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Schools get a break Federal stimulus offers breathing room but cost-saving changes are still needed

The massive federal stimulus package, for all its potential for misspending and delayed spending, does include a large sigh of relief for school districts. The package gives school boards across the state some "breathing room" when crafting their 2009-10 budgets, according to the New York State School Boards Association. And Gov. David A. Paterson, in Washington last weekend to meet with the administration along with other governors, noted that it will allow the state to ease some "egregious" cuts to education spending.

But breathing room doesn't mean breathing easy.

The nation's economic crisis and New York State's downward fiscal spiral offer an opportunity for reform. And reform efforts must continue, because the stimulus aid will not be a long-term fix.

A federal bailout that might cover a couple of years' shortfall should not disengage plans to consolidate services for better savings, a much more realistic immediate goal than the reopening of union contracts. Boards must continue to pursue contract concessions -- they really have no choice -- but in the meantime, practical cost-saving measures must be identified and put in place.

New York schools can expect to receive $2.7 billion in state education stabilization funding from this package, along with an additional $1.8 billion in Title I and special education funding. The money would be spread over the next 27 months.

School districts are fairly dependent upon state aid. The proposed $700 million cut in that Albany-funded aid across the state would hit hard, forcing many districts to explore the possibility of layoffs. The State School Boards Association estimated that there would be about 6,000 jobs lost throughout upstate and Long Island.

The stimulus package amounts to a life preserver, at least for the next couple of years. It probably would have been a challenge for the state to make up the projected shortfall, and it may still prove difficult to do that once the stimulus funding ends.

The reprieve now seems likely to give school districts at least two years of level revenue and, possibly in some cases, increases. The association expects $1.2 billion in the first year and that, with the budget cut, leaves $500 million in excess of the state aid cut. It remains to be seen how that will be distributed, though it may cycle through the state school aid formula.

The same situation repeats itself in the following school year, 2010-11, when another $1.2 billion from the federal government arrives.

Had school districts not been held harmless by an influx of federal dollars, districts would be in dire straits this year. But those dollars largely will be borrowed overseas, and will be a liability for the future generations now being educated. School boards should feel an obligation to use that debt wisely now and to take steps toward the changes that must happen if future shortfalls are to be met -- re-examining health insurance, employee contributions and so on. Many districts in this area already participate in the Erie I BOCES Healthcare Consortium, for example, and more school districts may move in that direction as health insurance costs rise.

More immediate and doable is the sharing of services, and functional consolidations such as payroll and purchasing. State School Boards Association members, motivated by fears of widespread layoffs, have expressed the desire to reopen contacts for longer-term savings. While federal stimulus funds offer a short-term reprieve, school boards still must seize any opportunity to improve the way school districts across the state function. Once the stimulus money runs out, it's gone.

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