“Public Schools Flush with Cash” — Trump’s Assessment Is Tragically Inaccurate

It is state budget season, a time fraught with accusations and distortions and even alternative facts, but one thing is very clear. When President Donald Trump declared in his Inaugural Address that public schools are “flush with cash,” he was either ignorant about some very basic realities or he was hinting about some sort of scorched earth federal policy—or both.

The President’s own federal budget proposal is due within weeks, and Robert Greenstein of the Center on Budget and Policy Priorities worries about what he thinks are likely to be large cuts to domestic discretionary spending: “Many of the cuts in the Trump team’s blueprint come from plans that the Heritage Foundation and the Republican Study Committee (RSC) issued last year, according to The Hill. The Heritage report called for more than $8.5 trillion in non-defense cuts… while the RSC report called for almost $7.5 trillion in such cuts. Moreover, the ‘Penny Plan’ that President Trump proposed during his campaign would slash non-defense discretionary funding by 2026 to an amount 37 percent below the 2010 level, adjusted for inflation, and nearly 40 percent below its lowest level under Ronald Reagan, when measured as a share of the economy. Rep. Mick Mulvaney, Trump’s nominee for OMB director, supports the Penny Plan.”

What are the realities across the state governments, where about 40 percent of school funding comes from? Despite the distortions induced by state budget politics, it is pretty clear that public schools are in trouble in many places.

Take Chicago, where, the Chicago Tribune reports: “Through legislation in Springfield, (Mayor Rahm) Emanuel’s administration had struck a tentative deal for the state to send CPS (Chicago Public Schools) an additional $215 million for teacher pensions, but that fell through when (Governor Bruce) Rauner vetoed the plan… Because of Rauner’s veto, according to the district, CPS is in the midst of instituting midyear cuts for the second year in a row. The district has put in place four furlough days, a $46 million school spending freeze, $18 million in potential cuts to independently operated (charter) schools and the elimination of $5 million in training programs to make up for roughly half of the unrealized assumption that state lawmakers would send $215 million to the district’s annual budget.”  The four unpaid furlough days for teachers, according to the district, will save $35 million, and the cuts to school discretionary funds will affect textbook purchases, after-school programs, field trips, and the number of hourly staff. The District cannot borrow because its credit rating has fallen to junk status. For all these reasons, on Tuesday, the Chicago Public Schools sued the state of Illinois, “accusing the state of employing ‘separate and unequal systems of funding for public education in Illinois.’ Chicago Public Schools officials describe the legal move as the ‘last stand’ for a cash strapped district that’s ‘on the brink.'”

Meanwhile in Ohio, the Akron Beacon Journal just editorialized that despite a years’ long legal battle in which the Ohio Supreme Court found the school funding system unconstitutional—saying the state was merely determining school funding by cutting up the state budget pie and giving schools what was left over without making an attempt to cost out what good schools really need—Ohio continues its practice of “residual budgeting” for schools: “Residual budgeting. The governor reinforced the concept when he joked at a recent award ceremony for innovators in education: ‘I’d like to give you money, but all I can give you are plaques.’  He has stressed how tight the budget must be, school funding under his (2017-2018 budget) plan increasing just 1 percent, or short of the inflation rate. This increase isn’t the result of calculating the amount necessary to ensure that students receive an adequate education. It reflects, essentially, the money left over. This residual budgeting stems, in no small way, from the relentless tax-cutting of the governor and his fellow Republican lawmakers (during) the past decade. The state today generates $3 billion less in annual revenue. Imagine a share of that sum applied to needy school districts… (S)tate funding, in real dollars (is) still below the level in 2010.”

And in New York, Governor Andrew Cuomo is trying to repeal the New York Foundation Aid Formula, created ten years ago by New York’s legislature after the state’s school funding was declared unconstitutional. In a scathing commentary, David Sciarra, Executive Director of the Education Law Center, accuses Cuomo of calling for a return to residual budgeting and massive inequality: “In his proposed 2017-18 budget, Governor Andrew Cuomo is calling for repeal of New York’s Foundation Aid Formula, the 2007 law responding to the landmark case, Campaign for Fiscal Equity v. State (CFE)… In the wake of CFE, the Legislature enacted the Formula to move the state from funding schools based on available dollars and raw politics to year-to-year determinations based on student and school need. The Formula also allocated school aid based on district fiscal capacity to raise local revenue from property taxes. To accomplish this objective, the Formula provided for a four-year phase-in of increases in state aid, or $5.5 billion statewide, the vast majority targeted to the poorest urban and rural districts. In 2009, the state froze and then subsequently cut Formula aid.  Since taking office, Governor Cuomo has staunchly resisted increasing aid to move districts towards full Formula funding. The Formula remains underfunded by over $4 billion… The Governor’s announcement that he wants to eliminate the Formula is a stunning reversal of his 2010 campaign position when he made clear the state’s responsibility for full Formula funding.”

Then there is the fiscal disaster that is Kansas, where the courts have found school funding unconstitutional but there is no realistic remedy in sight. The legislature is divided about how to address a years’ long budget crisis stemming from big cuts to personal income taxes in 2012 and 2013.  The Associated Press’s John Hanna reported last week: “Top Republican legislators in Kansas on Tuesday cooked up an unappetizing budget-balancing stew of personal income tax increases and education spending cuts, defying GOP Gov. Sam Brownback on taxes and past court rulings on education funding.”  One state senate committee has proposed boosting income taxes while another suggests reducing state education aid by $279 per student. Hanna reports: “Kansas faces a projected shortfall of about $320 million in its current budget that must be closed before July 1 and total gaps of nearly $1.1 billion through June 2019.” Governor Brownback continues to insist, despite all evidence to the contrary, that the 2012-2013 personal income tax cuts will grow the economy.

The Center on Budget and Policy Priorities continues to warn: “Public investment in K-12 schools—crucial for communities to thrive and the U.S. economy to offer broad opportunity—has declined dramatically in a number of states over the last decade. Worse, most of the deepest-cutting states have also cut income tax rates, weakening their main revenue source for supporting schools. At least 23 states will provide less ‘general’ or ‘formula’ funding—the primary form of state support for elementary and secondary schools—in the current school year (2017) than when the Great Recession took hold in 2008.”

“Flush with cash” is not the phrase I’d use to characterize this situation.