Despite Stimulus Funds, Many School Districts Face Financial Crisis


As the new school year begins, the impact of the economic recession remains painful for many school districts across the country.  Faced with alarming budget shortfalls, many school districts are taking drastic measures to keep schools open.

For example, Chicago Public Schools eliminated 500 of its non-classroom positions with 500 more expected and Detroit Public Schools laid off over 1,700 employees including 1,000 teachers.  Education Week recently reported that, in California, an estimated 17,000 teachers have been laid off and new textbooks are deferred until at least the 2013-2014 school year.  Education Week also reported that Delaware and Georgia are cutting teachers’ salaries through unpaid furlough days.  In addition, a number of school districts are reducing transportation services for students, causing parents’ and students’ concerns about the ability to get students to school safely.

Although the $100 billion in stimulus funding for education programs provided unprecedented financial support to public k-12 school districts, the severity of the economic recession still placed many school districts across the country in financial crisis due to staggering budget shortfalls.  There are no data available at this time to evaluate the financial benefit of the stimulus funding, however; it appears that the $48.6 billing State Fiscal Stabilization Fund has helped to avoid significant cuts in school district staff in some states.



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