2020 Capitol Report - Steep Cuts Projected for State Education Agencies

May 27, 2020

Steep Cuts Projected for State Education Agencies

Highlights

$1.3 billion cut to Quality Basic Education formula outlined in Senate’s preliminary fiscal year 2021 budget

State funding for all education programs set to be sliced by 14 percent, including pre-kindergarten.

No discussion of additional costs districts may face due to the pandemic.

Senators heard from state education agency heads about anticipated cuts of 14 percent to the agencies’ fiscal year 2021 (FY 2021) budgets at the Senate Education Appropriations Committee meeting on Tuesday, May 26. The cuts were requested by Rep. Terry England (R-Auburn), chair of the House Appropriations Committee, Sen. Blake Tillery (R-Vidalia), chair of the Senate Appropriations Committee, and Kelly Pharr, director of the Governor’s Office of Planning and Budget, in the wake of a large decline in state revenues due to the COVID-19 pandemic. The biggest cut is to the state’s K-12 funding formula, the Quality Basic Education (QBE) formula, and no program is spared. Committee members will continue to review agencies’ preliminary budget submissions and may revise them.

As the meeting concluded, Sen. Ellis Black (R-Valdosta), the committee chair, said that some education programs might see smaller reductions while other programs may undergo larger cuts to achieve the goal of a 14 percent overall reduction in spending. He also expressed hope that updated state revenue numbers expected in early June may prevent what he described as “draconian” cuts and said a bill to reduce legislators’ salaries has been drafted.

Now is the time for PAGE members to contact your state senators and share concerns and ideas about state funding for public schools. More information about taking action is below. The PAGE legislative team is also in communication with state and federal lawmakers to address the critical funding needs of Georgia's public schools.

All committee members in attendance wore masks in the hearing as did participating agency heads. Several committee members participated from their districts by watching the meeting online and submitting questions to Black. Advocates, including the PAGE legislative team, viewed Tuesday’s meeting through the Senate’s website. Video of the committee meeting is available HERE .

$1.3 Billion Cut Projected for QBE

Rusk Roam, the chief financial officer for the Georgia Department of Education (GaDOE), reported that $1.3 billion will be cut from the QBE if lawmakers approve the 14 percent cut for FY 2021. The QBE is the state’s largest source of funding for K-12 schools and supports district core operations. The QBE Equalization program is slated to be cut by $97 million. It provides supplemental funds to districts with low property wealth and limited ability to raise local revenue. Districts rely on state dollars for about 53 percent of their funding on average. Twenty-five districts receive 70 percent or more of their revenue from the state.

Under their charter or strategic waiver contracts, districts have legal flexibility to implement cuts passed to them by the state as districts determine what is necessary and appropriate for their local circumstances. During the Great Recession, when the QBE was cut by $1 billion annually for five consecutive years, districts coped by cutting instructional days and furloughing teachers, raising class sizes, eliminating positions, and reducing or eliminating art, music and other elective classes. Many of these strategies resulted in pay cuts for teachers. Personnel costs make up about 80 percent of districts' budgets.

The anticipated total cut for GaDOE is about $1.5 billion, which includes the QBE cut. Senators did not discuss possible additional costs that districts may face due to the pandemic.

4,000 Pre-Kindergarten Slots at Risk

Amy Jacobs, commissioner of the Department of Early Care and Learning (DECAL), walked senators through proposed cuts to that agency, including Georgia’s lottery-funded pre-K program. Under DECAL’s proposed budget, a 14 percent cut to the pre-k program amounts to a loss of $53 million in FY 2021. If enacted, the cut would result in significant changes to the program, including:

Eliminating 4,000 student slots, lowering the number of participating students from 84,000 to 80,000.

Reducing 13 instructional days from the pre-k school calendar, cutting it from 180 to 167 days.

Cutting the number of teacher planning days to four from 10.

Eliminating funding for the pre-k summer transition program for rising pre-k and kindergarten students who need extra support.

Pre-k teacher salaries would drop by 10 percent as a result of these reductions.

