Public Schools in Missouri and Kansas Could Lose $76.5 Million If Congress Jumps Over the Fiscal Cliff

The fiscal cliff is looming over public education nationwide, and local districts may lose millions of dollars in federal school funding. Image credit: mrincredible / 123RF Stock Photo

Even before the votes were counted last Tuesday, pundits began talking about what would come next. Although there was the expected disagreement about politics, most agreed that as soon as elections were over our government representatives old and new would immediately turn their attention to the looming fiscal cliff. If the U.S. Congress fails to find a compromise and does jump off that fiscal cliff in the first week of the New Year, then the consequences both for the economy in general and public education in specific will be severe.

Public school administrators on the state and local levels have known about the pending budget crisis since last year, when a bipartisan committee failed to reach agreement about how to reduce the national deficit. Because of that failure, automatic federal spending cuts will drop into place in the first week of 2013 unless Congress is able to agree on a compromise. As part of those cuts, federal funding for public education in Kansas and Missouri would decrease by at least $71.5 million.

So important is this issue that the fiscal cliff was the topic of Barack Obama’s first speech after being re-elected as President. On Friday, he told the U.S. people, “I expect to find willing partners in both parties, so let’s get to work,” adding “I’m open to compromise.”

In his own remarks to the press that day, John Boehner — Speaker of the U.S. House of Representatives — said he and Obama “think we both understand that trying to find a way to avert the fiscal cliff is important for our country. And I’m hopeful that productive discussions can begin soon so that we can forge an agreement that can pass the Congress.”

Whether other members of Congress will be open to compromise, however, is uncertain. During an interview Friday, Mitch McConnell — Republican leader of the U.S. House — told a Wall Street Journal reporter, “I am not willing to raise taxes to turn off the sequester. Period.” And Republican congressional leaders are scheduled to meet with President Obama next Friday to discuss whether they are willing to — as McConnell put it in his interview — engage in “Thelma and Louise economics.”

Because the federal government has already allocated funds to public schools for the current academic year, any cuts would not affect education until next fall. No one knows exactly how much those spending cuts would be. However, Tom Harkin — chairman of the U.S. Senate subcommittee that appropriates federal funds for education — last summer released a report estimating the fiscal impact on the states.

In Kansas, Harkin’s report estimates the loss of more than 250 education jobs and almost 500 in Missouri. In both states, most cuts would be to services for the most vulnerable, including disadvantaged and special education students as well as English languages learners. Federal spending cuts in both states would be about 8 percent, which means that Kansas would lose about $23.7 million, and Missouri would lose about $52.8 million.

Such cuts would be easier for districts to absorb in a healthy economy. However, since the start of the Great Recession, state tax revenues have been down, so Kansas and Missouri have not been able to fully finance their school funding formulas. And the situation in Kansas is exacerbated by the fact that the state legislature last session cut income taxes, hoping that move would attract business to the state. However, last week the state’s Consensus Estimating Group released a report predicting a $5.2 million revenue decrease next year.

To read more about how sequestration of federal funds could affect students and districts in the Kansas City metropolitan area, click HERE.

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