Week - June 10, 2020 - 7
Education Week - June 10, 2020 - Early Reading Instruction Takes a Hit During COVID-19
Education Week - June 10, 2020 - 7 Issues Facing K-12 Budgets as COVID-Shocked Legislatures Reconvene
Education Week - June 10, 2020 - How Is COVID-19 Affecting Children’s Health?
Education Week - June 10, 2020 - How Can School Sports Get Back on the Playing Field?
Education Week - June 10, 2020 - Summer Programs Struggle to Keep Learning Fun From a Distance
Education Week - June 10, 2020 - 13
Education Week - June 10, 2020 - Instruction During COVID-19: Less Learning Time Drives Fears of Academic Erosion
Education Week - June 10, 2020 - 15
Education Week - June 10, 2020 - How to Root Out Anti-Black Racism From Your Schools
Education Week - June 10, 2020 - A Teacher’s Letter to His Younger Self
Education Week - June 10, 2020 - Letters to the Editor
Education Week - June 10, 2020 - EdWeek Top School Jobs
Education Week - June 10, 2020 - Don’t Make Black Families Choose Between Academics and Justice
Education Week - June 10, 2020 - CW3
Education Week - June 10, 2020 - CW4
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