Budget Cuts Imperil Children

School board members in Richmond, Calif., took drastic action in late April to resolve their budget problem. They filed for bankruptcy, made their last payroll, and sent

a letter to the parents of the district’s 31,500 students that summed up the news in five languages.

“As you know,” the letter said, “the Richmond Unified School District has been struggling the past year with a severe budget crisis. The problem has grown to a point where the unthinkable must now happen: We are forced to announce to you that your child’s last day of school is Tuesday, April 30th.”

Within the week a county judge had ordered the state to pay to keep open the district’s schools. Classes continue but massive cuts are threatened. Layoff notices, for instance, have been sent to over 800 of the 1,750 teachers in the district, a working-class, largely minority area north of San Francisco.

The Richmond crisis starkly illustrates a problem facing thousands of elementary and secondary schools. There isn’t enough money. From California to New York state, from big cities such as Chicago to small towns such as Barneveld, Wisconsin, many schools are facing unprecedented budget worries.

“Potentially, this is the worst scenario facing education in decades,” said Mary Fulton, a research analyst with the Education Commission of the States.

The immediate problem can be summed up in one word. Recession. Throughout the nation, the economic downturn is creating havoc with state and local budgets. Because states pay for almost 50% of local education costs, on average, schools have been a prime target for budget cutters.

But many educators note that the recession is only part of the problem. In the long run, they say, education will never be on a sound financial footing unless three key issues are addressed:

• Changing local and state tax structures to guarantee that businesses and high income residents pay their fair share of taxes.
• Ensuring more equitable funding so that low-income districts don’t have to struggle for paper supplies while rich districts sprinkle their classrooms with computers.
• Restructuring federal priorities so that human services come ahead of military spending and financial breaks for businesses.

“The money is available in this nation to fund things that are important,” said Mark Simon, president of the Montgomery

County Education Association and a board member of the National Education Association. “But a political climate has been set for massive cutbacks in education.”

At the same time, education activists in several areas have noted that when teachers, parents, and community people have organized to defend education, politicians have been forced to modify their proposed cuts.

Norma Kacen, a lobbyist for the Indiana State Teachers Association, said that grassroots opposition forced Gov. Evan Bayh to retreat from his original budget proposal to cut $180 million in state education aids in the next two years, with the possibility now that state funding may increase slightly.

“There came to be, in communities all over the state, a coming together of advocates for schools,” Kacen said. “There was an outpouring of messages of concern that grew into a deluge that has not stopped.”

Galloping Deficits

Most state legislatures and school boards are scurrying to meet budget deadlines generally set for July 1, so many details are still unclear. Projected deficits and threatened cuts in education change almost daily — with the total budget deficit in California jumping from $7 billion earlier this year to $12.6 billion.

Not every school district in the country is facing money problems. In fact, a few states legislatures have approved school reform and financing packages that boost spending. In Arkansas, for example, the legislature approved $287.2 million for the next two years to create an Educational Excellence Trust Fund to pay for new programs and to raise teacher salaries that had ranked last in the country.

But such increases are the exception. The overall trend is for cutbacks. Just some of the budget problems reported in recent months include:

• Chicago: Closing up to 30 schools, eliminating art, music and sports, shortening the school year, increasing class sizes, cutting maintenance, reopening employee contracts and other measures to reduce a $315.8 million 1991 budget shortfall.
• New York City: Cutting non-mandated programs such as all-day kindergarten, laying off thousands of teachers, cutting interscholastic sports completely at junior high and reducing them at senior high, reducing summer school, increasing class size and eliminating supplemental teachers such as music and art teachers to close a $579 million shortfall due to reduced state and city aid.
• California: Cutting $2 billion in state aid to local schools to counter a projected $12.6 billion state deficit. In San Francisco, for example, this may mean that two schools will be closed, interscholastic sports will be canceled, and elective courses will be eliminated in junior high schools. Across the state, 10,000 teachers have been sent layoff notices, although the exact number of layoffs won’t be clear until the legislature and school boards pass their budgets.
• Virginia: Increasing class sizes in some districts, suspending teacher raises, and dropping plans for field trips and new textbooks. Gov. Douglas Wilder has proposed cutting state aid to schools by $101.4 million.
• Dade County, Fla.: Freezing teacher salaries, cutting programs at magnet schools, eliminating some discretionary programs, and laying off up to 1,500 people to meet a possible shortfall of up to $150 million in the district’s $1.8 billion budget. The county, which includes Miami, also threatened to cut its summer school program, which serves 200,000 children and is the largest in the country.