Jacobs noted that lottery revenue has not dropped as significantly as tax revenues, raising the possibility that a 14 percent cut to the pre-k program may be unnecessary. She also highlighted the lottery reserve fund, which has about $1 billion and could be tapped to cover costs. Jacobs said that DECAL has submitted alternative budget proposals should lawmakers pursue a smaller cut.

New Strategy to Reduce Teacher Costs

During the committee’s discussion of DECAL’s proposed budget, Black raised the possibility of shrinking teacher salaries instead of reducing instructional days as a means of cutting state funds. When questioning Jacobs he asked, “If we follow through on this, they (teachers) are going to get less money and children are going to get less education. The question is, how dedicated are these teachers? Are they willing to make that much of a sacrifice so these kids can get an education?” Jacobs responded, “I can’t imagine a pre-kindergarten teacher or any teacher for that matter would think favorably to that if they are required to work the same number of days but receive less pay.”

Like Black, Sen. Jesse Stone (R-Waynesboro) voiced support for salary reductions and expressed concern about the impact of lost instructional time on students. In response, former teacher Sen. John Wilkinson (R-Toccoa) flagged the importance of treating all state employees consistently. Wilkinson raised the example of whether Department of Transportation employees or prison guards would also be asked to work the same number of days for less money. The committee did not make a determination to follow either approach, instead expressing hope that robust lottery revenue and reserves would preclude proposed large cuts.

Cuts Touch Other Education Agencies

Committee members also heard from Joy Hawkins of the Governor’s Office of Student Achievement (GOSA) and Matt Arthur of the Georgia Professional Standards Commission (GaPSC). Already in the process of downsizing, GOSA will eliminate several positions and cut $1.8 million for literacy grants. Arthur reported that the GaPSC will rely on furlough days, elimination of two staff positions and overtime pay, and reduction of office space to absorb the 14 percent cuts. He noted that the time to process educator certification and renewals as well as ethics cases is likely to increase.

Buster Evans of the Teacher Retirement System (TRS) reported a small programmatic reduction in the amount of direct state funding TRS receives for FY 2021. He also said that, despite current market volatility, TRS is one percent above the pension fund’s level at the start of FY 2020. The fixed portion of TRS assets has experienced a return of more than nine percent, though the return on the equity component has dropped by eight percent. Evans stated that possible negative impacts on TRS due to the pandemic will not be reflected in the employer contribution rate until FY 2023.

Next Steps

The committee will continue gathering information and consider revisions to the proposed budgets for education agencies. State revenue numbers for May will be released in early June, and legislators are hopeful they will offer more clarity on future revenues and the scope of possible cuts. Committee members will vote on a final proposed education budget for FY 2021, which will then move to the full Senate Appropriations Committee. Committees cannot vote on legislation, including the budget, until the General Assembly reconvenes in June. Once approved by the Senate, the proposed FY 2021 budget will return to the House for possible revision and approval. Lawmakers must pass the FY 2021 budget by June 30.

Member Action

The COVID-19 pandemic has a profound impact on the state budget and funding for K-12 education. Georgia is required to balance its budget and is prevented from deficit spending. Lawmakers may consider methods to raise additional state revenue to partially mitigate painful cuts during the remainder of the 2020 legislature or in subsequent sessions. Some are exploring the possibility of increasing the cigarette tax , which would generate new revenue and reduce teen smoking .

PAGE is committed to protecting educator pay and preserving instructional time for students. The legislative team is communicating with legislators on these issues as well as larger budget concerns. PAGE has also engaged all members of Georgia's congressional delegation to garner support for additional federal funding for Georgia's public schools. A copy of the letter sent to Sen. David Perdue (R) is available here .

Now is the time to reach out to your state senator and share concerns and suggestions about the FY 2021 budget, including instructional days and educator salaries. As always, please remember to use your personal (not school) email or phone. The most effective messages acknowledge the financial crisis, draw on your experience supporting students, and encourage lawmakers to work toward solutions that soften impacts on students and educators. Enter your home address to lookup your elected officials’ contact information HERE .

Claire Suggs

Senior Education Policy Analyst

csuggs @pageinc.org