Even New Jersey, the State with the Best Funded Schools, Needs a 2nd Federal COVID-19 Relief Bill

In the midst of the COVID-19 recession, even New Jersey, the state with the nation’s best school funding system, can’t maintain its constitutional obligation without additional federal help through the relief package which was first proposed by the U.S. House of Representatives in May.  U.S. Senate Republicans have refused to consider a second COVID-19 relief bill through the whole summer and into the fall, but discussions had revived in recent days.  Just yesterday, however, President Trump seemed to kill any chance that a second federal relief package will be forthcoming before the November election.

In New Jersey, the state supreme court has held New Jersey’s legislature accountable for fulfilling its constitutionally defined responsibility to fund the state’s public schools.  In his 2013 book, Improbable Scholars, David Kirp, a professor of public policy at the University of California at Berkeley, describes the long series of decisions in New Jersey’s state constitutional case of Abbott v. Burke: “Beginning in the early 1990s, additional help came from an unexpected source—the New Jersey Supreme Court.  Over the past half-century, those justices have acquired a reputation for the boldness and controversiality of their opinions… None of the court’s decrees has made a bigger splash or taken a bigger bite out of the state treasury than the epic school finance case Abbott. v. Burke. In twenty-one decrees issued over the course of nearly three decades, the justices have read the state’s constitutional guarantee of ‘a thorough and efficient system of education’ as a charter of equality for urban youth. That 1875 provision, and the court in its historic 1990 ruling, Abbott II, meant that youngsters living in poor cities were entitled to an education as good as their suburban counterparts… Money cannot cure all the ailments of public education…. But the fact that New Jersey spends more than $16,000 per student, third in the nation, partly explains why a state in which nearly half the students are minorities and a disproportionate share are immigrants has the country’s highest graduation rate and ranks among the top five on the National Assessment of Education Progress, the country’s report card. The additional money also helps to account for how New Jersey halved the achievement gap between black, Latino, and white students between 1999 and 2007.” (Improbable Scholars, pp. 83-85)

However, pledges to rectify inequity depend on annual appropriations that sometimes don’t keep up with the promises. Even New Jersey has fallen behind in recent years.  While New Jersey has continued to increase school funding, which averaged $21,866 per pupil last year, over the last decade, the state has fallen behind in its pledge to fully fund its school formula:  POLITICO’s Carly Sitrin reports that, “new research suggests New Jersey’s failure to fully fund its approach to education spending after achieving those goals has left a significant gap between white and Latinx students.” And the problem has worsened this year as the state has fallen into recession due to COVID-19.

Sitrin explains: “Democratic Gov. Phil Murphy made a campaign promise to fix that situation by fully funding the formula—even cut a deal with the state’s legislative leaders to do that. But the pandemic-induced economic downturn has put that effort on pause, leading Murphy on Tuesday to sign a state budget that keeps school funding flat. The move sets back the state’s seven-year commitment to achieve equity in spending for all children… Yet, Murphy and state lawmakers are celebrating the flat funding as a success. After all, they say, the state didn’t have to cut school aid during a pandemic that devastated revenues. At the same time, they’re hoping the federal government will come through with rescue aid next year.”

A long problem in school funding is that too many states have failed to get back on track after recessions. The 2018-2019, Red4Ed wave of teachers’ strikes and walkouts across the states—from West Virginia, Kentucky, Oklahoma, and Arizona to Los Angeles, Oakland, and Chicago—were an attempt by schoolteachers across the states to draw attention to class sizes of 40 students; widespread shortages of counselors, school social workers, librarians and school nurses; and teachers’ salaries so low that many could not afford the rent on a one-bedroom apartment in the communities where they were teaching.  These were the lingering effects—a decade later—of the 2008 recession.