Throwing Money at Schools?

Politicians proposing cuts generally argue that because education is such a large portion of the state budget, schools should not be exempt from cuts. They also argue that education budgets, by and large, significantly increased during the 1980s and that it isn’t possible to “keep throwing money at the problem.”

Educators note that there are important reasons why education spending rose in the last decade. Salaries and benefits, for example, account for the bulk of local school budgets. To attract and keep quality teachers, many districts increased what had been abysmally low salaries to stay competitive with private businesses and more affluent districts.

Looking at the 20-year trend ending in 1989-90, teachers salaries rose only 8.3% adjusted for inflation, from an average of $8,626 in 1969-70, according to the National Education Association. In addition, U.S. teacher salaries in the 1980s still were in the bottom third of industrialized countries, according to a recent survey by the American Federation of Teachers.

Increased costs have also been driven by changes within schools designed to counter the effects of poverty. Children have replaced the elderly as the largest group of poor people in this country, and by the end of the 1980s some 20% of all children were growing up in poverty. For Black children, almost 44% were living in poverty and for Hispanic children the figure was about 38%.

Schools, often under state and federal mandate, provide more services to poor, disabled, and non-English speaking students than they did 20 years ago. Many schools have also instituted early childhood programs. Educators caution that such hard-won reforms should not be sacrificed on the altar of fiscal conservatism.

Few educators argue that money alone will resolve the education crisis in this country; even fewer dispute that schools need to be drastically reformed and bureaucracies reduced. But the “money makes no difference” argument is fundamentally flawed.

As William Taylor and Dianne Piche argued in an essay in the March 20 issue of Education Week, “There is broad and growing consensus among educators, based on the experience of the past three decades, that money invested in quality pre-school and early-childhood-education programs, small classes, reading programs in the early grades, experienced and well-educated teachers, parental-involvement initiatives, and counseling and social services produces positive results.”

While it is true that more money is spent on education than in decades past, the United States still falls far behind other industrialized countries in key statistics — even though the U.S. has the highest standard of living in the world.

The United States, for example, ranks 12th out of 15 industrialized countries in the percentage of its Gross Domestic Product devoted to public spending on education, according to a recent survey by the American Federation of Teachers. It spends only 4.7% of its GDP on education, compared to the average of 5.4%.

The United States also has the third largest pupil/ teacher ratio of the 15 countries surveyed and the second largest average school size, according to the survey.

Many budget cuts that are being proposed may seem to make fiscal sense but do not take into account the growing needs of districts.

In California, Gov. Pete Wilson’s proposed cuts come at a time of skyrocketing enrollment. Elementary and secondary schools had about 160,000 more students this year, with estimates of 200,000 more students next year. Many of the students come from poor families with limited English skills and need extra attention. In addition, California’s student-teacher ratio is already the worst in the country.

Paul Warren, an educational consultant for the California Assembly, said the issue ultimately is one of political priorities.

“There’s a base level of government services that needs to be provided, whether it be welfare, roads, or education,” he said. “The answer to the budget dilemma isn’t cutting everything by one quarter or one third. You have to recognize the essential nature of these services and do whatever you have to find the funds.”

Education advocates in many areas hope to defeat cuts that could devastate their schools. But most were caught off guard by the depth and breadth of the proposed cuts and fear that some retrenchment is unavoidable.

“We’re trying to minimize the cuts, but we’re going to get hit,” said Don Murphy, an editor of the grass-roots School Voices newspaper in New York City and a member of the Save Our Schools coalition. “Then, we have to figure out how to get out of this crisis.”

A broad labor/community coalition has developed in New York City to counter cuts that would affect not only schools but transportation, libraries, hospitals and basics such as garbage removal. At this point, the coalition has agreed that a key focus must be on a more just tax structure, he said.

“There is no way to protect education as a privileged enclave,” Murphy said. “That won’t work. The crisis has to be tied to other social issues.”

Taxes, Equity, and Federal Priorities

While debating tax structures can be a dizzying prospect for anyone without a doctorate in economics, advocates of a more just tax structure make a few key points.

First, tax breaks and loopholes that protect businesses and corporations must be closed. Second, taxes on individuals must be progressive — in other words the share of income paid out in taxes should rise as income rises.

Progressive income taxes, for example, make those in higher-income brackets pay a higher percentage in taxes. In addition, some states have instituted a corporate income tax, also a highly progressive tax.

