News
Schools Left Hanging as States Dither on Budget Cuts

School district administrators this month have been placed in a torturous holding pattern.

There's no question that state sales and income tax revenue have plummeted because of the coronavirus pandemic and that most districts will have to swallow sizeable budget cuts in the coming months if Congress doesn't come up with another relief package. But in most states, legislatures haven't given a clue as to how much public schools will be expected to cut.

Not knowing how much money they'll have to work with this fall makes it all the more difficult for school officials to decide which contracts to renew, how many teachers to hire this fall, and when to open school back up.

"It's chaos, and it's been challenging to deal with all the political uncertainty on top of the other chaos that districts are dealing with at the moment," said Heather DuBois Bourenane, the director of the Wisconsin Public Education Network, a school funding advocacy organization. "We're hearing, 'Get ready to tighten your belt.' Well, the belts were already tightend before this happened. It's stressful for our districts to try to adjust to students' growing needs with even more insufficient funds."

According to Edunomics, a school policy think tank based at Georgetown University, 27 states still have not revised their fiscal projections of how much revenue districts could lose this year and next since the pandemic has hit. Thirteen states have given school districts a general warning that they will likely soon have to make budget cuts, and only 11 states have given detailed warnings about how much revenue they can expect to lose this year.

More and more district administrators have indicated to Education Week's research center that they expect to make steep budget cuts this year. In March, when the pandemic first hit, only 42 percent of surveyed administrators said they expect budget cuts, but when that same question was posed last month, more than 52 percent said they expect budget cuts. More than a quarter of respondents said last month that they think their district will get more money next year.

When budget cuts are passed by states' legislatures later this summer, districts, with just a few weeks before school starts, will have to scramble to rewrite their budget, cut programs and lay off staff. This sort of budget-cutting can be emotionally fraught, politically contentious and, in the long run, academically destructive.

But K-12 finance experts say district administrators shouldn't wait. They suggest administrators act now to avoid haphazardly making classroom cuts this year.

"If states wait longer to revise their budget projections...that will send districts further into the future before making any spending changes which could require deeper cuts," Marguerite Roza, a Georgetown University school finance professor, during a recent webinar. "If you can't save money now, you'll have to save more and save more suddenly at the end of the summer and possibly after the school year starts. That's why those of us who look at the fiscal impact are very anxious about timing and when districts are notified. We're in chapter two of an eight chapter story. This thing is not done yet. So stay tuned."

Below are four tips from finance experts on how to mitigate budget cuts this summer.

Overcommunicate. Administrators should be explicit with school board members, parents, and teachers about the looming budget deficit, said Jonathan Travers, a partner with a partner with Education Resource Strategies, which consults with urban districts on ways to make money have more impact in the classroom. Even though administrators may not know exactly how much they will have to cut out of their budget this year, administrators should convene working groups to talk openly about what the district currently spends their money on and collect ideas on how to make budget cuts.

In Education Week's survey, 40 percent of principals said they knew "a lot" about how the coronavirus would impact their district's budget, while another 41 percent said they knew "some." The rest of the respondents said they knew little or none at all.

"A CFO's chief responsibility is to explain, not defend," said Travers said. "I think the most strategic CFOs are going to help districts understand why school spending numbers are what they are."

Assess now your students' needs and figure out what programs are working and not working. Travers has also encouraged district CFOs to work more collaboratively with academic teams to have a good understanding of where students' greatest needs are. He encourages administrators to use the time before legislative sessions to pore through test scores and talk with principals to gather anecdotal information about programs that are academically essential for struggling students. This information will come in handy when it comes time to cut, he said.

Trim costs now. Administrators of Portland, Ore., knew budget cuts were on their way so the district this spring took cost-cutting measures in preparation for a brutal budget year. It's a model administrators have encouraged other districts to replicate.

The district's school board cut one day out of the school week, closed the administrative buildings on Fridays, froze hiring, cut back on purchasing and, instituted for its entire teaching force a 20 percent pay cut. The district encouraged teachers to apply for partial unemployment through the CARES Act this year to make up for the cut in their paychecks. In total, the district made more than $10 million in cuts, which administrators predict will save more than 66 jobs next year when they expect the state to cut more than $60 million from its budget when they reconvene.

Come up with budget-cutting scenarios now. When Nolberto Delgadillo, the CFO of Tulsa's schools in Oklahoma, had just finished making drastic cuts out of his district's budget this year, an arduous, months-long process, the COVID-19 pandemic hit and oil prices tanked. It was a clear sign that he needed to quickly reconvene board members, parents, and community members to figure out what more budget-cutting will look like. Last month, he and his board came up with several scenarios in case that the state's legislature this summer cuts 2 or 5 percent out of the district's budget.

"Be as clear as possible with district leadership/key stakeholders around what is being prioritized. That is if we need to make 'X dollars worth of reductions,' we've already done the pre-work and have a general understanding of what the revised investment plan may look like."

How Districts, States Can Survive the COVID-19 Recession
Quality Counts 2020:School Finance