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What Happens to Education Spending if the Budget Stays in a Holding Pattern

Right now, the federal budget is flying in circles. It's operating on a "continuing resolution" through April 28 that essentially holds fiscal year 2017 spending levels at their fiscal 2016 amounts. Trump recently released a very broad outline of his spending priorities for fiscal 2018 that includes a $54 billion cut from domestic agencies—fiscal 2018 starts in October—although we still don't know how that 10 percent cut in non-defense discretionary spending would specifically impact the U.S. Department of Education.

But where does that leave fiscal 2017 in terms of education spending? And what happens if Congress decides to apply that continuing resolution to the rest of fiscal 2017 through September? With each passing day, that looks increasingly likely.

Below, we examine how a few programs in the Every Students Succeeds Act would be affected if Congress approves a continuing resolution for the rest of the fiscal 2017. 

Here's one important thing to keep in mind: Although a continuing resolution would keep funding at current levels, Congress can adjust what's in such a resolution, through what are called "anomalies" in federal budget lingo. In general, it's very likely that lawmakers will attempt to square what's in the continuing resolution with what's in ESSA. But what that process looks like, and how closely any such resolution ultimately matches ESSA in terms of funding levels, remains to be seen. 

"The most difficult part is then deciding the numbers," said Joel Packer, the former executive director of the Committee for Education Funding, who added that overall funding levels for the U.S. Department of Education could also be in play during any continuing resolution. There are a lot of moving parts in the process, Packer stressed.

Title I

Let's first look at Title I and the Obama-era School Improvement Grants. SIG is no longer authorized under ESSA. However, the law does require states to set aside 7 percent of their Title I funding for school improvement activities. That's an increase from the 4 percent optional state set-aside under the previous version of federal K-12 law. In budget terms, the money for SIG is effectively migrating over to that increased Title I set-aside at the state level. 

But since the continuing resolution as it stands now would keep Title I funding flat, it could effectively amount to a cut in Title I funding that's available for districts. Would Congress decide to make up this funding to districts? If so, by how much? We won't have an answer until we know what's in any continuing resolution.

It's also important to note that the vast majority of that Title I set-aside money ultimately will end up going to districts anyway for school improvement purposes. States will have discretion over how that money goes out and set the priorities for how it gets spent. So it's not as if the states will simply swim in that cash and keep it from districts. Still, that's money that won't be going into the typical Title I formulas districts count on.

The Big Block Grant

Title IV (or what we like to call "the big block grant") won't exist if the current continuing resolution is rolled over. That's because even though it's authorized in the Every Student Succeeds Act, there's no funding for it in the current continuing resolution. Congress would have to create an adjustment in the resolution—the "anomaly" referred to above—in order to pay for what's in Title IV.

There's a diverse coalition of groups pushing for (and pushing for substantial funding for) the Title IV grants, which are designed to fund the well-rounded education of students, a priority in ESSA. However, in 2016 budget bills floated last summer, Congress fell far short of funding Title IV at the $1.6 billion authorized for it in ESSA—so did the Obama administration's budget proposal, for that matter. 

So if, through one of those anomalies, the continuing resolution does fund the Title IV block grant, how much will lawmakers give it? The $1 billion House lawmakers proposed? Or the $300 million the Senate wanted to provide? Something in between, or more, or less? Again, we won't know until we see the continuing resolution, assuming there is one.

New LEARN Grant

Under the resolution, the Literacy Education for All, Results for the Nation (LEARN) program in Title II that covers teacher training and prepration also doesn't get funded, DeSchryver said. LEARN was originally a bill from Sen. Patty Murray, D-Wash., that got folded into ESSA. Through competitive grants, LEARN would fund a state literacy plan, professional development for teachers in literacy skills, and programs to address specific populations of students in literacy instruction, such as English-language leraners. 

ESSA authorized $160 million for LEARN, but unless lawmakers were to tweak the resolution to fund it, LEARN wouldn't get a dime. "It doesn't exist, absent some [change] in the CR," said David DeSchryver, a senior vice president at Whiteboard Advisors.

Also, remember that the current continuing resolution lasts until April 28, so we might not know for several more weeks how the rest of fiscal 2017 will unfold. 

And what's a final catch in this whole process? Unlike in a traditional budget process that includes things like hearings, Packer said, putting "anomalies" into a continuing resolution isn't transparent.

"It's all done completely in the dark and in secret," Packer said of what changes get made to continuing resolutions.


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