Overview of Governor’s FY 2010 Budget Proposal for EDUCATION1
In the Governor’s proposed Fiscal Year (FY) 2010 budget, education does not escape the cuts occurring throughout state agencies in response to declining revenues. These cuts will surely pose challenges for public service providers, such as teachers and administrators, as enrollment and costs continue to rise. The cuts also raise important policy questions—chief among them being, how far are Georgians willing to cut public services? For education, in particular, here are a few policy questions to consider when reading the budget overviews on the following pages:
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How will cuts to K-12 education improve our education standing among the states? How will these cuts improve our comparisons to international competitors? How will a lower state investment in K-12 education affect property taxes? How will communities of different means balance theses cuts? Will some communities be able to offset the cuts with local resources, while other communities will not? What are the implications for student achievement if this is the case? Will the cuts to the Board of Regents cause an increase in tuition or fees at colleges and universities? If so, how will those increased costs affect access for low and moderate income students, especially given that Georgia has no state need-based financial aid? With unemployment reaching new heights and 46 percent of adults already lacking any post-secondary education, how will cuts to adult literacy and technical education affect Georgians transitioning to new jobs or seeking skills advancement? School systems, adult education courses, and colleges will likely balance some of the cuts through increased class sizes. How will these increased class sizes affect student achievement, and will they be temporary given the uncertain fiscal health of the state over the next few years? What are the implications for public health if schools do not have school nurses?
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All budget figures are taken from: The Governor’s Budget Report: Fiscal Year 2010. http://www.opb.state.ga.us/budget-information/budget-publications/govenor's-budget-recommendations.aspx.
Department of Education
Georgia will spend almost $8 billion in state funds to educate 1.6 million K-12 students in FY 2010, based on the Governor’s proposed budget. The proposed level of spending is less than the original FY 2009 budget and even the FY 2008 spending level. Meaning, the state will be educating more students in FY 2010, but with fewer state dollars than two years prior. In the proposal, the Governor makes $250 million in new cuts compared to FY 2009. Those new cuts are in addition to the existing formula funding reduction, for a total cut of $346 million, or 4.2 percent of the Department’s budget.
FY 2010 Summary of State General Funds Total Department Cut = $250 million (3%) Total Cut + Existing QBE Cut = $346 million (4.2%) Major increase: • Funds for QBE enrollment growth ($66.5 million) Major cuts include: • Cut to QBE ($275 million) • Reduction in Equalization Grants ($112 million) • Elimination of state funding for school nurses ($30 million) • Redirection of funding for graduation coaches, teacher gift cards, Regional Education Service Agencies, and Education Technology Training Centers to QBE • Elimination of funding for National Board Certification ($12 million)
The majority of the cut can be found in the state’s funding formula—Quality Basic Education (QBE)—which receives a $275 million reduction for FY 2010. Since 2003, the QBE formula has consistently received “temporary” annual reductions, totally $1.5 billion over the 6 years. While the QBE cuts were slated to decline in FY 2009, the budget shortfall has reversed that direction and caused the FY 2010 cut to be even more severe than prior years.
In addition to the cut in formula funding, several programs outside of the QBE formula have been reduced, eliminated, or shifted to the QBE formula. Equalization Grants, which provide additional funding to school systems with low property tax wealth, received a $112 million cut. With a cut of $30 million, state funding for school nurses was completely eliminated. Likewise, the National Board Certification program ($12.3 million), which offers a 10 percent salary increase for Board Certified teachers, was eliminated. Graduation coaches ($49 million) and teacher gift cards ($11 million) were transferred to operate within the QBE formula. Funds for Education Technology Training Centers ($2.8 million) and Regional Education Service Agencies ($12.5 million) were redirected to QBE. The major addition in the Governor’s education budget is $66.5 million to the QBE formula for a 0.23 percent increase in student enrollment and training and experience for teachers.
Cutting or Funding the Homeowners Tax Relief Grant…More Education Cuts? Both the Amended FY 2009 and FY 2010 proposed budgets remove $428 million in funds for the Homeowners Tax Relief Grant (HTRG), a state-funded reimbursement to cities, counties, and schools for property tax reductions. In recent years, about $240 million of the HTRG funding went to school systems. For FY 2009, local officials already sent property tax bills with the HTRG included, but will not receive reimbursements, according to the Governor’s proposed budget. Local officials will either send revised property tax bills asking homeowners for the additional $240 million, or schools will have to make additional cuts. For FY 2010, schools will either have to raise property taxes by $240 million, reduce services by that amount, or some combination of the two. Legislators could disagree with the Governor’s proposal and fund the HTRG. If legislators decide to fund the HTRG, though, they must cut $428 million from the state budget. With K-12 education comprising 44 percent of state general fund appropriations, it is unlikely that education would be able to avoid the additional cuts caused by funding the HTRG.
