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Fiscal Cliff: How Are Impact-Aid Districts Preparing for Education Cuts?

Almost everyone in education is worried about the fiscal cliff—including the 8.2 percent across-the-board cut to school districts—but no program is in as precarious a position as Impact Aid, the one major K-12 program that would be cut immediately come January if Congress and the administration aren't able to work out a long-term deal on the deficit.

Impact Aid districts get extra money from the federal government to make up for lost tax revenue due to federal land, or the cost of educating additional students that wouldn't be in the district if it weren't for the feds (such as the children of military personnel or students from a Native American reservation). The program is currently funded at roughly $1.27 billion.

Other programs districts depend on, such as Title I and special education, are funded in advance, so districts wouldn't feel the full effect of the cuts until the next school year kicks off. That gives districts time to plan—and it gives lawmakers more time to come up with a compromise.

So are impact aid districts likely to see massive layoffs on Jan. 2, if there isn't a deal? Most likely not, said John Forkenbrock, the executive director of the National Association of Federally Impacted Schools. Most schools began preparing for the cuts early.

In fact, more than a third of 334 schools surveyed by NAFIS and the American in August had built the cuts into their budgets for the 2012-13 school year. Sixty-four percent delayed maintenance or technology purchases, 54 percent eliminated non-instructional staff positions, 46 percent boosted class size, 44 percent--MB eliminated instructional staff, and 35 percent reduced professional development.

Other districts did not build in the cuts because they were not aware they were coming, or couldn't afford to make reductions without laying off staff. But others simply spent conservatively, or have reserve funds to draw on.

So that does mean the cuts are no big deal? Not all, says Forkenbrock.

"It's tough, but fortunately we got the word out early," he said. "Most of the schools really were able to budget for this. That doesn't mean that it's not going to have an impact, it is going to be really tough."

Forkenbrock noted that many of the districts in the survey are already coping with needy students. Of the roughly 1,200 schools in the program, more than 45 percent are half minority or more. Sixty-four percent have an English-language learner population of 30 percent or more. And 87 percent have a free and reduced-price lunch enrollment of 30 percent or more.

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