Fiscal Cliff Fears Hit Local Schools

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Senator Lindsey Graham (R-S.C.) recently said the so-called “Fiscal Cliff” seemed likely, while House Speaker John Boehner (R-OH) called the budget proposal from the White House a “joke,” saying the proposal was not serious. Perhaps, more telling, though, was Kentucky Senator Mitch McConnell’s (R) response to the proposal when he met with Treasury Secretary Timothy Geithner. After hearing Geithner’s plan, McConnell laughed. So, here’s the score as of this week. The White House is inflexible on raising tax rates for the top two percent of earners, while Republicans seek tax cuts for everyone and deeper spending cuts to address the $1 trillion deficit and the nation’s $16 trillion debt. All this means one thing: gridlock. And, as the days pass, the Fiscal Cliff, a combination of multi-billion dollar cuts and tax hikes, seems imminent. As such, far from Washington the fear of the seemingly inevitable fiscal cliff has gripped the school districts here in North Georgia.

Six months ago Pickens County Superintendent Dr. Ben Desper voiced concerns about the possibility of automatic education cuts if Congress can’t agree on a budget deal by year end. Last year, a bi-partisan congressional committee crafted a series of across-the-board automatic cuts if Congress is unable to reach a budget deal by the end of this year. The automatic cuts or sequestration cuts equal $109 billion. Two major concerns of the cuts are defense and education. Education cuts will directly affect Title One Programs and, perhaps, Special Education.

During a BOE meeting last year, Desper was specifically concerned about Title One funding, one of the areas included in the sequestration. In addition to these concerns, Pickens County was hit with high health insurance increases. With budget negotiations in Washington in high gear and January under a month away, Desper seems skeptical about a deal coming out of Washington. In a recent conversation with FYN, Desper confirmed that the cuts affect Title One, but added the cuts may also affect Special Education funding.

“We have been very careful with spending the money this year due to the possible cuts,”

he said,

“Some items for purchase will wait if the funding is cut. The real impact will be in how to plan for next year. I am afraid that certain positions will be cut. Our only option would be to fund these positions out of local funds and we cannot afford to do that long-term.”

Title One programs are designed to assist districts fund lower income students. According to Fannin County Director of Curriculum and School Improvement Karen Walton, the district received approximately $1 million in Title One money in FY11. In September, she said, Fannin was told to expect nine percent in cuts to the program, approximately $90,000. Then in the spring Fannin was told cuts would likely occur in the summer, not in January as expected. Regarding Special Education, she said any cuts would affect salaries for Para-pros, parent-liaisons, and intervention positions. Special Ed cuts could affect over 20 Para-pro positions in Fannin’s elementary schools, she noted. She explained that the district’s usual amount would be set aside and if sequestration occurs the Federal Government will draw the cuts from that amount.

In a recent conversation with FYN, Fannin Superintendent Mark Henson said the Fannin District has been anticipating and planning for the cuts. Additionally, though, he said he has concerns about more state austerity cuts in the wake of the recent charter referendum, where last month voters approved the state to create a charter commission with authority to approve charters otherwise denied by local boards. According to Henson, if charters are approved in the district, the system will receive less state funding due to lower enrollment. He also said Fannin will be under-funded $2.1 million in FY13 and expects more state cuts with new charter schools.

Gilmer County Superintendent Bryan Dorsey also has concerns about a possible sequestration. According to the county’s Financial Officer Julie Swindle the district received $1,528,982 in Title One funding in FY12 and $741,675 for Special Education. If cuts occur, the strain will be added to $420,000 in health insurance increases for FY13. In a recent email to FYN, Superintendent Dorsey said the district has received so many conflicting reports in the financial impact that it is difficult to predict the amount of cuts without additional information from the federal and state departments. He also said the county has been exploring various scenarios to measure the program impacts in the face of cuts to ensure the future stability of the system’s finances.

“We would be able to continue for the short term on the current course should the board elect to do so,”

Dorsey said, adding,

“We are fortunate to have enough in the general fund to cover all of the title programs if we had to for a very short period of time to make adjustments.”

But, as local school districts and governments make temporary arrangements, a long-term deal from The Hill to avert a deeper slope into recession anytime soon seems unlikely. Senator Democratic Leader Harry Reid said today that reaching a deal by Christmas is going to be extremely difficult. In the meantime, though, local governments in North Georgia and around the Nation will continue to cut where they can with the least damage.

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