Georgia Budget and Policy Institute
January 2009
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Bright from the Start: Department of Early Care and Learning
The Department of Early Care and Learning, which runs Georgia’s Pre-K program, escapes the cuts borne by other agencies. In the Governor’s proposal, 3,000 Pre-K slots are added to the program for a total of 82,000 slots in FY 2010. The Pre-K program relies almost exclusively on lottery funds, which have continued to grow in spite of the economic downturn. An additional $12.7 million in lottery funds will be added to the Department’s budget for FY 2010, bringing the budget total to $354 million in state funds.
Board of Regents
For FY 2010, the Governor’s budget includes $97 million in state general fund reductions to the University System, totaling a 4.3 percent reduction. These changes are in addition to the $273 million in “sustained budget reductions” the Board of Regents has sustained in recent years. Combining the new $97 million in cuts with the existing $273 million formula reduction totals a $370 million, or 16.2 percent, state general funds cut for colleges and universities. Among programs, Teaching, Public Service Initiatives, and the Research Consortium have the largest cuts. Similar to the Department of Education, the Board of Regents “Teaching” program is the formula driven funding mechanism. While the proposal includes a $110 million increase for enrollment and capacity growth, it also contains a $457 million cut to the formula – a cut that totals 37 percent of the state’s portion of the formula.
FY 2010 Summary of State General Funds Total Department Cut = $97 million (4.3%) Total Cut + Existing Formula Cut = $370 million (16.2%) Major increase: • Formula funding for increased enrollment and square footage ($110 million) Major cuts include: • Sustained budget reduction to the funding formula ($457 million) • Elimination of 115 vacant positions and 9 filled positions • Reduction in Public Service/Special Funding Initiatives ($14 million) • Reduction in Research Consortium funding ($9 million) • Cut to public libraries for grants and operations ($3.4 million)
Public Service Initiatives and the Research Consortium likewise have an almost 30 percent cut in state general funds. Funding for numerous projects was eliminated completely, including several leadership initiatives, Eminent Scholars Endowment Trust Fund, Student Education Enrichment Program, Georgia Environmental Partnership, and Traditional Industries Program, among others. FY 2010 Reductions to Teaching Formula
New formula reduction Existing formula reduction Total formula reduction $184 million + $273 million $457 million
Georgia Budget and Policy Institute
January 2009
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Technical College System of Georgia
The overall reduction to the Technical College System is $27.9 million in state funds; however, $9.8 million of that amount is a reduced OPEB contribution. Thus, the reductions affecting services total $18.1 million. Each program within the Technical College System experiences a cut of more than 6 percent in the Governor’s FY 2010 proposal: • 6.9 percent for Technical Education, • 11.0 percent for Adult Literacy, • 12.8 percent for Economic Development, • 14.6 percent for Administration. For Adult Literacy, the cuts will result in the elimination of over 50 positions, a majority of which are faculty, and the conversion of 23 full-time faculty into part-time.2 These cuts are expected to cause an enrollment reduction of more than 5 percent.
FY 2010 Summary of State General Funds Total Department Cut = $28 million (7.5%) Total Cut Without OPEB Cut = $18 million Major increase: • Formula funding increase for enrollment and square footage growth ($17.6 million) Major cuts include: • Reduction in technical college personnel and operating expenses ($28.6 million) • Savings from administrative mergers of 13 colleges ($3.5 million) • Remove funding for Career Academies ($2 million) • Reduction in Quick Start ($1.8 million) • Reduction in adult literacy grants ($1.5 million)
In both Adult Literacy and Technical Education, the proposed reductions will occur at the same time need and demand for services increases, as more and more Georgians seek education and skills advancement due to job loss and transition. The technical colleges have already begun to see evidence of this, with November reports suggesting a seven to eight percent enrollment increase for Fall 2008 compared to declines in enrollment in recent years.3
If this above normal student growth continues, it will occur at the same time as funding decreases by 7.5 percent. The System will have less state funds to serve more people, bringing consequences such as larger teacher to student ratios that can affect successful completion.
The Need for Adult Education Before the Recession In Georgia, about 950,000 adults aged 18 to 64 lacked a high school diploma or GED in 2007, according to the Census Bureau’s American Community Survey. Another 1.9 million adults had a high school diploma or GED, but no post-secondary education. Combined, that totals 2.8 million adult Georgians – 46 percent of adults aged 18 to 64 – who lacked any post-secondary education in 2007. Prior to this recession, Georgia already made a very weak investment towards adult literacy education when compared to the amount of need and the efforts of other states. The Governor’s proposed budget takes Georgia in the wrong direction for low-income working families that require additional literacy education and skills advancement, by further decreasing the investment in adult education. (For more data and recommendations on adult education, see the GBPI report Strengthening the Foundation: Investments in the Adult Workforce Build a More Prosperous Georgia.)
Data from Technical College System of Georgia. Received January 21, 2009. State Board of the Technical College System of Georgia. Minutes: November 6, 2008. http://www.dtae.org/boardweb/dec08/SB_Minutes_Draft110608.doc.
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Georgia Budget and Policy Institute
January 2009
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