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SCHOOL DISTRICTS FEEL THE EFFECTS OF STATE BUDGET DEFICITS: Less Than Expected Federal Funding Exacerbates Squeeze

According to a new report by the National Conference of State Legislatures, state budget shortfalls have grown by 50 percent in the last two months. The Feb. 4 report says that two-thirds of the states must reduce their budgets by a total of nearly $26 billion between now and June 30, the end of the fiscal year for most states.

At least 30 states say revenue collections are below budget forecasts and 37 states say spending is exceeding budgeted levels, with all but five reporting excessive Medicaid or other health care costs. Thus far, few states have made a decision to raise taxes out of fear that raising taxes would only further slow the state’s economic recovery, and cause even greater revenue loss. In order to balance budgets, many states have been tapping rainy day funds and cutting spending.

As a result, education spending has been a target in several states. Twelve states have cut spending on higher education and nine have cut elementary and secondary education. Twenty-nine states have imposed across-the-board budget cuts. These cuts worry state budget planners who are also concerned because the proposed federal budget for next year does not cover the cost of No Child Left Behind, special education mandates, or the cost of election reform.

State budget cuts and climbing costs for the upcoming school year are also affecting local school districts. When combined with less federal funding than expected for the No Child Left Behind Act, many school districts are forced to cut budgets. Some districts have had to lay off staff, including teachers and teachers’ aides, cut school days from the school calendar, and increase class sizes.

A related report by the Education Commission of the States (ECS) found that many states are falling behind in meeting the requirements of NCLB. According to the report, released Jan. 28, only 12 states are on track to comply with even half of the major federal requirements. Of the 40 NCLB requirements that ECS examined, only 12 states are close to fulfilling half or more. North Carolina is the furthest along, having met 26 requirements, but Nebraska, New Hampshire, and Oregon have met only three.

In response to the report, U.S. Department of Education spokesman Dan Langan told USA Today that states are “indeed making progress” and that “what you see today may not be the same tomorrow, because of a change in state policy or program.” A few days later, on Feb. 3, U.S. Secretary of Education Rod Paige announced that all 50 states, the District of Columbia and Puerto Rico, had submitted their state educational accountability plans for review on time. The plans detail how and under what timeline states plan to achieve full proficiency toward state academic content.

The ECS Web site is now providing a day-to-day status of how far along states are in meeting NCLB requirements.

National Conference of State Legislatures report

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