The question now is how much the COVID-19 recession will further depress state spending on healthcare, colleges and universities, K-12 public education, and other state functions. Until yesterday, a second federal COVID-19 relief bill had seemed at least possible. House Speaker Nancy Pelosi and White House negotiator Steven Mnuchin had revived discussions last week. But yesterday afternoon, the Washington Post‘s Erica Werner and Jeff Stein reported that President Trump abruptly called off any negotiations for a second stimulus bill until after the election: “Economic relief talks screeched to a halt Tuesday as President Trump ordered Treasury Secretary Steven Mnuchin to stop negotiating with House Speaker Nancy Pelosi until after the election…  Trump’s surprising announcement stood in stark contrast with recommendations from Federal Reserve Chair Jerome H. Powell, who had said in a speech hours earlier that more economic stimulus was needed to sustain the recovery… Barring another unexpected development, Trump’s declaration kills any near-term chance of new aid for millions of Americans who remain out work and at risk of eviction. Pelosi and Mnuchin spoke shortly after Trump’s tweets, and Mnuchin informed Pelosi that the negotiations were indeed over…”  Assistance for the state governments that support roughly 40 percent of school funding across the states had been part of the discussions.

In, Schoolhouse Burning: Public Education and the Assault on American Democracy, a new book on the importance of the nation’s founding principles—guaranteed in the federal founding documents and in the 50 state constitutions, Derek Black emphasizes that these documents have made it possible for states like New Jersey to maintain their constitutional commitment to education, at least when times were not so hard as the current recession.  And even in bad times, such documents help us remember how far we are straying from our society’s most basic commitments.

The New Jersey Supreme Court’s Abbott v. Burke decisions to protect equitable school funding are among the best examples across the states of Black’s argument: “The foregoing principles—the right to an adequate and equal education, making education the state’s absolute and foremost duty, requiring states to exert the necessary effort (financial or otherwise) to provide quality educational access, placing education above normal politics, and expecting courts to serve as a check—are all in the service of something larger: the original idea that education is the foundation of our constitutional democracy.  Education is the means by which citizens preserve their other rights. Education gives citizens the tools they need to hold their political leaders accountable…  Democracy simply does not work well without educated citizens.” (Schoolhouse Burning, p. 224) 

Attacks on Teachers Have Been Central to Republicans’ Agenda to Reduce Government Spending

Among the lingering effects of state budget reductions during the 2008 Great Recession have been widespread drops in teachers’ overall compensation. Although some states and local school districts do their part to pay their teachers fairly, and some provide the fringe benefits such professionals should expect, overall according to a new report from the Economic Policy Institute, “teachers are paid less (in wages and compensation) than other college-educated workers with similar experience.”  And, “(T)his financial penalty discourages college students from entering the teaching profession.”

Our economy has now entered another recession due to layoffs and business closures during COVID-19, and without further federal relief to states, teachers are likely once again to be the victims.

All summer and through September, U.S. Senate Republicans have refused to negotiate with House Democrats, who passed their bid for a second coronavirus relief bill, the HEROES Act, on May 15.  Until this past weekend, it looked as though Congress would recess until after the election without the Senate’s agreeing even to take up the bill for consideration.

House Speaker Nancy Pelosi and White House negotiator Steve Mnuchin returned to discussions last week, but until the President became ill with COVID-19 over the weekend, it looked as though progress had broken down. The President’s infection by COVID-19 and indications that the economy will continue to lag have, apparently, brought Pelosi and Mnuchin back to the table over the weekend, and have also made Senate Majority Leader Mitch McConnell and his caucus more amenable to further federal investment.  A relief package is needed to help the unemployed, to strengthen SNAP (food stamps) and Medicaid, and to help states avoid catastrophic budget cuts like those that have continued to depress school funding more than a decade after the 2008 recession.

