Duncan's First Rule of Holes: "When You're in One, Dig Faster"
I'm a simple guy. I admit it. Maybe that's why I'm so fond of the first rule of holes. You know: "When you're in one, stop digging." But that's not the way our earnest Secretary of Education likes to do things.
Scott Pattison, the executive director of the National Association of State Budget Officers, says, "There are so many issues that go way beyond the current downturn...This is an awful time for states fiscally, but they're even more worried about 2011, 2012, 2013, 2014." Lydia Ramos, spokeswoman for L.A. Unified, says, "You've got this herculean task to deal with [the 2011-2012] deficit," and, "if there's a way that you can lessen the blow for next year we feel like it would be responsible to try." This summer, the Center on Budget and Policy Priorities estimated that states are already looking at 2012 shortfalls in excess of $100 billion. Simple version: things are going to get worse for districts before they get better. That would suggest a prudent focus on using 2010-2011 to prepare for even rougher waters ahead. That's why the New York Times reported yesterday that districts, which had pleaded so desperately for bailout dollars, are now suddenly indicating they'd like to squirrel them away for next year.
Then you've got our Secretary of Education, who said on a conference call last week that, "Today's historic vote [to pass Edujobs] means school officials won't need to make those tough calls." He said, "This money is intended to support jobs in the 2010-11 school year... so we have a huge sense of urgency to get this money out the door right away."
Associated Press reporter Donna Blankenship had the temerity to ask: "[What] about the next school year after this one? What are we planning to do in 2011-12 if schools still need money for teachers' salaries?" Duncan told her: "Well, we're focused right now, Donna, on this school year...We're hopeful we'll be in a much better spot next year." Indeed, Duncan termed mailing $10 billion borrowed bucks to the states "a real, real act of courage."
There are two problems with Duncan's analysis. One, things aren't going to be better next year. In suggesting they will be, Duncan was either disingenuous or uninformed. Property tax valuations, which account for about a third of school spending, tend to lag property values by three years--which means we're still on the front end of a slide that's got several years to run. And, as the authors of a recent Rockefeller Institute report note, "Even if overall economic conditions continue to improve throughout 2010, fiscal recovery for the states historically lags behind a national economic turnaround and can be expected to do so in the aftermath of the recent recession."
Second, bailouts are making matters worse by making it more difficult for states and districts to rein in spending. Of the 34 states that had passed budgets by mid-June of this year, 23 had factored in federal "rescue" dollars. This means that instead of squeezing benefits, trimming formulas, or otherwise taking this opportunity to get their affairs in order, states were leaning on their members of Congress to funnel more borrowed bucks their way.
New Jersey Governor Chris Christie's spokesman observed to the NYT that this behavior makes the federal aid "a real double-edged sword. This money will not be there next year, and we're not going to get back up to the funding that they had previously been used to."