Deficit announcement makes budget cuts inevitable
Last week’s bombshell announcement that the state ended the previous year with a $108 million deficit is about to bring more pain to suffering state agencies. This time, the victim list could include public education’s Minimum Foundation Program.
A requirement of state law makes further budget cuts this year inevitable, according to LFT Legislative Director Alison Ocmand. The law requires any deficit from last year to be balanced by the end of this fiscal year on June 30, 2011.
Soon, the deficit will be reported to the Joint Legislative Committee on the Budget. That meeting will trigger Governor Bobby Jindal’s authority to make one of those dreaded mid-year budget cuts.
In each of the past two years, the Jindal administration has cut the budget at mid-year. The brunt of those cuts has fallen on higher education and health care. To date, our colleges and universities have sacrificed some $270 million to the budget axe.
Higher education is already bracing for another cut. Officials say that as many as eight institutions could be closed if the direst of predictions prove true.
Thus far, K-12’s MFP has been spared from cuts. That doesn’t mean public education hasn’t been hurt, however. The failure of the legislature and Board of Elementary and Secondary Education to increase the MFP by the traditional 2.75% in each of the past two years has brought pain to local school boards. While state funding stood still, retirement and insurance costs rose significantly, along with other costs of operating schools.
On top of that, Jindal vetoed funds to pay the supplements for nationally certified educators, and cut funding for transportation of private and religious school students. Those burdens must be picked up by local school boards.
But with other budgets cut to the bone and beyond, how safe is the $3.3 billion MFP? Public education’s main funding source does have constitutional protection, but it is not completely immune from cuts.
If Gov. Jindal decides it is necessary, he has the authority to reduce the MFP by one percent on his signature alone, as long as the reduction does not affect instructional spending. Gov. Kathleen Blanco imposed the one percent reduction in the aftermath of Hurricanes Katrina and Rita, although the money was ultimately restored within the school year.
Greater cuts to the MFP are possible, provided the governor wins the approval of two-thirds of both the Senate and House of Representatives. In the past, winning such approval was considered implausible. But as long as the governor and some legislative leaders maintain their pledge not to increase state revenues, the specter of major cuts to the MFP remains.
Can EduJobs fill the budget hole?
One bright spot for public education is the passage of the Education Jobs Fund by the U.S. Congress. The $10 billion appropriation is part of the federal government’s effort to save teacher and school employee jobs threatened by the recent recession. Louisiana’s share of the fund amounts to more than $144 million.
According to LFT Legislative Director Alison Ocmand, that money will soon be filtered down to local school districts, linked to each system’s share of the Minimum Foundation Program. This chart shows each school system’s share of the funds.
“I am sure that the Jindal administration will be looking closely at the Education Jobs Funds,” says Ocmand. “The administration may see this increase in funding from the federal government as a way to cushion any proposed cut to K-12.”
Under rules stated in this guide, the money can be used to pay the salaries, benefits and expenses of school level educators during the 2010-2011 school year. Specifically included in the bill are teachers, , principals, assistant principals, academic coaches, in-service teacher trainers, classroom aides, counselors, librarians, secretaries, social workers, psychologists, interpreters, physical therapists, speech therapists, occupational therapists, information technology personnel, nurses, athletic coaches, security officers, custodians, maintenance workers, bus drivers, and cafeteria workers.
Administrative expenses, including the salaries and benefits of district-level administrators, cannot be paid from the fund.