The Washington Post‘s Erica Werner and Jeff Stein reported late Friday on what appears to have been a turnaround in the negotiations once the President became ill with COVID-19: “House Speaker Nancy Pelosi said Friday she anticipates striking a bipartisan economic relief deal with the Trump administration, suggesting that the president’s coronavirus diagnosis could speed up an agreement… Democrats had sought a $2.2 trillion package, while the White House’s most recent offer was closer to $1.6 trillion… The pace of talks—and the possibility of a deal—have picked up markedly in recent days… The U.S. economy plunged sharply into a recession earlier this year when the coronavirus pandemic led many companies and employers to lay off workers and temporarily close.  The economy recovered a bit during the summer, but it has shown signs of lagging in recent weeks…. In a sign that a deal could be emerging, Mnuchin told at least one Republican senator in a phone call Thursday night that the agreement with Pelosi would include a substantial amount of money for state and local governments, a provision numerous conservative Republican senators have strongly resisted….”

However, after the President was hospitalized and three U.S. Senators tested positive for COVID-19, Senate Majority Leader Mitch McConnell announced that he is recessing regular sessions of the Senate until October 19 to protect the health of the members. His decision puts the future of a further COVID-19 relief bill in question.

Why does a second federal relief package matter to states and to their public school districts? First of all, state budgets are lagging in the current recession, but, by law, states are prohibited from running deficits. Further, the effects of the 2008 recession still linger in many states. And, as school funding expert, Mark Weber explains, “Fiscal relief for states is fiscal relief for schools.” Weber continues: “Historically, federal revenues accounted for between 7 to 13 percent of total K-12 funding…. The biggest sources of funding for K-12 schools have been state and local revenue… (E)ach accounts for about half of the remainder after separating out federal funding. Of course, that varies considerably from state to state… But even in the states where districts rely the least on state funding—Missouri, Nebraska and New Hampshire—state funding still accounts for a third of revenues. In the majority of states, half or more of all revenues for schools come from the states themselves. Funding schools is actually one of the primary fiscal activities of the states.”

The Senate’s refusal to negotiate all summer with House Democrats reflects a much larger problem in economic and political ideology, however.  In Schoolhouse Burning: Public Education and the Assault on American Democracy, a new book exploring a growing trend of politicians’ lack of willingness to support federal and state constitutional responsibilities, Derek Black contends that states’ response to the 2008 recession exposed something deeper than the precipitous drop in state tax receipts when the housing market collapsed. What if, as the U.S. Senate has shown us this summer, political leaders are giving up on building the public will to support civic institutions like the public schools which have defined our society for more than 200 years?

Black explains: “Before the recession of 2008, the trend in public school funding remained generally positive… Then the recession hit. Nearly every state in the country made large cuts to public education. Annual cuts of more than $1,000 per student were routine.”  But the recession wasn’t the only cause of money troubles for public schools: “(I)n retrospect…. the recession offered a convenient excuse for states to redefine their commitment to public education… By 2012, state revenues rebounded to pre-recession levels, and a few years later, the economy was in the midst of its longest winning streak in history. Yet during this period of rising wealth, states refused to give back what they took from education. In 2014, for instance, more than thirty states still funded education at a lower level than they did before the recession—some funded education 20 percent to 30 percent below pre-recession levels.”  (Schoolhouse Burning, pp. 31-33)

By refusing even to negotiate with Speaker Pelosi all summer long, Senate Majority Leader Mitch McConnell and his Republican majority have appeared committed to neglecting public purpose and public responsibility in their refusal to raise the federal deficit (despite their giant 2017 tax cuts for the wealthy and corporations).

Last week, the Center on Budget and Policy Priorities’ Robert Greenstein enumerated several basic responsibilities the Senate has seemed determined to abandon by refusing to negotiate: “If policymakers can’t agree on a package… the coming months will be much more difficult for many individuals and families across the country, for numerous small businesses, and for the economy as a whole… (J)oblessness remains high, with job losses concentrated among workers without a college degree… Some 35 million people including 9 million children, are unemployed or live with an unemployed family member… Compounding these concerns, state and local revenues have fallen from pre-pandemic levels even as states and localities face large new pandemic-related costs, leaving them with gaping budget holes. As of August, about 1.1 million public-sector workers had lost their jobs since February…. A number of states have indicated that without substantial relief soon, they will institute more and deeper cuts… In addition, the package would raise the maximum SNAP (food stamp) benefit, which is particularly important for the lowest-income households since they were left out of an earlier increase… The package would also temporarily expand… important refundable tax credits.  It would make the full $2,000 Child Tax Credit available to poor and low-income children, who now get a partial credit or none at all because their incomes are too low… It boosts Medicaid funding to help cash-strapped states cope with rising caseloads and costs and avoid cutting health benefits. And it includes important public health funding to help combat the pandemic more effectively.” If Congress fails to approve a deal, the real worry as some states have, over more than a decade, chosen to avoid facing the lingering effects of the 2008 recession, is that those problems will be compounded once again, as states are forced to ratchet down spending.

