Bleak outlook for education spending under sequestration


Sequestration will trigger huge education spending cuts: across-the-board cuts of more than 8 percent to federal programs.

As schools face ever-increasing budget dilemmas, education stakeholders are desperately hoping to avoid sequestration, or across-the-board cuts, to domestic spending next year—cuts that could devastate education programs and affect many of the country’s neediest students, experts say.

To avoid a government shutdown in 2011, Congress passed the Budget Control Act, which increased the national debt ceiling in exchange for a major reduction to federal deficits. Congress set limits to federal spending for 10 years and created a “supercommittee” tasked with creating legislation to reduce the deficit.

The Budget Control Act stipulates that if $1.2 trillion in savings is not approved, across-the-board cuts will go into effect in January 2013.

The so-called “Bush-era tax cuts” expire at the same time, and the timing is no coincidence—scheduling across-the-board cuts, which include defense cuts, at the same time as the Bush-era tax cuts expire was supposed to ensure that lawmakers had an incentive to come together and work toward a budget solution.

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So far, Democrats and Republicans have been unable to reach an agreement. Democrats have insisted on a balanced approach to deficit reduction that combines budget cuts with revenue increases by allowing the Bush-era tax cuts to expire for the wealthiest Americans (those making more than $250,000 per year would see their tax rate rise from 35 percent to about 39 percent, the same as under President Clinton). Republicans have refused to consider any scenario in which taxes increase.

Lawmakers’ failure to reach an agreement will trigger sequestration cuts; 50 percent of those cuts will come from defense spending, and 50 percent from non-defense spending. Those cuts will begin on Jan. 2, 2013. Aside from Impact Aid, education is forward-funded, so cuts to education funding would not actually begin until July 2013.

But once those cuts start, education will see its largest cut ever, at about 8.2 percent. Title I would lose an estimated $1.2 billion, IDEA would see a $973 million cut, and Head Start funding would lose $669 million under this scenario.

“We can’t solve federal spending problems on the backs of our kids,” said Phillip Lovell, vice president of federal advocacy for the Alliance for Excellent Education, during a webinar that examined the impending sequestration crisis.

“We’re facing very significant financial squeezes and limits, and even in the best-case scenario, it’s very unlikely to see any significant increases in federal funding for education in the next several years,” said Joel Packer, executive director of the Committee for Education Funding.

Over the past two years, education has seen roughly $1.5 billion in federal cuts that have reduced funding in nearly every area except Pell Grants, which retained their maximum $5,550 award in FY 2011 and FY 2012.

Packer said that Pell Grants are by far the biggest Education Department (ED) program, and that in the last few years, owing in part to the recession, many more people have applied for and received Pell Grants. The program now is facing very significant funding shortfalls, although it would be exempt from sequestration cuts.

Lawmakers have maintained Pell Grant funding largely by cutting or eliminating other parts of student aid, such as eliminating the interest subsidy for graduate student loans and eliminating the six-month grace period for undergraduates, eliminating the “summer” Pell Grant, and reducing the number of semesters a student can receive a Pell Grant to 12. But in FY 2014, the Pell Grant program faces a $7.8 billion shortfall, and 145,000 students have lost their Pell Grants this school year.

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Tom Shelton, superintendent of the Fayette County Schools in Kentucky, said sequestration will mean a 7.8-percent cut to his district’s programs, increased class sizes, and less access to after-school programs, early childhood education, and programs for children with specials needs.

Fayette County receives about $22 million in federal funding—roughly 5.3 percent of the district’s total budget.

If sequestration cuts occur, Shelton’s district could see $1.6 million slashed from its budget.

“It really puts us in a precarious situation,” he said. “These cuts are coming in the middle of the year. We’re looking at a real impact in the classroom.”

The district’s fastest growing population is English language learners, many of whom rely on federally-funded resources.

“We are simply not going to be able to meet the needs of those students, and it’s always difficult when you look at the students who have the greatest need and they’re the ones suffering from this,” Shelton said.

Shelton said district officials are trying to find more flexibility in funding, specifically in how the district uses its state and local dollars, so that it has some means of offsetting federal spending cuts.

A July 2012 Senate report from Sen. Tom Harkin, D-Iowa, examines the potential effect sequestration would have on education spending. It notes that cuts to Title I, IDEA, and Head Start would force some 46,000 employees to either lose their jobs or rely on cash-strapped states and municipalities to pick up their salaries instead.

“In a word, a large sequester could be devastating,” said Education Secretary Arne Duncan in April 2012 testimony before Congress.

See also:

What ‘sequestration’ could mean for school grant seeking in 2013

How to Make Smart Ed-Tech Investments

Laura Ascione

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