Editorial: Schools face looming deficits
At this stage of the pandemic-induced financial crisis we are about to face, it’s difficult to imagine how severe the upcoming recession will be. Preliminary numbers in Vermont suggest we may have reached a record 30 percent unemployment — a truly staggering number. And because non-essential businesses were forced to close, no one can be sure how many will be able to reopen without a hitch, or how many might close or file for bankruptcy.
What we do know, however, is the short-term cost to state coffers, and the impact that will likely have on the state’s school systems.
In a story on today’s front page, we report on the early impact on state revenues and suggest how that could have a ripple effect on school budgets like that of the Addison Central School District. It’s not a pretty picture.
Faced with huge reductions in sales and gas taxes, plus decreased rooms and meals and income taxes, the state revenues are expected to be down significantly. The state’s Education Fund is already headed for a $69 million deficit this fiscal year and that’s assuming the state uses $35 million in education reserves and a $19 million surplus.
In terms of education spending, said Rep. Peter Conlon, D-Cornwall, who serves on the House Education Committee, the state may be looking at a deficit of between $100 million and $200 million in the next fiscal year out of a $1.8 billion budget. “How do you address that,” he asks, particularly in small states like Vermont that have little capacity to make up that much of a shortfall.
“If the federal government loosens the strings on the federal money, it could make a significant difference, we’d be having a different conversation,” he said, “…but we need to enter FY21 with some significant caution.”
The financial pressures on Vermont schools is just one of the trouble spots on the statewide spectrum. A shortage of state funding also means spending will be tight for the state police, staff and faculty at the state universities and colleges, and state grants to cities and towns. It’s a ripple effect that has profound impacts on the daily lives of Vermonters and, similarly, on Americans across the nation.
At the forefront of that conversation is Senate Majority Leader Mitch McConnell, R-Kentucky, who has taken the untenable position that states most severely impacted by the novel coronavirus should “go bankrupt” rather than expect federal assistance. McConnell has been skewered for making that remark, partly because he also linked the refusal of aid to what he termed mostly liberal states run by Democratic governors — Vermont, Massachusetts, Maryland, Florida, Ohio and New Jersey (and others headed by Republican governors) not withstanding. It’s as shortsighted as it is politically repugnant, but not a surprise coming from the notoriously partisan Majority Leader.
States like Vermont, and school districts across the country, will have to wait and see if McConnell, Trump and other Republicans in the Senate back off and eventually help states, cities and school districts recover from the economic hardships they all face — or whether partisan politics has so infiltrated the GOP’s mindset that they perceive preventing blue states from recovering from this pandemic is in their best interests at the polls in November.
Current studies suggest it is not. A recent Morning Consult poll reported that “74 percent of registered voters, including 84 percent of Democrats and 65 percent of Republicans, agreed that the federal government should be responsible for providing financial support to states during the coronavirus pandemic.”
Even in McConnell’s home state, the University of Kentucky is already furloughing employees and the state assembly there is cutting funding for libraries and forgoing raises for public K-12 teachers. In Louisville, Kentucky the city faces a $115 million shortfall, and the mayor says that if no solution is worked out by Oct. 1, he’ll have to consider laying off 1,000 city employees, or about 20 percent of all city workers. Extrapolate that nationwide, and it’s the kind of ripple effect — and poor thinking — that would send the nation into a depression the likes of the 1930s.
For the sake of students across the country, and for the nation’s economy, let’s hope McConnell and his fellow Republicans don’t put petty politics ahead of sound fiscal policy.
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