Bulldog Relays and the Impact of Sequestration

Today, EISD will be hosting the annual Bulldog Relays. The field events will start at 3:40. The first running event will be the 3200 m run. That race will start at 4:00. All of the other running events will start at 5:30. There is no admission charge for the track meet. Everyone is invited to come out and enjoy a great evening of track and field.

Yesterday, I touched upon the impact that federal sequestration might have in the district. Sequestration is the automatic cuts that will go into effect at the federal level if a budget resolution is not adopted. Sequestration will impact programs ranging from national defense to education. Below is correspondence from TEA on the effects that the reductions are predicted to have in the state of Texas:

House Appropriations Committee
Subcommittee on Budget Transparency and Reform

 TEA Testimony, Cory Green, Chief Grants
Administrator

General Information

The American Taxpayer Relief Act of 2012, reached at the beginning of the
year to avoid the “fiscal cliff,” postponed the sequestration action of the
Budget Control Act of 2011 from January 2, 2013, to March 1, 2013. Due to the
postponement, the total amount of the cut in fiscal year 2013 was reduced by $24
billion, from $109 billion to $85 billion.

Without legislative action this week, the budget reductions will be
implemented across most federal education programs with the next state education
allocations on July 1, 2013. However, some local educational agencies (LEAs)
receiving direct grants from USDE, such as Impact Aid programs, will start
seeing federal reductions as quickly as USDE is able to calculate the reductions
to grantees.

Most federal education programs are forward- or advance-funded, meaning the
state receives the majority of the federal fiscal year funding on July 1, at the
end of the federal fiscal year for use primarily in the following fiscal year.
USDE has reported that forward-funded programs will not be retroactively cut
back to the October 1 beginning of the federal fiscal year, but will take the
full reduction from the July 1 allocation. What this means for LEAs is that
their school year (SY) 2012-2013 entitlements will not be reduced mid-year, but
rather the full reduction will be taken from their SY 2013-2014 entitlement
amounts.

Many education groups following the sequestration process are calculating the
estimated potential impact of the reductions. USDE has used an estimated impact
of 5% in a letter provided as testimony in a Congressional committee hearing.
(National Title I Association is using USDE estimates.) Other groups have
calculated reductions of 5.1% (Center on Budget and Policy Priorities, used by
NEA, CCSSO, et.al.) to 5.3% (Government Accountability Office, used by AASA,
et.al.) which due to the two month postponement is less than prior estimates of
8.2% reductions.

Since Congress has not yet completed work on appropriations for fiscal year
2013, we can only model data based on federal fiscal year 2012 data. Actual
reductions will differ slightly once federal fiscal year 2013 appropriations are
finalized. The Office of Management and Budget (OMB), which has responsibility
at the federal level for determining the actual percentage of the reductions,
will release the amount and percentage of reductions required by the Budget
Control Act after March 1, 2013. This process is expected to take at least 30
days.

While Congress and the Administration continue to discuss the sequestration
process, many do not believe there is time to pass legislation to avoid the
reductions required on March 1, 2013. It has been proposed by some groups that
the sequester could be addressed in the federal fiscal year 2013 appropriations
due by March 27, 2013, when either an appropriations bill or another continuing
resolution must be passed.

Potential Impact

For discussion purposes, the state’s largest federal programs demonstrate the
potential impact on LEAs.

  • ESEA, Title I allocation could be reduced by $67-71 million depending on a
    5.0% or 5.1% reduction, which could impact services to approximately 285-300
    schools, 172,000 to 179,000 students, and 930 to 1300 staff.

Based on a 5.1% reduction,

  • The Individuals with Disabilities Education Act (IDEA, Part B) allocation
    is expected to be reduced by approximately $50 million, with reduced services to
    impact approximately 20,000 students and 900 staff,
  • The ESEA, Title III, Part A–English Language Acquisition allocation is
    expected to be reduced by approximately $5.2 million with reduced services to
    38,000 LEP students and 100 staff, and
  • The Perkins Career and Technical Education allocation is expected to be
    reduced by approximately $4.5 million, with reduced services to 66,000 CTE
    students and 75 staff.

One of the largest concerns for LEAs (school districts and open-enrollment
charter schools) is the need for more information to be able to plan for next
year’s staffing, services, and program budgets. In general, LEAs would be
required to reduce their services to students served by each program. This may
be accomplished by across the board reductions to staffing, professional
development, direct services to students, and LEA administration. However,
generally it appears most LEAs would likely take the reductions in professional
development related costs and direct services to students not provided by grant
funded staff as a preference to reducing grant funded staff and the related
direct services provided by those staff.

Regardless of reduced state administrative funds, TEA is still required to
meet federal requirements for compliance, reporting, and submission deadlines.
The vast majority of federal grants are formula, or entitlement, awards to the
LEAs and the amount of work required to administer and implement the federal
programs would not change.

For discretionary type grants, TEA would likely provide less assistance to
grantee LEAs, have slower grant response and processing/approval time, and could
potentially eliminate some smaller grant programs or contracts in order to
maintain funding for other higher priority projects.

Also of concern to states and LEAs are the impact on the sequestration
reductions on federal maintenance of effort (MOE) and supplement, not supplant
requirements at both the state and/or local levels.

Currently, TEA has only modeled a 10% reduction (based on earlier projected
reductions). However, for some programs with hold-harmless provisions, such as
Title I, Part A, in the statutory formula this 10% model suggests the “worst
case” scenario. In Title I, Part A statute, the hold-harmless provision applies
to state appropriations as well as LEA entitlement calculations. The LEAs that
by the data are at or below the hold-harmless amounts must be guaranteed the
hold-harmless amount while the LEAs above their hold-harmless amount actually
have the sequester reductions taken from their allocations. All LEA
hold-harmless calculations in the country are aggregated up to the state level;
meaning Texas’ overall state allocation could be reduced more than the estimated
5.1–5.3% by the statutory formula.

Once the state receives more detailed information from USDE after March 1,
2013, TEA Grants Administration staff will model the reductions and make
planning amounts available to LEAs. It is estimated that the
entitlement/planning amount calculations will take 3 weeks to complete once data
are received.

 

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