Education Budget

As the economy continues to weaken, many states across the country are starting to face a budget crunch that may affect funding for education. A variety of factors--including the housing market, fuel prices, and a slowdown in tax collections--mean that states are going to see fewer revenue increases than in previous years.

When states face economic downturns, there are real implications for students, teachers, and schools. States often try to protect K-12 spending during tight budget times. But states spend such a large portion of their discretionary spending on education (about 34 percent for K-12 and 11 percent for higher education) that it is difficult to make cuts entirely in other areas. Other large discretionary expenditures include Medicaid (17 percent) and corrections (11percent).

The Center on Budget and Policy Priorities found that during the end of the last recession (2002-2004), 34 states cut real per-pupil aid to school districts. Already this year 10 states have proposed or implemented funding cuts to K-12 education.

In late June both the House and Senate Appropriations Committees approved separate versions of the Labor-HHS-Education appropriations bill, which funds federal education programs. Both the House and Senate committee bills would zero out funding for the Reading First program, which funds scientifically-based reading programs in grades K-3. If the bill passes in its current form, Congress will have cut funding for PK-3 literacy by $1 billion over two years. And that’s something early education advocates, regardless of their views on Reading First per se, should be up in arms about.

The appropriators cite unimpressive results from a recent evaluation of Reading First as a rationale for eliminating the program. They also cite management scandals that plagued the program last year but which the Department has addressed. Early Ed Watch has previously discussed why these are not necessarily good reasons to defund Reading First.

Last Friday we reported on the status of the House and Senate Labor-HHS-Education Appropriations bills for fiscal year 2009. Committees in both Chambers had agreed to a 302(b) suballocation of $153.1 billion, and sub-committees in both houses adopted approved bills and sent them on to the full Appropriations Committees.

The Senate Committee successfully passed their Labor-HHS-Education appropriations bill on July 26th. But the House Committee hit a minor (read: politically challenging) road block. Representative Jerry Lewis (R-Calif.), the ranking member of the House Appropriations Committee, offered an amendment to strip the text from the Labor-HHS-Education appropriations bill and replace it with the text from the appropriations bill for the U.S. Department of the Interior. Lewis and his Republican colleagues argued that passing the Interior bill would lessen the burden of rising gas prices before the July 4^th holiday weekend, but House Appropriations Committee Chairman David Obey (D-Wisc.) derided the move as a "political stunt." Stunt or not, Lewis' amendment effectively stalled the Labor-HHS-Education Appropriations bill in its tracks, postponing action on the legislation until after the July 4^th Congressional recess-and potentially scuttling the Labor-HHS-Education bill's passage for much longer.

It's appropriations time on Capitol Hill. This week, the House and Senate Appropriations Committees moved to adopt their respective versions of the fiscal year 2009 Labor-HHS-Education appropriations bill. This week's committee action begins the annual federal education funding process, but the spending bill still faces a number of procedural steps and political hurdles before it becomes law.

In February, the President released his budget proposal for the upcoming fiscal year, which outlined funding levels for all education programs, and established a recommended total appropriations spending level of $990.7 billion. Congress adopted its own total funding level of $1.012 trillion in May when it passed the fiscal year 2009 congressional budget resolution. (Last year Congress set the spending level at $953.1 billion).

As we explained in our federal budget primer earlier this year, the budget resolution funding ceiling (called a 302(a) allocation) does not specify funding levels for individual programs, only an aggregate total. So, anyone interested in federal education funding has had to wait until now to get a glimpse of the funding levels Congress is likely to adopt. The House and Senate Appropriations Committees took two key actions over the past weeks that gave some shape to education funding for the upcoming fiscal year.

Reports that some affluent Massachusetts school districts spend exorbitant amounts of money to build top-of-the-line school facilities have drawn media criticism and seized the attention of state officials. The prime example is a proposed $197 million high school in Newton—the most expensive high school in Massachusetts history—that has already gone over its original $141 million budget. Other projects, such as a $159 million high school in Wellesley, are also forecasting high and escalating costs. Last week state Treasurer Timothy P. Cahill warned that the state will not subsidize excessive school construction spending by districts that do not keep construction costs under control, or for building features, such as planetariums or swimming pools, that are not essential to schools' academic purpose.

