As
you know, Congress failed to get its act together, the federal government is
now shutdown, and there are implications for schools.
As
we continue to open our school doors (students show up whether or not the
federal dollars do), here is a rundown of the most common questions asked:
- What do schools need to know? When it comes to public education,
there are three federal agencies that we work most often who operate
programs that impact schools: US Education Department, US Department of
Agriculture, and FCC (Federal Communications Commission). Each has released
its shutdown plan. Linked below is a quick blurb regarding the short-term
impact.
- USED: October 1 payments for programs will
go out (Title I, II & VI and IDEA (special education))
- USDA: School lunch and school breakfast programs
would be unaffected in the initial shutdown.
- FCC: The E-Rate program will be unaffected
in the shutdown, as the processing of payments is handled by USAC, not
the FCC.
- How will a short-term shutdown
impact schools?
In addition to the summary above: Grant processing for Race to the Top,
Investing in Innovation and Promise Neighborhoods will lapse until the
shutdown is over. Other grant programs that do not have any leftover money
will be unable to incur new obligations until the funding crisis is
resolved. If the shutdown lasts longer than a week, there will be a
backlog in the distribution of funds via both competitive and formula
grants later in the year because most Department staff will remain
furloughed and unable to make up the time lost. Could this affect our 21st
Century Programs? IDK
- How will a long-term shutdown
impact schools?
A long-term shutdown would essentially eliminate the ability of federal
agencies like USED and USDA to maintain cash flow to school systems. This
limit on cash flow harms schools districts, but especially those whose
overall budget is heavily reliant on federal dollars.
- How did we get here? Congress failed to complete its
annual work to complete the appropriations process (which would fund the
federal government). Typically when this happens, Congress adopts a
Continuing Resolution, which allows the federal government to remain open
by level-funding agencies. This Congress was unable to reach such an
agreement. The House is focused on trying to pair CR decisions with
efforts related to the Affordable Care Act. The Senate prefers a ‘clean’
CR, one that addresses only annual funding. The gridlock resulted in
this shutdown.
- How does this get resolved? The shutdown will end when Congress reaches agreement on a proposal to fund the government. While this is an absolute possibility, it is obviously not an absolutely reality. The CR discussion has become political fodder, similar to the debt ceiling in 2011, and a seemingly narrow discussion (what is the overall approach to keeping the government open) has been tied to other more policy-laden discussions (how to fund/delay implementation of the Affordable Care Act).
- How long will this go on? Is it
likely to repeat?
This shutdown could last as long as a few weeks. It could be over in a
day, but that seems unlikely. The likelihood of a repeat shutdown will
depend on if Congress adopts a short-term CR or a long-term CR. A
short-term CR makes it more likely that we find ourselves once again at
the verge of a shutdown, especially if the end of the CR is anywhere near
the debt ceiling discussion. Some say to prepare for a shutdown that could
run until the middle of October.
- How does this relate to the debt
ceiling issue?
The conversation about annual appropriations (including the CR) is
separate from that of the debt ceiling. They overlap, in this
instance, in terms of timing. The last time there was contention in
the raising of the debt ceiling, there was a threat of shutdown which was averted
at the last minute through the Budget Control Act. The decision to raise
the debt ceiling was coupled with efforts to curtail spending and address
the debt/deficit, and triggered sequestration. While the debt ceiling is
theoretically separate from the annual appropriations process and the
shutdown, the reality is that the longer the shutdown carries on, the more
likely it is that the call to provide funding gets linked with the debt
ceiling.
The debt ceiling question will become critical in the middle
of October. At this point, it is projected that the federal government will hit
its debt ceiling October 17. The shutdown means that spending will be somewhat
suppressed, so it is likely the actual date of hitting the ceiling will be
pushed back a few days. It doesn’t change the reality, though, that there are
very real consequences for not addressing the debt ceiling that are beyond
those related to federal shutdown. For schools, a downgrading of the nation’s credit
score could have implications for districts’ ratings.
The CR discussion is part of what could be a ‘perfect storm’
of federal funding discussions with potentially devastating impacts for the
nation’s schools. The confluence of the lack of a CR, the shutdown, and the
debt ceiling could completely eradicate the economic stability that has taken
hold, pushing the country back toward another recession.
