Federal Budget Notes - Making Sense of the Federal Budget

June 5, 2017 • Volume #2: On Leadership

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For many in public K-12 education, the budget President Trump released in May—calling for a 13.5 percent cut in education funding—created a sense of panic. For the readers of this newsletter, who understand the strategic importance of investing in school leadership in an era of tightening budgets, it is important to understand what this budget is—and is not—and where federal policy is and is likely to be going forward.

At the outset, it is important to recognize that Congress makes the budget, not the President.  The President is required to start the budget process with a recommendation to Congress, and it is this step in the process that seems to garner most of the press coverage. However, with a few notable exceptions, Congress often sets the majority of budget priorities.  This year’s budget was fairly typical in terms of the President’s influence.

In March, Congress passed a temporary spending bill that authorized spending through September 30, 2017. This stopgap funding measure is what will fund schools and districts for the 2017-2018 school year. The Trump administration had asked for significant cuts in the short-term bill, but members of Congress from both parties did not oblige. The bill they passed, and that the President signed, reduced total discretionary and mandatory spending for education by just $60 million— a cut of less than one-tenth of one percent from the prior year’s $71.66 billion budget.

In May the President released a budget proposal to cover federal spending from October 1, 2017 through September 30, 2018. Again, press coverage focused on the significant cuts represented by the President’s recommended budget, but the reality is that it is Congress who holds the power of the purse and who will ultimately set spending levels and priorities.

Taking a closer look at the recently-passed temporary budget is useful in forecasting the likely path forward for next year’s budget. There are three major formula fund categories that traditionally account for the lion’s share of federal education funding– Title I, the Individuals with Disabilities Education Act (IDEA), and Title II. Below is a quick snapshot of what transpired in these three areas within the short-term budget:

  1. Title I: This program provides extra money for schools with low-income students. The recently passed budget authorized $15.5 billion for the 2017-18 school year, a $550 million uptick or 3.7 percent increase from the prior year.
  2. The Individuals with Disabilities Education Act: IDEA, the federal special education law, provides funding to schools to comply with the law’s mandates. For the 2017-2018 school year, funding levels saw a small increase to $12 billion from $11.9 billion.
  3. Title II: This program primarily funds professional development and other activities to improve the effectiveness of teachers and principals. Title II funding was $2.3 billion for the 2016-2017 school year. The administration’s original proposal had threatened to cut this funding in half, but the final cut was significantly smaller at $200 million, representing an 8.9 percent decrease for the 2017-2018 school year.

Congress will now consider the President’s request for fiscal year 2018, which called for significant reductions in a number of areas and a major investment in school choice initiatives. Among the largest proposed cuts in the President’s newly released budget is a complete zeroing out of Title II funds. However shocking the threat of a more than $2 billion cut to Title II is to most education leaders, it is important to remember that the President proposed cutting in half Title II spending in the short-term spending measure, but when all was said and done in the Congress, a far more modest 8.9 percent reduction was the eventual outcome.

More broadly, the President’s proposed overall cuts should be taken with the appropriate degree of historical perspective.  As Education Week’s Andrew Ujifusa recently observed, the proposed 2017-2018 cuts represent the largest proposed reduction to federal education spending “since President Ronald Reagan sought a 35.7 percent cut to the department in his proposed 1983 budget.” However, Ujifusa continued, “Congress ultimately increased the department’s budget for fiscal 1983.” If the current political climate is any indication, Congress will once again chart a path for the federal education budget that stays truer to historical spending patterns than the map laid out by the administration.  There will be many twists and turns in that process and a clear picture of future spending levels is likely to emerge closer to October 1 of this year.

What remains clear is that districts will need to continue to prioritize improvement strategies that provide the greatest school-wide improvement at the lowest cost.  Many of our readers see investments in school leadership development as a prime low-cost, high-impact strategy.  While some form of Title II reduction seems likely, there is actually good news on the school-leadership front to be found within the recent budget discussions.  The rising awareness of school leadership as a strategic lever for raising student achievement is echoed in the increased focus on principals and school leaders across multiple competitive grant programs, including the Education Innovation and Research (EIR) grant program and the Supporting Effective Educator Development (SEED) grant program.  In some cases, these funds were limited solely to teachers in prior years, so this addition significantly opens up support for and study of leadership interventions and their impact. Other areas, that were formally restricted in what and how they could fund specific aspects of education, are increasingly becoming more flexible in their application, leaving the decisions at the state, district or school level.  In short, administrators who wish to support student growth by strengthening school leadership will likely be able to continue to do so.

Editor’s Note: Shortly after the publication of this piece, during a hearing on the Trump administration’s proposed Fiscal Year 2018 education budget, Missouri Senator Roy Blunt (R), Chairman of the Senate Subcommittee on Labor, Health and Human Services, Education and Related Agencies, told Secretary of Education Betsy DeVos the following:

“This is a difficult budget request to defend. I think it’s likely that the kinds of cuts that are proposed in this budget will not occur, so we need to fully understand your priorities and why they are your priorities.”