Wednesday, August 26, 2020

Education Law Center: States Are Using Fed Grants To Cut Education Spending

According to the folks at the Education Law Center, states are repeating the sins of a decade ago. Let me explain.

Pity Tom Corbett. He became one of the few Pennsylvania one term governors, and he lost in no small part because he was accused of cutting education spending by a billion dollars. And he sort of did, but he was also sort of set up by the previous governor, Ed Rendell, who collected some Great Recession relief and used it to replace state tax money rather than adding to it. When that short term federal grant ended, there was suddenly a big hole in PA education spending (which Corbett tried to hide by deciding to start counting pension costs as "educational spending"). Here's the graph:

You may recall that as the Great Recession ended, many states found themselves spending less for education than they had pre-2008. There were many reason for that, but using federal funds to replace state funds and then doing nothing as the federal money ended was in many cases a contributing factor.

And now ELC says some states are doing it again.

ELC cites New York, Texas and Michigan as three states that are following "a playbook from the 2009 Great Recession by cutting over $1 billion in states aid."New York calls this a "pandemic adjustment."

That 209 playbook looks like this:

In the Great Recession, states responded to revenue declines by making significant, recurring cuts in state school aid. Then they offset those cuts with non-recurring federal stimulus relief. This caused deep structural deficits in state support for K-12 education that continued long after the Recession ended.

So, for instance, Michigan cut aid by $175 per pupil, or $256 million total. The state then plugged that hole with an additional $350 per pupil from the Coronavirus Relief Fund along with another $351 million from the CARES act, all of which is going to look like a short term win. But the day that all the federal coronavirus money runs out, the state will suddenly suffer a huge spending "cut."

The effects are particularly brutal for districts in low-income communities, aka districts that have less ability to make up a state shortfall with local tax increases. This model creates a ticking time bomb for the poorest districts.

And it's not just bad news in the long term. This approach also means blunts the effect of federal relief. This is Extra Bad News during a pandemic because schools are suddenly facing new, large expenses (PPE, substitutes, distance learning supplies, etc etc etc). It's like this-- you tell your folks that you're going to have to pay extra for school lunch this month and your usual allowance won't cut it. "Will ten dollars a week extra be enough," they ask, and you answer that you can probably make that work. "Great," they reply. "Also, we're cutting your weekly allowance by seven dollars.:"

In other words, we're in danger of the same mess we had with education spending during and after the Great Recession, only worse. It's the kind of thing that requires keeping a careful watchdoggy number-crunchy policy-wonky eye on your legislature, but it has to be done because otherwise it's far too easy for state politicians to kick the can down the road and leave it for some other poor slob to clean up.

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