Tough times hit schools, hard
Published 8:02 pm Tuesday, July 7, 2009
It is clear that this economic downturn is the worst since the Great Depression. Two out of the three major American car makers had to declare bankruptcy. The financial system, much of the reason for the meltdown, needed to be shored up by the federal government. Unemployment has risen to a thirty-year high. There hasn’t been good economic news in what seems like forever.
The economic troubles have also hit our schools hard, placing them in the worst funding situation in a generation. We are now entering a time where all the progress we’ve made, all the investments in the classroom that have paid handsome dividends, are at-risk if things do not stabilize.
Alabama funds it schools primarily with state income and sales taxes, which are earmarked by the state constitution for education. When the economy is normal, with moderate growth and healthy activity, these two revenue streams generate sufficient funds for our schools. However, when economy stumbles and people pull back on spending, unemployment rises, and the funds generated by these sources also stumbles.
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For the first time since the early 1980s, there will be a second consecutive year of dropping revenue. Last year revenue dropped, but that shortfall was covered by reserves saved during the early part of this decade. However, continuing economic troubles are deepening the problems for school budgets.
Revenue coming to the state Education Trust Fund this year has fallen at a rate so fast that school and finance officials are almost shocked. The state finance department said the trust fund took in $4.086 billion in the nine-month period that ended last week, a drop of $387.6 million, or 8.7 percent, compared to the same period a year earlier. Revenue officials say June’s revenue collections were even worse, dropping 12.9 percent from the same month last year.
Already schools are in a nine percent proration, a cut mandated by the constitution and called by the governor when it became clear that revenue would not be sufficient to meet the budget. The proration came on top of cuts made by the Legislature of almost five percent of the overall education budget for the current year.
It could be worse.
Alabama has rainy day funds for education that we have been drawing on to lessen the effects of faltering revenue. The governor originally declared a proration of 12.5 percent, but was able to reduce it to nine percent by drawing down $221 million from one of the rainy day accounts. There is now $217 million remaining in available rainy day funds, and if revenue continues to falter over the summer the governor can release it to local schools to make sure the proration does not increase.
Also, in the economic stimulus package passed earlier this year by Congress, there are education budget stabilization funds that go directly to school systems. Without this federal assistance, we could have been looking at cuts of up to 20 percent, the loss of thousands of teachers, and wholesale devastation of programs that took years to build.
For example, it took us ten years to build and expand the nationally renowned Alabama Reading Initiative and place it in every school. For that investment, we got the largest jump in reading scores in the nation and ensured success for those students in the future. If proration was left unabated, funding for that program would have been wiped out and much of the progress put in jeopardy.
There is no getting around the belt-tightening, nor should there be in this current economy. We have made the cuts in education as orderly as possible. We have tried to budget in a way that reduces the hit to the classroom as much as possible. We are doing what we can to protect our children’s future during this time of economic trouble.
Let us hope that the economy turns around soon. Not only will it help all of us, it will also help protect our schools.
AJ McCampbell is a state representative serving Marengo County.