Gathering storm

A BUDGET STORM COMES TO EDUCATION IN 2020

The Gathering Storm - How COVID-19 Crippled School Budgets

On January 19, 2020, a 35-year old man arrived at a clinic in Snohomish County, Washington, complaining of four continuous days of respiratory problems and strong flu-like symptoms.  The patient had heard reports on the news of a disease spreading in Wuhan, China, where he had recently visited.  Out of caution, he entered the clinic and became the first case of COVID-19 confirmed on U.S. soil.

Following a chorus of growing whispers of a dangerous respiratory illness originating from Wuhan, China, the U.S. had its very own Patient Zero.  The news, however, of America’s first COVID-19 patient, was met with barely a whisper from media and political voices.

Two days later, from the World Economic Forum in Davos, President Donald Trump was dismissive of the risks of COVID-19, telling CNBC’s Joe Kernen, “It’s one person coming in from China.  We have it under control.  It’s going to be just fine.”  And just like that, things were fine enough.  January ended with an exceptionally strong stock market and near-record low unemployment rates.

Throughout the month of February, despite increasing rates of respiratory illness growing in metropolitan centers across the country, the bottom line coming from U.S. federal and state leadership was that we were experiencing nothing more than the regular ups and downs of a standard flu season.

But under the radar, and talking first hand to front line healthcare workers, a restructuring of resources was occurring in local media.  Hearing local reports of mysterious illnesses and likely links to the now-global COVID-19 disease, local media began increasing coverage of what was looking more and more like the definition of a pandemic.

On February 25, President Trump wrapped up a two-day trip to India, dubbed Namaste Trump, which culminated in a packed stadium send-off event with Indian Prime Minister Narendra Modi and more than 100,000 local spectators.  Boarding Air Force One for the 15-hour return flight to the U.S., President Trump began hearing the first indications of a breaking crisis in the U.S.  As the president’s plane took flight, the harsh reality of a spreading pandemic settled across the United States.

When President Trump left for his trip to India, the Dow Jones Industrial Average was at an all-time high of 29,219.  One month later, it was falling below 19,000, representing a complete loss of all stock market value gained during three years of President Trump’s presidency.  The country, and the economy, was entering a dangerous tailspin.

School
President Trump and Melania Trump at the Taj Mahal

Throughout the month of March, bad news was met with worse news.  On March 19, the state of California ordered the closure of all schools to prevent the spread of Coronavirus in the state.  By the end of March, over half of all states in the US had statewide school closure issues in place.  The month of March came to an end with the U.S. firmly entering a recession, and over 50% of all children in the country not attending school.

The U.S. was far from alone in this unprecedented situation.  Globally, the statistics for impacted children were dismal.   Coronavirus devastated the global education system, affecting at its peak:

Coronavirus impact on schools globally
Source: UNESCO children's impact assessment

The Fog of War

By April 6, just eleven weeks after “Patient Zero” was first discovered, 48 states had full school closures in place and local businesses across the nation were ordered closed.  One week later, $2 trillion in emergency aid was being sent to businesses and families to help cope with the near-total shutdown of the country.

Schools, furiously racing to create response plans to the crisis, began shifting their entire education system online.  Google Classroom, the now-ubiquitous classroom management software, saw 50,000,000 downloads in less than a month as teachers piled their classrooms onto the platform,  For many schools and teachers, the goal of providing the highest quality education possible was replaced with a need to just be able to connect to students and ensure continued involvement between teachers, students, and parents.

At the national level, the messaging shifted to a nation at war.

“I view it as a, in a sense, a wartime President,” Trump said in mid-march. “We had the best economy we’ve ever had. And then, one day, you have to close it down in order to defeat this enemy.”

As the nation, and world, sheltered in place, one of the few bright spots of the pandemic began to emerge:  We are all in this together.  No one was left unaffected by the crisis.  The economy was shut down, schools were closed, children were without classroom routines, and all levels of government were initiating emergency response plans to counter impact of the crisis.

By the end of April, unemployment had surged from 4.4% to 14.7%.  This was the largest unemployment rate increase in the nation’s history.

Unemployment hits school budgets

In May and June, one-by-one, states began trying to re-open their economies.  Schools remained closed, but the process to restart had begun.  Schools, and teachers, were ready to look forward to reopening in the Fall, and had begun planning around the immense challenges with implementing social distancing into school-life.

School Funding - A Casualty of War

School administrators are faced with a truly unprecedented challenge.  Nationwide, administrators and teachers are under immense pressure to transform their schools, both operationally and physically, to meet the needs of ongoing COVID-19 challenges.  Throughout the country, leaders from K-12 public school districts are warning of severe consequences of looming budget cuts as state legislatures attempt to deal with the economic destruction caused by the pandemic.

In a stunning assessment of the upcoming budget crisis facing the nation’s education system, Superintendents from 63 school districts sent a letter to Congress through the nonprofit Council of the Great City Schools, in which they warned of the devastating impacts from budget shortfalls.  As an emergency measure to stem the crisis, the superintendents were asking for $175 billion to be distributed through the existing Title I formula, and an additional $27 billion in program funding and infrastructure funds.

The total emergency funding request of $202 billion comes after schools were allocated $13.5 billion from the CARES Act, which according to the letter “provided a critical lifeline for public education in this country.”  The stakes for schools and students couldn’t be higher.

