EdVANTAGE Blog

Earlier in the week, Governor David Paterson and U.S. Senator Chuck Schumer announced that they are seeking inclusion of a “flexible P-16 (PreK through higher education) block grant in the anticipated federal stimulus package.

Newspaper accounts report that Senator Schumer said that it is “likely” that the federal bailout package will include about $80 billion for education programs.  He believes New York schools and colleges could receive as much as $6.4 billion over two years from this aid.

Timing is a key issue for school leaders now developing budgets — when will they know if federal help is forthcoming and how much will their districts receive.  U.S. House Speaker Nancy Pelosi has said she hopes that a bill will be passed before Congress leaves for its Presdents’ Day recess in February.

Referring to the funding as a “block grant” suggests that the states could have some discretion over how it would be distributed.  So even if Congress and the president act by mid-February district allocations may not be settled until a later date.

Senator Schumer also made clear that the school funding he and Governor paterson are seeking is in addition to an increase in the federal share of Medicaid costs, which could generate $5 billion for New York State.

Tomorrow (February 15), the Governor is expected to release his “30-day” amendments to the budget he proposed last month.  With the sour economic news over the intervening weeks (including a 9.8 percent drop in December retail sales compared to a year ago), it’s probable that the Governor will report that the state’s deficits have grown.

In the budget he unveiled in December, the Governor said that the state faced a projected deficit of $13.  billion, which proposed to close through a combination of spending cuts ($9.5 billion), new revenues ($3.1 billion) and non-recurring items (commonly referred to as “one shots”) totaling $1.1 billion.

To add back enough School Aid to have significant benefit for school budgets, the state will need to turn to some “non-traditional” funding sources.  The traditional sources of more optimistic revenue projections and cuts to other areas can’t generate adequate sums.

While usually the Legislature’s economic optimism proved justified in the past, the opposite fate seems more likely now.  And other areas of the state budget are already targeted for steep cuts.

Also the Legislature will want to make restorations of cuts to other budget areas and perhaps forego some of the tax and fee increases that Governor Paterson recommended.

So the best hope for the state and the schools is probably help from a federal stimulus package.