In mid-September, the Economic Policy Institute (EPI) showed the long term effects of the kind of government stinginess we see in too many states and which we have watched this summer in the U.S. Senate’s refusal to consider continued federal relief. Sylvia Allegretto and Lawrence Mishel released their annual report on the long-term teacher pay penalty which is making it hard in too many states to attract enough college students into teacher preparation programs and making it difficult for states to hire enough quality teachers.  After the Red4Ed wave of strikes and walkouts across the states—from West Virginia to Kentucky to Oklahoma to Arizona and other states and cities—in 2018-2019, some states at least temporarily made teachers’ salaries and benefits fairer last year.  But the compensation gap between teachers and other professionals remains sizeable.

Allegretto and Mishel explain:”The teacher wage penalty has grown substantially since the mid-1990s… The regression-adjusted teaching wage penalty was 6.0% in 1996.  In 2019, the penalty was 19.2%..”

They continue: “The wage premium that women teachers experienced in the 1960s and the 1970s has been replaced by a significant wage penalty… (W)omen teachers enjoyed a 14.7% wage premium in 1960…. In 2019, women teachers were earning 13.2% less in weekly  wages than their nonteaching counterparts…. The wage penalty for men in teaching is much larger than it is for women… and it too has worsened considerably. The teacher wage penalty for men was 16.6% in 1979.  In 2019, male teachers earned 30.2% less than similar male college graduates who chose a different profession. This explains, to a large degree, why only one in four teachers are men.”

Have rising benefits compensated for the large teacher pay penalty? “While teacher wage penalties have worsened over time, some of the increase may be attributable to a tradeoff school districts make between pay and benefits.” But, “The benefits advantage of teachers has not been enough to offset the growing wage penalty…  The bottom line is that the teacher total compensation penalty grew by 7.5 percentage points from 1993 to 2019.”

Finally Allegretto and Mishel conclude: “The teacher wage penalty exceeds 20% in 21 states and in the District of Columbia… In no state, on average, does the relative wage of teachers surpass that of other college graduates. These inequities must be addressed if we are to ensure that the brightest, most highly skilled professionals are at the head of each and every classroom, and to retain experienced teachers in the mix.”

In his new book, Derek Black explains how growing attacks on schoolteachers over the past decade have been an integral part of the larger far-right attack on government spending and public purpose: “Conservatives who believed the unions had too much political power teamed with education reformers who thought the teaching profession needed an overhaul. Government leaders looking to shrink public investments were eager to listen. The recession provided a perfect opportunity and justification for scaling back teachers’ salaries, rights, and political influence… Across the nation, states made major changes to teachers’ collective bargaining agreements, salary structures, overall benefits, and teaching expectations without giving teachers anything in return.” In Wisconsin, after Governor Scott Walker passed legislation attacking public sector collective bargaining in 2011, “Teacher compensation took a direct hit too, decreasing by 8.2 percent in inflation-adjusted terms. Within four years, it fell even more—a whopping $10,843 from teachers’ paychecks and benefits disappeared.” (Schoolhouse Burning, pp. 42-43.”

Let’s hope that Speaker Pelosi and Senate Majority Leader McConnell will deliver a relief package which will at least help prevent states from being forced to cut teachers’ salaries further.  And in the longer term, it will be essential to turn around the  ideological attack on public schools. They are at the heart of our nation’s promise of opportunity for our children.