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Fiscal-cliff deal means more uncertainty for school budgets

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REUTERS/Mike Blake
In the fiscal cliff deal, most of the questions affecting federal funding for K–12 schools were left unanswered.

On New Year’s Eve, when Congress and the White House announced a deal to avert the so-called fiscal cliff, precious few education administrators hereabouts reached for the champagne. After a decade of eroding funding, K-12’s beleaguered bean counters understand of mini-cliffs, shifts and other stop-gap fiscal maneuvers all too well.

“Obviously, it doesn’t help much,” said Scott Croonquist, executive director of the Association of Metropolitan School Districts. “It doesn’t kick the can down the road much further.”

More money would be nice, he and other policymakers have said repeatedly, but so would a stable, predictable revenue stream that would allow administrators to minimize the churn students and teachers are expected to cope with.

Under the terms of the deal, nearly across-the-board cuts of 8.2 percent in federal funding will be postponed by two months. During that time, lawmakers and the administration are to continue to try to hammer out a final budget for fiscal year 2013, which began in October.

The cliff itself was devised in August 2011 as part of a stop-gap solution to another standoff — that one over raising the national debt ceiling, which has been hit again.

NCLB overhaul seen as unlikely

Adding insult to injury, the argument that’s bound to ensue likely also kicks the can down the road concerning another item on which lawmakers and the administration have been deadlocked for years: the overhaul of the nation’s fatally flawed education reform law.

“The more they push the fiscal decisions off, the more unlikely it becomes that we’ll have a reauthorization of the No Child Left Behind (NCLB) act any time soon,” said Croonquist.

Minnesota school districts are already at work on their budgets for fiscal year 2014, which begins at the end of June. The compromise only adds to the uncertainty that has hampered their ability to plan since Minnesota began resorting to cuts and short-term accounting fixes nearly a decade ago.

Unlike in other sectors, the effect on education of the government shutdown that would occur if no deal is reached in March won’t be felt immediately. Because of the way federal education revenue streams are funded, most of the cuts would take effect at the start of the 2013-2014 school year.

And while the cuts would be the largest in history to education funding, they would not be felt as dramatically here as in other places. Minnesota schools get the lion’s share of their funding from the state. The timing of the compromise means Congress will have to come up with a new agreement while the Minnesota Legislature is in the thick of creating the budget for the next biennium. The across-the-board nature of the federal funding cuts that could ensue would have a major impact on local lawmakers’ ability to address the needs of the state’s schools.

The potential impact of another impasse is hard to overstate. The cuts, which would come on the heels of budget reductions in 2011, would total more than $4 billion this fiscal year and would continue over a 10-year period, according to the National School Boards Association. Nationwide, poor and disabled students would feel a disproportionate share of the brunt and some 280,000 low-income students would lose their free lunches.

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