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March 3, 2010

Getting Tough in Kansas City

Frederick Hess:

Across the nation, districts are only enduring the first phase of what is likely a several-year stretch of tough budgets. Why? First, property taxes account for so much of school spending, residential real estate prices are only now bottoming, commercial properties will be falling into 2011, and states adjust valuation on a rolling basis. This means the impact of the real estate bubble likely won't fully play out until 2014 or so. Second, thus far, districts have been cushioned by more than $100 billion in stimulus funds. Third, going forward, K-12 is going to be competing with demands for Medicaid, transportation, public safety, and higher education--all of which have been squeezed and will be hungry for fresh dollars when the economy recovers. And, fourth, massively underfunded state and local pension plans will require states to redirect dollars from operations. All of this means that the funding "cliff" looming in 2010 to 2011 is steeper and likely to be with us longer than most district leaders have publicly acknowledged.

Early responses to this situation have been inadequate, to put it mildly. Districts first took out the scalpel and turned up thermostats, delayed textbook purchases, and reduced maintenance. Now they're boosting class sizes, raising fees, and zeroing out support staff and freshmen athletics. It's going to take a lot more for districts to thrive in their new fiscal reality. It would behoove them to take a page from the playbook of new Kansas City Superintendent John Covington.

Posted by Jim Zellmer at March 3, 2010 1:02 AM
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