Annals of the Fiscal Crisis: Schoolhouse Rocked

by Kenan Fikri | April 23, 2010

While bankers again swim down a Wall Street awash in profits and the IMF celebrates upwardly-revised global growth forecasts this week, the local government fiscal crisis continues. 

Last week we reported on some provocative stop-gap measures in Colorado Springs, which has among other things switched off half the street lights. This week’s story is more sobering and more pervasive--and suggests that the fiscal crisis will now start hitting communities at their hearts:  their schools.  

Several prominent news outlets (The New York Times and The Washington Post among them) ran stories this week portending doom in classrooms and teacher’s lounges across the nation come school year’s end. Districts find themselves forced to grapple with a triple-whammy of precipitous falls in property tax revenues (receipts only adjust to downturns with a lag), cuts in state aid,  and the trailing off of stimulus money (most of the $100 billion that went to states, and from there school districts, has been exhausted) . Secretary of Education Arne Duncan warns of an “education catastrophe” with up to 300,000 teaching jobs in jeopardy. The Los Angeles Unified School District alone must scramble to plug a deficit next year of $683 million. Senator Harkin (D-IA) introduced a bill last week for another bailout--this time for schools--of $23 billion.

As my colleague Mark Muro warned months ago in this paper, the fiscal crisis’ severity is going to force public sector cuts that will in many locations soon go way beyond simply trimming the fat of local government.

Education may fall on the spending side of the ledger, but it’s really investment--investment in national prosperity as much as individual human capital. With administrators forced to lay off teachers, increase class sizes, reduce classroom hours, and cut back on “frills” like art instruction, after-school activities, and field trips, the quality of education will inevitably suffer. That seems to me something the country can ill afford.

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