Senior Vice President for State Fiscal Policy
As Congress considers whether to extend the state fiscal assistance in last year’s Recovery Act, it should keep in mind that without those funds, states will have a very hard time continuing their initiatives to improve their schools.
Education is the single biggest item in state budgets. So when the recession triggered an unprecedented decline in state revenues, it’s not surprising that most states cut education spending to help close their shortfalls.
Over the past two years, at least 29 states and the District of Columbia have cut K-12 spending and at least 39 states have cut funding, raised tuition, or both, for public colleges and universities. (Here are the specifics.)
More cuts are on the way for the fiscal year that starts July 1. Proposed cuts include layoffs for nearly 22,000 teachers in California and 17,000 teachers in Illinois, while New Jersey is considering roughly $1 billion in cuts to K-12 and higher education.
Continued cuts not only weaken the economic recovery — laid-off teachers don’t spend much in local stores, for example — and basic education programs, but also undermine the kinds of reforms that research suggests can make schools work better. Reforms like:
The Recovery Act gave states $140 billion in fiscal relief to help maintain public services, mostly in the form of increased Medicaid funding and a State Fiscal Stabilization Fund targeted primarily at education. The stabilization fund alone has saved 284,000 jobs, according to the Education Department. The Medicaid funds have also helped protect education by freeing up state dollars that would otherwise have gone to Medicaid.
But both forms of fiscal relief are running out, and states face at least another two years of big budget shortfalls. By renewing both the Medicaid and the education funding, Congress can help the economy in the short run while also helping produce the kind of educated work force we’ll need to prosper over the long run.