“Dark clouds are forming on the educational horizon that will spell disaster if Congress does not intervene, significant revenue shortfalls are looming for local school districts that will exacerbate the disruption students have already faced. Some 40 to 50 percent of school district revenue, in fact, come from local sources that are expected to drop precipitously in the months ahead. This revenue decline will come on top of revenue losses in the months to come from state sources that have been more widely reported. Several big city school districts are now projecting 15 to 25 percent cuts in overall revenue going into next school year.”

Among the predictions made in the letter, superintendents warned that an estimated 20% loss in combined state and local revenues would result in 275,000 teachers being laid off in the metropolitan school systems alone.

To understand the crippling budget cuts looming over the nation’s schools, it is necessary to first understand how schools are funded.  In the United States, the vast majority of public school funding comes from the state and local governments.  Taxes paid by state and local residents cover an astonishing 92% of all PK-12 public school funding.

Public school funding by source
Source: US Dept. of Education, National Center for Education Statistics

At the state and local levels, the expected fall in revenue generated by the economy will cause belt-tightening across the board.  All recipients of state and local tax dollars will see a sizeable decline in their operating budgets for at least the next year, potentially much longer.  But just how large of a decline in tax revenues are state governments expecting to see as a result of the COVID-19 pandemic?

According to forecasts provided by the National Council of State Legislatures, the average forecasted decline in state tax revenue is 7.15% for 2020, and 12% for 2021.  In 2017, Elementary and secondary education accounted for 21% of all state and local direct general expenditures, the second largest spending category behind public welfare at 22%.

Budget Cuts at the Worst Possible Time

The suffocating budget cuts coming to schools are happening at the worst possible time.  District-level education budgets have been at a breaking point for years.  As the nation’s schools have aged and their infrastructure degraded, state and local taxes have regularly battled with school districts to delay infrastructure and facility upgrades.

Additionally, ongoing budget shortfalls to teacher training and development have left schools with a lack of qualified specialists to work with some of the most vulnerable special needs students.  Inequality in the availability of technology throughout the school districts has caused further disadvantages in the learning outcomes of low-income students as they were often not properly trained on hardware/software needed for the switch to distance learning during the shutdown.  Furthermore, many of these students relied entirely on their schools for hardware and internet access, meaning that they have fallen further behind with every passing day of the shutdown.

School needing repairs

Schools, for their part, have done everything they can to virtualize their classrooms during the shutdown.  However, despite their best efforts, schools will be re-engaging with a group of students in the fall who will be on average the furthest behind of any cohort in living history.  For months, students throughout the country and the world have fallen behind where they should be.  Every passing day left students further behind than they were the day before.

At a time of high stress and frustration at all levels of society, schools and teachers will be expected to make up for the lost time students have had since March.  This is where the true impact of the budget cuts will begin to be felt.  Schools, already stretched to the breaking point, will need to accomplish significantly more with significantly less resources.  Adding to the challenges facing schools are the social distancing and hygiene requirements schools will need to follow as part of the federal and state COVID-19 prevention guidelines.  Schools, as they were built, are simply not capable of coping with the complete overhaul of operations required by the COVID-19 crisis.

When schools open in the Fall, they will not be the same environments that closed in the Spring.

Dominoes Begin to Fall

As the reality of the budget crisis sets in on states across the country, Governors and Mayors are increasingly lending credibility to the dire warnings from the superintendents’ letter to Congress.  Here are just a few of the announcements that have already been made:

  • Ohio Gov. Mike DeWine announced a $300 million statewide cut to K-12 schools.
  • California Gov. Gavin Newsom announced a $6.5 billion cut from K-12 funding to help offset $54.3 billion in expected funding cuts.
  • New York Gov. Andrew Cuomo has walked back an earlier proposed 3% funding increase for 2020-2021, and instead has cut $1.1 billion from K-12 education. New York City schools lost more than $700 million.
  • Texas Gov. Greg Abbot have directed state agencies to cut their budgets by 5%, including K-12 schools.
  • Oregon is preparing significant budget cuts with state colleges and universities expecting an 8% budget cut for at least two years.
  • The chairman of Georgia’s Legislature’s appropriations committees jointly informed state agencies that a 14-percent across the board cut was coming.
  • Virginia’s General Assembly announced a freeze in all new spending for schools, as well as a review in existing spending.

These are just a few of the early announcements coming out.  We can expect that as states increasingly gain an understanding of the extent of the damage that their economies have taken, they will follow suit with spending cut announcements of their own.  And sadly, with history as our guide, we can also assume that the initial announcements we have seen coming from state governments represents the best-case-scenarios for the states.  Simply put, no politician leads with a worst-case scenario to begin with.

Red for Ed marchers

In 2018, after years of stagnant salary increases and budget shortfalls, the Red for Ed protest movement was founded in West Virginia.  The movement, seeking improved access to resources in addition to higher compensation and benefits for teachers quickly evolved into a nationwide network of sympathetic teachers who work proactively to improve conditions for their industry.  The Red for Ed movement had built itself into a network of several million members and supporters before the COVID-19 school closures.  Their membership and support ranks are swelling in anticipation of the budget crisis about to hit the nation’s school districts.  The last thing the children in our schools need now is to have their teachers on strike at the exact moment they are needed the most.

With time running out on the start of the Fall semester, there is no room for error in the communications between governments, school districts, and teachers as they prepare to take on one of the greatest challenges in our nation’s history.

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