Drastic cuts to public school spending could come as soon as this summer, an acceleration of the fiscal pain that analysts had already been forecasting for K-12 education.

State budgets have been massacred by the widespread shutdown of the economy. And school finance experts—updating their forecasts on a near-daily basis—are now saying public schools will be forced as soon as this summer to make dramatic cuts to their budgets.

Signs of the severity are already emerging. In Hawaii, the Democratic governor is considering deep cuts to teacher salaries as early as May 1.

For the last several weeks, K-12 analysts have assumed that districts wouldn't see budget cuts until spring 2021 because the federal government sent out a $13.5 billion stimulus fund, states have stored up billions of dollars in rainy day funds and because making mid-year cuts to public schools is so politically unappealing and disruptive.

But states have already lost tens of billions of dollars for the last quarter of this fiscal year and will likely lose hundreds of billions more in the 2021 fiscal year as federal and state governments struggle to contain the spread of the coronavirus. The Center on Budget and Policy Priorities earlier this week estimated that states will collectively lose close to $500 billion next fiscal year.

"I can't see a school district that won't be looking at budget cuts come this fall" Michael Griffith, a fiscal analyst and school finance expert said Thursday morning. "Some might be dramatic. Some places might start seeing cuts this school year."

Pay Cuts, Furloughs, Layoffs Are All on the Table

As more and more people lose their jobs and file for Medicaid and unemployment benefits, that puts a squeeze on state budgets and forces cuts elsewhere. On average, K-12 makes up more than a quarter of states' budgets. In some states, it amounts to more than half. More than 22 million people have filed for unemployment since President Donald Trump declared the coronavirus pandemic a national emergency on March 13.

The severity of the cuts will vary by state and district, depending on how much their revenues are tethered to income, oil, and sales taxes, all of which have tanked in the last two months.

Earlier this week, Gov. David Ige, the Democratic governor of Hawaii, said he is considering cutting teachers' and other public employees' pay by 20 percent starting May 1. The statewide school system, already woefully underfunded and experiencing a teacher shortage, is heavily reliant on tourism sales tax.

And in Nevada, another tourism heavy state, Gov. Steve Sisolak, a Democrat, asked every state agency, including the education department, to find more than 4 percent in cuts this fiscal year.

In a conference call with the state's teachers' union this week, a teacher asked Gov. Sisolak whether there would be teacher layoffs or furloughs this summer.



"I'll be honest with you," he responded, according to the Nevada Independent, failing to give her a yes or no answer. "I have a lot of sleepless nights over this. One thing I don't get much of any more is sleep. This has weighed heavily on my mind for weeks already as it relates to our budgets."

In other states, school district officials should prepare for the likelihood that legislatures this summer will reconvene and cut millions of dollars out of K-12 budgets to make up for lost revenue, fiscal analysts now say.

That will likely require superintendents to revise their 2020-21 school year budgets and, possibly, lay off teachers and staff just weeks before school starts this fall.

That sort of last minute scramble will have a devastating impact on teaching and learning, especially for schools that serve large populations of vulnerable students.

The severity and speed at which the economy is cratering has placed into disarray the school finance community which, for years, has used outdated district spending numbers, inefficient and ineffective funding formulas, and piecemeal solutions to send money to districts that need it the most, Griffith said.

During the last recession, advocates and lawmakers had time, data, and superintendents' testimony to make strategic cuts to public schools. That option is not really available now.

"People felt like the recession moved quickly," Griffith said. "But that took an extended period of time for things to happen. It didn't hit rock bottom until 18 months in. We've aleady got worse numbers now and we're only five to six weeks into this."

Marguerite Roza, a Georgetown University K-12 finance professor who has studied cuts during the last recession, said in a webinar Thursday that legislatures will likely first cut new initiatives such as Pre-K programs, counselors, and programs for English-language learners, before considering cuts to states' funding formulas, which could force districts to enact furloughs and layoffs.

"Historically, districts are insulated from economic shifts so when a contraction happens, many are unprepared," Roza said.

Griffith said an analysis he did two weeks ago that described the fiscal impact school systems could face next year when factoring in new federal money is now outdated.The $13.5 billion included for schools in the coronavirus stimulus measure passed by Congress, known as the CARES Act, he said, will not spare the vast majority of districts.

School funding advocates, he said, should push for another federal bailout, one that is exclusive to public schools and amounts to more than $200 billion. The question for school officials now, he said, is whether the economy will immediately bounce back or not.

"These are monumental figures," Griffith said, pointing to unemployment numbers and states' revenue forecasts. "No models can do these sorts of predictions. We have no previous experience dealing with something like this."

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