State Department of Education Budget Cuts: Who Would Feel Them?

When the economy gets bad enough—like now—budget “what ifs” almost always include drastic reduction scenarios. For instance, state agencies are being asked to prepare spending plans 10% lower than current year levels. In an earlier life at the State Department of Education (SDE), I had a hand in preparing a couple of these crisis plans.

Interestingly, almost the entire SDE budget is comprised of pass through funding for local school districts, so any significant reductions pretty much would have to be accomplished by cutting education aid to towns.

Here’s why. The SDE budget for 2008-09—prior to the Governor’s rescissions—was about $2.67 billion. A 10% reduction would be nearly $270 million. To see where the $270 million could be taken, we need to look a little closer at how the $2.67 billion is allotted.

In approximate figures, payments to local governments makes up $2.4 billion of the SDE budget—89%. ECS accounts for just under $1.9 billion of that figure; categorical and targeted grant programs total $500 million. Another $80 million or so is passed through to non-governmental education agencies such as Regional Education Service Centers (RESCs), Charter Schools, the American School for the Deaf and others—leaving under $200 million that stays with the SDE.

Those funds are used primarily to operate the CT Technical High School (CTHS) system—20 schools and satellites, and more than 10,000 students. The exact breakdown of CTHS share of the SDE budget is not spelled out in the state budget summary, but I believe about $140 million of dollars that remain with SDE go to operate the Technical High Schools.

To keep it simple, about $2.4 billion goes to towns for education, and about $270 million goes to the CTHS, other education agencies, and the Department’s leadership, administration, and similar activities.

Since $270 million happens to be 10% of the SDE budget and the amount not paid directly to towns for education, the only way to cut the SDE budget by 10% without cutting town aid would be to shut down the Tech HS system, eliminate all grants and aid to education agencies other than towns, and close the department. Of course that makes no sense, but even if it were possible, those 10,000 technical high school students currently paid for by the state would be back in their home districts—increasing local costs accordingly.

On the other hand, if the reduction were distributed in such a way that SDE operations, and grants to non-governmental education agencies took a 10% hit—as difficult as that would be—less than $30 million would be saved. Which means, of course, that the remaining $240 million needed to reach the targeted reduction level could only come from grants to towns. In ECS aid, 10% would be $190 million alone. Of course, other grants to towns would see cuts as well, unless ECS were to take a cut larger than 10%.

Not a pretty picture any way you look at it. But people need to understand that reductions of this magnitude can really only come from one place in the SDE budget. You can’t fault the State Board of Education for allocating such a large share of the cut a 10% budget reduction would bring to the ECS grant. There really would be no alternative. Hopefully, it won’t come to that.

For related news stories see the Journal Inquirer and the Hartford Courant.