Recession reality for schools: Now what?

Budget cuts in seven states exceeded 10 percent; school employment has also stagnated
By: | October 25, 2016

Schools still feel the effects of post-recession budget cuts eight years after the economic crisis reached its zenith.

A study by the Center on Budget and Policy Studies showed that 25 states in 2014 were spending less per student than before the recession, adjusted for inflation.

Budget cuts in seven states exceeded 10 percent, according to the study by the group that analyzes state and national government programs. In 31 states, local government spending per student fell between 2008 and 2014.

Employment has also stagnated—the number of school workers has decreased by 241,000 nationally since its peak in August 2008.

However, in the same period, the number of children enrolled in schools has risen by about 1.1 million, according to the study.

Many states have not kept up with rising enrollment and inflation, the study says. Forty-seven percent of school funding comes from states, while the majority of the rest comes from federal programs such as Title I.

The states that feel the school budget crunch most intensely are those that cut taxes heavily in the wake of the recession, says Michael Leachman, director of state fiscal research for the Center on Budget and Policy Studies.

“I think what stands out is that some states have really undermined their ability to implement reforms to improve their education” Leachman said.

California’s wealth

While most states have been unable to raise funds, California passed a proposition in 2012 that increased taxes on wealthy residents with incomes of $250,000 or more.

Since then, Proposition 30 has raised $31.2 billion for its schools, according to the California Department of Finance. In addition, education spending has increased by $24.6 billion since 2012.

The five-year bill is set to expire in 2017, but Proposition 55 aims to extend the program for another 12 years with the same funding measures intact.

Leachman believes the increased taxes and spending has led to a quicker recovery in several states, including California and Minnesota.

“Most states have gradually improved their funding as they are recovering from the recession” Leachman says. “I’d say the first lesson is that these big income tax-cutting states have harmed their ability to recover from the recession and keep their state competitive in the future.”