Recession Puts the Squeeze on School Funds

Conceived in brighter economic times, education reform legislation suddenly faces a new challenge as recession squeezes local, state and federal revenues: How will schools pay for it?

States across the country, including California, are proposing cuts in their education budgets even as Congress nears passage of landmark legislation to require, for the first time, annual testing in a critical sequence of elementary and middle school grades.

Against this backdrop of fiscal uncertainty, Republican and Democratic negotiators deadlocked Friday in a significant dispute over money for schooling children with disabilities.

Democrats and some Senate Republicans argued that the federal government should commit to paying for tens of billions of dollars in additional special education programs over the next decade, to relieve costs now borne by states and school districts.

House Republicans, siding with the Bush administration, contended that the proposal would recklessly transform a special education system itself needing an overhaul into a new entitlement.

“We’re at impasse,” declared Rep. John A. Boehner (R-Ohio), chairman of the House Committee on Education and the Workforce, after a 39-member panel of senators and representatives failed to reach agreement. The panel was named by the House and the Senate to reconcile two school reform bills approved months ago.

The lack of movement in the House-Senate conference committee disappointed many education groups that had been pushing for a funding increase. Shirley Igo, president of the National PTA, said the implementation of education reform programs across the country could be in jeopardy if more federal money is not forthcoming.

“We will see programs at the local and state levels cut because there just isn’t enough money to go around,” Igo said.

Some cuts have already begun. In a report last month timed to bolster their argument for funding increases, congressional Democrats estimated that state education budgets are falling short by as much as $11.3 billion nationwide; larger cuts are expected as state treasuries dwindle during the economic downturn. At risk are popular reforms of recent years such as class size reduction.

Republicans respond, however, that federal education spending is already on the rise. A spending bill approved by the GOP-led House in October would appropriate $29.9 billion for elementary and secondary education programs, an increase of about $5 billion from the year before. President Bush backs the increase, saying it would complement his twin reform proposals of testing all students in reading and math in grades three through eight and holding schools accountable for raising achievement. It includes new money for test development, reading initiatives, teacher quality, students in poverty and special education.

Congressional negotiators this week announced consensus on key points in the reform legislation that help states identify struggling schools, take steps to bolster their performance and shake the schools up if they fail to turn around. The issue holding up a final deal is money.

Despite the funding dispute, lawmakers remained hopeful that they could send Bush a bill by year’s end--the first reauthorization of federal elementary and secondary education programs in seven years. The White House, too, remains upbeat. Bush spokesman Ari Fleischer told reporters Friday that congressional negotiators “are getting very, very close, and the president hopes that nothing will get in the way of them finishing.”

While school reform is a popular and much-debated goal, special education in particular raises passions among educators, lawmakers and parents of the roughly 6 million disabled children. Those children are, under federal law, guaranteed equal opportunity in the public school system.

But it also affects services to all other public school students because states and school districts are forced to pick up the tab for any special education costs not covered by the federal government. And Washington, in the 26 years since Congress legislated free and appropriate special education, has never paid what was promised originally: 40% of the cost.

Today, the federal share of spending on special education is estimated at just 15%. That portion rose after several large budget increases championed by congressional Republicans--and some Democrats--during the Clinton administration.

Last spring, the Senate approved a measure sponsored by Sens. Tom Harkin (D-Iowa) and Charles Hagel (R-Neb.) to force the federal government to gradually raise its share of special education to the 40% level. Funding that proposal would cost an estimated $172 billion over 10 years--a giant sum even by federal standards.

The Harkin-Hagel amendment was attached to the Senate education bill. The House bill, however, contained no such language. Lawmakers on Friday debated whether to include the amendment in the final bill or to accept an alternative, proposed by Boehner. Boehner’s proposal would authorize--but not mandate--funding increases year by year if the special education system is overhauled. Neither proposal gained majority support from the delegations of both chambers.

Sen. James M. Jeffords (I-Vt.), who bolted the Republican Party this year after complaining that the GOP didn’t see eye-to-eye with him on a number of issues, including special education, argued that the Harkin-Hagel measure was essential. Jeffords said that, after last year’s presidential election, he traveled to Texas to plan bipartisan reforms with Bush, then the president elect.

“With budget surpluses projected for as far as the eye could see, it seemed that this nation was on the verge of making a significant investment in our educational system,” Jeffords said Friday. “For me, it was a time of optimism and hope. What a difference a year makes. Today, we face a very different economic reality. We also, however, face an administration unwilling to support the funding needed to carry out [its] own reform initiative.”