View a list of school districts receiving Impact Aid payments of more than $1,000,000 in FY 2012 (.xls)
All parents hope that when their kids go back to school in the fall, it will be to a stronger school that can offer better learning opportunities than were available in the previous year. But for many kids whose parents serve in the U.S. military, the prospects of that this fall are not good. The reason is a provision inserted into the Budget Control Act passed by Congress more than a year ago. That provision, insisted on by a large group of newly elected members in the House of Representatives, would make a large (about 9 percent) across-the-board cut in all federal programs on January 2, 2013.
So why, you may ask, is a provision that has not even gone into effect (and may yet be repealed or altered) already forcing changes in the budgets of some school systems? The answer is complicated but it provides a great deal of insight into the unpredictable and often destructive consequences of this legislation, which is sometimes referred to as “sequestration.”
The vast majority of money that the federal government gives to local school districts is forward funded. That means that money appropriated for the fiscal year that begins on October 1 will not be distributed until next summer, and thus will be used by local schools for the school year that will begin a year from now. But that is not the case with a program known as Impact Aid.
Impact Aid is one of the oldest federal education programs. It helps school districts that are particularly burdened by activities or commitments of the federal government. One example is school districts located on or near military installations. While there are lots of children on military bases in need of educational services from the local school system, most of those children live in families that pay little or no local taxes. Military installations, including their housing units, are not subject to local property tax; the post exchanges and commissaries charge no sales tax; and a very large percentage of the families stationed at military installations are not permanent residents of the state in which the installation is located. They therefore pay no income tax in that state.
A similar situation exists with respect to Native American children whose families live on reservations. As a result of treaties between the tribes and the government of the United States, the reservations and the property and activities within them are not subject to local, state, or federal taxation.
Impact Aid is a method of compensating local schools that bear the brunt of such situations. Altogether there are more than 1,000 Impact Aid school districts. Together they get more than $1 billion each year in federal payments. About three-quarters of that money, however, goes to the 160 most heavily burdened districts.
Sequestration lops off 9 percent of that money in the same way that it cuts all other programs. But because Impact Aid funds go out in the same year that they are appropriated, the cut to Impact Aid hits this year’s budget—not the one next year. That leaves such schools in a very awkward position. If they cut their payrolls now, reducing the teaching force and eliminating educational resources, they may find out in a few months that cuts have been reversed and that they have unnecessarily shortchanged their students. But if they keep spending at their current rate until they are sure what Congress is going to do, then they may be forced to make far deeper and more draconian cuts later in the school year.
Billy Walker, superintendent of the Randolph Field School District outside of San Antonio, Texas, recently explained the dilemma before the Senate Appropriations Committee:
I ultimately insisted that the sequester reduction be built into the budget. We’ve done our best to prepare for the cuts, and I could not in good conscience mortgage the fiscal future of our district with obligations that we would most likely not be able to sustain.
Walker said he had been forced to eliminate an elementary reading specialist; a librarian; a middle school reading specialist; high school teachers in math, science, and English; and the school’s baseball, cross country, and swimming programs. Custodians, secretaries, and other administrative personnel were also eliminated. According to the National Center for Education Statistics, the entire Randolph Field School District, kindergarten through 12th grade, serves fewer than 1,500 students, so these are big cuts.
The Randolph Field schools get about half of their annual budget from the federal government and the other half from the state of Texas. The 9 percent sequestration cut in Impact Aid means the district will lose about $500,000, or 5 percent of the school system budget. A survey being completed by the National Association of Federally Impacted Schools indicates that about 40 percent of the districts relying most heavily on Impact Aid across the country are making the same choices that Walker made.
What is particularly remarkable about this unfortunate situation is the lack of concern or support being exhibited in Congress. Other than the July 25 hearing by the Senate Appropriations Committee, there has been little visible sign of activity or even recognition that the problem exists. In fact, members of Congress representing such districts seem committed to carrying through with the cuts or even making them bigger.
Freshman Rep. Vicky Hartzler (R-MO) represents both the Knob Noster, Missouri, and Waynesville, Missouri, schools. The Knob Noster schools serve Whitman Air Force Base while the Waynesville schools serve Fort Leonard Wood. Between the two they get more than $20 million a year in federal Impact Aid. Rep. Hartzler, however, was one of the House members most insistent on the across-the-board cuts. She explained her vote against debt limit extension that did not include sequestration as follows: “This vote is a clear message to President Obama and his liberal allies that any increase in the debt limit must be accompanied by real, permanent, and sustainable spending cuts.”
Rep. Hartzler has made no comment on her official website with regard to the pending budget cuts in her two school districts but she does advocate for making much bigger cuts in domestic programs such as Impact Aid in order to reduce the cuts in military programs.
A similar situation exists with respect to the school district that serves Fort Sam Houston, also outside of San Antonio. Fort Sam schools get 68 percent of their total budget from the federal government but the man who represents that district, Rep. Lamar Smith (R-TX), said this of the legislation attached to the debt ceiling: “This is the first step in a long journey, but at least we have turned the corner and are headed in the right direction.”
Rep. Smith has posted no statement on his website with respect to the huge dent the Impact Aid sequestration will put into the Fort Sam schools or, for that matter, the Randolph Field schools which border his district.
The Chinle school system serves about 8,500 children on a portion of the Navajo Reservation in Arizona. More than 56 percent of the school’s budget comes from the federal government, and the large majority of that is Impact Aid. Chinle’s representative in Congress, Rep. Paul Gosar (R-AZ), voted like his colleagues in Texas and Missouri to block a debt limit bill that did not include sequestration but he also voted against the debt limit when it did. That does not, however, seem to indicate that Rep. Gosar is more sympathetic to reversing the sequestration cuts being extracted from programs like Impact Aid.
“I was sent to Washington by my constituents with the instructions to rein in federal spending,” he explained after the first vote on the debt ceiling. His website makes no comment on the Impact Aid reductions. Rep. Gosar also represents Window Rock, Ganado, and about a dozen other school districts that are in situations similar to Chinle. Altogether those schools get about $125 million in federal Impact Aid funds.
These are only a smattering of the members representing school districts that rely heavily on Impact Aid, but by and large they are representative of the group. Similar stories can be told about:
- Rep. Lynn Jenkins (R-KN), who represents Fort Leavenworth and Fort Riley
- Rep. Tom Cole (R-OK), who represents Lawton, Oklahoma schools that serve Fort Sill
- Rep. Rick Berg (R-ND), who represents Minot and Grand Forks Air Bases
- Rep. Rob Wittman, who represents the York County, Virginia, schools that serve Fort Eustis, Langley Air Base, the Naval Weapons Station at Yorktown, and other government and military installations
There are some members, among them Rep. Bobby Scott (D-VA) of Newport News, who have expressed deep concern about the consequences of sequestration on both the domestic and military programs, but they are few and far between. It appears that a majority of members representing school districts heavily reliant on Impact Aid not only oppose delaying or reducing domestic sequestration but say it should be increased in order to offset a proposed reduction in defense sequestration. This may please some in the defense community but military families seeking quality schooling for their children will not be among them.
Scott Lilly is a Senior Fellow with the Center for American Progress.