We hear a lot of rhetoric from politicians about how America's future depends on investing in our children. But this rhetoric is not translating into spending realities. A new report from First Focus, "Children's Budget 2008," provides information on federal spending for children's programs. The report slices the data in a number of different ways, but the overall theme is that the federal government is not prioritizing children when it comes to allocating resources.

The report indicates that federal domestic discretionary spending on children in 2008 was only about 10% of all non-defense spending (a 23% decline since 1960). That's a pretty surprising number when you think about it—it means that as a nation we spend only 10 cents of every discretionary dollar on children.

Recent budget decisions have only exacerbated the downward trend. In the last five years, domestic spending on children's programs has decreased by 6.7%. While mandatory spending on children increased by 5.7% in that time period, overall federal spending was increasing at a much faster rate (almost 10%), meaning that other types of spending are outpacing spending on children. Of all the new real non-defense spending in the past five years, only one penny of every dollar has gone toward children's programs.

Lower Priority for Education Funding

Most Americans do not know how much their local school districts are spending on education, according to a new national survey. This isn't a surprise to Ed Money Watch. Poor understanding of education expenditures spurred the creation of our Federal Education Budget Project. But what does surprise us is the size of the misinformation gap: Americans vastly underestimate per-pupil expenditures, by $6,122 on average.

Education Next and the Program on Education Policy and Governance at Harvard conducted a survey in 2007 of a nationally representative sample of 2,000 American adults. They asked the question: "Based on your best guess, what is the average amount of money spent each year for a child in the public schools in your school district?" Then they matched those answers to the actual per-pupil expenditures of the respondents' districts.

Pope Benedict XVI's first visit to the United States is spurring supporters of Catholic schools and the media to highlight the decline of and obstacles facing Catholic schools. Demographic changes, a reduced supply of priests and nuns to serve as teachers, and the aftermath of sex abuse scandals have acted to undermine Catholic schooling in many places. This attention to the crisis in Catholic education has also highlighted a little known fact: federal education programs provide support to educate low-income students not just in public schools, but also in private schools.

When spending federal money, school districts are required to provide equitable services to private school students and teachers. The Elementary and Secondary Education Act—Title IX, Part E, Subpart 1—enshrines this right to equitable services. Ed Money Watch will use the Pope's visit as an opportunity to clarify how federal funds are distributed to and spent on private school students and teachers (not private schools).

Title I Funds for Supplemental Instruction

As the number of schools identified for school improvement, corrective action, and restructuring under the No Child Left Behind Act continues to increase, states are under increasing pressure to improve student performance in these schools. Yet a new report from the Government Accountability Office finds that a little-known funding provision in NCLB is undermining state efforts to turn around low-performing schools.

The 4% Set-Aside vs. the Hold Harmless Provision

Under NCLB, schools that fail to meet state achievement benchmarks—otherwise known as Adequate Yearly Progress or AYP—for two consecutive years enter "school improvement" status. NCLB requires states to set aside four percent of their Title I funds to support school improvement activities—such as professional development, new curriculum, extended learning time, or full-scale restructuring—in these schools.

Last week Secretary of Education Margaret Spellings announced that the Department of Education will begin requiring all states to use the same method to calculate high school graduation rates. NCLB already requires states and high schools to report graduation rates, but it allows states to craft their own formulas to do so. The result: states inevitably found ways to inflate graduation statistics. And the state-by-state patchwork of methods used makes it impossible to compare graduation rates across states.

Spellings' announcement is an important, smart move following years of pressure from education and civil rights organizations to improve graduation rate data. Without comparable, meaningful data to expose low graduation rates, states can continue to ignore the drop-out crisis that is plaguing low-income communities—especially in urban areas—around the country.

But Spellings' announcement also raises some important questions: Do states have in place the data systems they need to calculate new, standardized graduation rates? And, if not, how will they pay for new state data systems? So far, neither Spellings nor news articles covering the new regulations have addressed these issues in any detail.