After the elections in November and before the end of 2012, Congress will be faced with several major decisions that will impact our nation’s fiscal situation, including funding to support education programs. One of these major decision points is how to deal with automatic funding cuts (called Budget Sequestration) to both military and domestic spending programs that will take place on January 2, 2013. Approximately 8 percent will be automatically cut from federal discretionary programs, including nearly $20 million from the overall allocation to the Federal Charter Schools Program (i.e. state education agency grants, non-state education agency grants, replication and expansion for high-quality charter school grants, credit enhancement for charter school facilities grants, the national leadership activities grants, and the state charter school facilities incentive grants)—assuming these programs otherwise were allocated the same funding as last year in the appropriations process (i.e. $254 million).
It is important to note that U.S. Department of Education Deputy Secretary Tony Miller issued a memorandum on July 20, 2012 to states to clarify how these reductions would take place in 2013. This memorandum stated that all 2013 cuts would come from funding states receive in July of 2013, and that no sequestration cuts would impact the 2012-2013 school year.
Sequestration is the outgrowth of the creation of a “Super” Committee that Congress created in August of 2011. This Committee was tasked with identifying and approving $1.2 trillion in cuts in federal spending over ten years. The Committee was not able to come to agreement on which cuts to approve, so a process called Budget Sequestration was triggered.
Budget Sequestration institutes across the board cuts in nearly all federal spending programs of roughly the same amount. Certain programs like Medicare, Pell Grants and child nutrition programs are either exempt from Sequestration or have limits on the percentage of funding that can be reduced. Left unchecked, cuts of $110 billion in federal spending will happen each year, starting with this January, for the next nine years. These cuts will be evenly divided between military spending and non-defense related spending.
Sequestration will have an especially devastating impact on education programs, translating into cuts of about 8 percent each year of this nine-year period. For the Individuals with Disabilities Education Act’s Part B Grants to State program (the main federal program funding special education services in K-12 schools), this will mean a cut of approximately $900 billion nationally in 2013. For Title I (the primary program under the Elementary and Secondary Education Act focused on the education of disadvantaged students), school districts will receive a cut of $1.1 billion nationally in 2013.
What are the options for Congress? If no action is taken, these harmful cuts will be implemented. Congress could also substitute other reductions in spending to meet all or part of the $1.2 trillion that will be cut over the next nine years. At the time of this posting, there is no consensus yet in Congress on how to respond to Sequestration, and a resolution, if one comes, will likely not be determined until after the November elections.
We urge all members of the public charter school community to take note of this situation, and be prepared with contingency plans to address possible funding reductions in the new year.