The forthcoming budget battles in K-12 education
Monday, June 08, 2020
Once we’re past the horrifying COVID-19 pandemic, states are going to be desperately looking for ways to cut expenses, if they aren’t already.
Teachers and teachers’ unions can expect their salaries, benefits and working conditions to take a hit. But how big a hit? And how should teachers and their unions respond?
How Bad Is the Financial Situation at the State Level?
On May 4, The Center on Budget and Policy Priorities released its research, determining that state budget shortfalls caused (or exacerbated) by the current pandemic will likely be about $350 billion in the current year alone, tripling the $105 billion deficit in the 2001 recession and about a 150% increase on the $230 shortfall in the Great Recession of 2009. Eventually, the Center’s researchers believe, the shortfalls for 2020, 2021 and 2022 will total about $650 billion — the largest in U.S. history.
Another budget problem facing the states is that the current federal government is disinclined to make up those shortfalls. President Trump has been clear that he “has no immediate plans to move forward” helping out states with federal funding and has blamed the shortfalls on bad decision-making in Democratic states. Like so many other issues that used to be relatively nonpartisan, the financial consequences of the pandemic have become politically weaponized.
How Can the States Solve their Budget Problems?
When it comes to funding current expenses, the states have a problem. In most cases and for most purposes, states aren’t allowed to borrow money. Yes, bonds are one way of doing that, but in most cases bond issuance requires legislative approval — and in some instances, voter approval as well.
A less complicated way for states to raise money is to raise taxes on income, property, business licensing and whatever else the state may determine to be a taxable entity, occupation or process. Here, unlike the direct borrowing of debt and the relative complications of bonds, taxation processes are already in place and have already largely survived past court challenges.
The problem with both methods — bond issuance and taxation — is that in a democracy our leaders are largely elected, and voters hate taxes. While in theory state legislatures can raise money either through bond issuance or increased taxation, the immense scale of the enormous deficits that will remain once we’re post-pandemic, almost assures that voters will hate the consequences if their taxes are raised enough to fully fund the shortfalls.
They would likely vote the legislative perpetrators out of office. Legislators, reasonably, will do what they can to avoid that. One often employed solution is to cut budgets instead, and most severely where those effected by the cuts aren’t politically powerful enough to swing elections.
Where Are the Budgetary Pressure Points?
A 2017 article in The Guardian notes that in Great Britain’s 2010 general election, there was a huge 23% difference between the percentage of rich voters and poor. In general, the article notes, poor people avoided voting in that election out of despair — after Thatcher’s turn in office from 1979 to 1990 and budget-cutting and budget-ambivalent Tory and Labour Premierships that followed, respectively, poorer voters began to feel that, “Whoever I vote for, the country’s going to the dogs anyway so I don’t bother.”
The similarly pessimistic current mood in this country, especially the despair felt by the poorest citizens, will likely have a vote-suppressing effect. This means that programs benefiting poorer Americans will likely be early on the chopping block when the necessary budget-cutting begins. Medicaid, for instance, funded about half and half by federal and state governments, is easily chopped because the states can simply refuse some federal Medicaid funds, therefore matching less. It’s been done before.
Salaries of state employees are inevitably going to be another target, but one that will affect some state employees more than others. Here, teachers should be in relatively good shape: their two major unions, the National Education Association (NEA) and the American Federation of Teachers (AFT) are two of the stronger unions in the country.
But public sector pensions are even less assailable, and present one of the larger shortfall problems. Between welfare initiatives and public sector pensions, state education budgets fall somewhere in the middle. It would be surprising, in this current health crisis and coming economic crisis, if legislators gave teachers a free ride. Some cuts will be made.
But Who Decides, Finally, Where the Cuts Fall?
As we recover from the coronavirus pandemic, some education budget cuts are inevitable. Teachers and their union representatives might concentrate on fighting those battles they can win. Instead of opposing salary cuts entirely teachers can negotiate for a contract that includes limited salary cuts in 2020 along with tax revenue-triggered elimination of those cuts in following years with guaranteed future salary increases making up for lost income during the recovery period.
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