Sales and excise taxes, on the other hand, are generally regressive: i.e., they claim a higher percentage of the income of poor and middle class people than of rich people.

Even though rich people may spend three times as much money on consumer goods, if they make ten times as much money as poor people, they are paying a lower percentage of their income in sales taxes.

Property taxes, which provide the bulk of local support for schools, have become more regressive in recent years, according to Citizens for Tax Justice, a research and lobbying group based in Washington, D.C. From 1985 to 1991, state and local property taxes rose as a percent of income for poor and middle-income families, but declined for the richest one percent. At the same time, the group notes that well-designed property tax law have the advantage of taxing business.

Until the 1980s, there was generally bipartisan support for tax progressivity, according to a recent national tax study by Citizens for Tax Justice. That changed with the Reagan era. In fact, tax structures are now generally regressive, forcing poorer and middle-income people to pay a higher share of their income on taxes than rich people do.

“When all of the major state and local taxes are are added together, virtually every state taxes its poor and middle-income families at rates significantly higher than those faced by the richest families,” according to the study.

Given the legacy of the Reagan administration and the anti-tax sentiment that dominates in Washington and many state capitals, progressives note that they have their work cut out for them.

“This is not going to be an easy project,” said Richard Kruse, director of government relations for the National Association of Secondary School Principals. “Someone is going to have to be very bold and very articulate….No one wants to touch taxes. It’s a way to retire early if you’re a politician.”

Dirt Floors Versus Computers

Many education activists are also looking at the issue of funding equity and the fact that affluent school districts are able to spend far more per student than poor districts.

In addition to state aid, local schools are financed by local taxes, primarily property taxes. (The federal government pays only a small percentage of local education costs.) But areas with less valuable property, be they homes or businesses, don’t have as much money for schools. Thus rich districts are often able to spend more per pupil even while having a smaller property tax levy.

Some 19 states currently have lawsuits in which the school finance system is being challenged, according to the Education Commission of the States (See Rethinking Schools Vol. 5, No. 2). The actions follow much-publicized cases in Texas and New Jersey, where the courts declared the financing systems illegal, mainly because of spending disparities between rich and poor districts.

C.J. Prentiss, a Democratic representative from Cleveland in the Ohio legislature, said a lawsuit challenging the state’s education financing structure is a necessity.

“That’s the only hope,” she said. “I don’t see a willingness on the legislature’s part to reprioritize the budget.”

“We have a school with dirt floors in the state of Ohio,” she added. “The kids have to go across the street to go to the bathroom.”

Educators caution, however, that the rhetoric of equal funding can be misused to justify equal dollar amounts of state aid to

all districts on a per pupil basis. Such an approach ignores that some districts, in particular large cities, have a disproportionate number of poor people with special needs and therefore deserve higher-than-average state support.

Finally, education advocates note that there must be a national effort to change federal priorities.

Federal spending on education has declined in the last decade — from 9.2% of school funding in 1980 to 6.3% in 1990, according to the National Education Association. But the issue is far more complex than direct federal funds.

When the Reagan administration cut social services spending and hiked peace-time military spending to unprecedented heights, it forced states and municipalities to pick up more of the tab for problems such as hunger, homelessness, and health care.

Cities were particularly hurt by the cuts in federal social spending. In New York City, for example, the annual cost of federal cuts is more than $3 billion, almost the exact size of the city’s current deficit.

Local and state taxes escalated to compensate for the loss of federal funds, with the taxes disproportionately affecting poor and middle-income people. And now the schools are facing the consequences of over-taxed poor and middle-income people who are crying “enough.”

“The last 11 years have consolidated a retreat of the federal government from its responsibility,” notes Simon of Montgomery National Governor’s Association. In 1991, Medicaid spending by states is expected to increase by nearly 25%.

Although a national strategy must be developed that demands increased federal responsibility, education activists note that for now the struggle is being played out on the local and state level.

And while the news is often bleak, the onslaught has also led to new coalitions and alliances that can be used not just to defend education, but a range of social services.

Taka Suzuki, principal at Middleton Street School in the Los Angeles area, said she was heartened by the recent formation of a group in southern California that, stave off the most devastating education cuts.

One lesson is that when the people are organized, they can counter the clout of the politically well-connected. The opposition to the cuts there was based on “a groundswell of people,” she said. “And that groundswell has generated power.”

Most important, they had learned not to assume that people don’t care.

“We assume that there is not support for the schools, but there is,” Kacen said. “We assume that people are unwilling to pay for schools, but they are.”