New Survey Finds Schools Facing Growing Budget Cuts and the End of Stimulus Funding

April 8, 2010

Amy Vogt

aasa_imageARLINGTON, Va. – Students and school systems across the nation are facing serious challenges as a result of the economic downturn, according to a new survey of school administrators released today by the American Association of School Administrators. Compounding an already tough budget environment, schools are facing the harsh reality that stimulus funds will soon run out and the Obama Administration’s proposal to shift additional education dollars away from long-time formula grant programs to competitive grant programs. The new study, “Cliff Hanger: How America’s Public Schools Continue to Feel the Impact of the Economic Downturn,” is the seventh in a series of studies by AASA examining the impact of the economic downturn on schools.

Click here to download the study.

Click here to watch a video interview with the study's author, Noelle Ellerson, and AASA Executive Director Dan Domenech.

This study, based on a survey of 453 school administrators conducted in March 2010, finds that school districts’ economic situation does not mimic the stability and recovery beginning to take hold nationwide. In fact, the latest survey findings document the continued erosion of fiscal resources available to school districts and demonstrate that, across the board, school budget cuts are noticeably more significant for 2010-11 than they were in 2008-09 or 2009-10.

Survey highlights:

Three themes emerge from this survey:

  • The American Recovery and Reinvestment Act played a vital and important role in helping stave off even more severe budget cuts to education funding.
  • The cessation of ARRA dollars, paired with the continued budget strains at the state and local levels and the proposed FY11 federal budget, represent a one-two punch to education funding that will further insulate schools from economic recovery, and will likely translate into more budget cuts, more job cuts, and fewer resources for school programs and personnel.
  • While school administrators understand and recognize the role of competitive grants in education, they raise distinct concerns, including:
    • competitive grants represent budget instability and are unlikely to be considered for the very long-term innovation and reform the Obama Administration is hoping to spur;
    • the application process for competitive grants uses a school’s administrative and financial resources to pursue a funding stream that may or may not come to fruition; and
    • financially strapped school districts across the nation do not have the capacity to complete competitive grant applications.

These results are magnified and amplified in small, rural districts.

The data from the survey of administrators indicate that stopgap efforts to avoid personnel cuts were short-lived. Personnel costs are commonly understood to represent more than 80 percent of most school districts' budgets. Personnel reductions are anticipated to increase in the 2010-11 school year.

  • More than two-thirds (68 percent) of respondents cut positions in 2009-10, and 90 percent anticipate having to do so in 2010-11.
  • Regardless of the much appreciated ARRA dollars, which were used to save an average of 20 positions per school, school districts report eliminating, on average, 29 positions over the 2009-10 and 2010-11 school years.
  • The percentage of respondents reducing benefits packages has skyrocketed: 46 percent of respondents will reduce health-care benefits in 2010-11, compared to 12 percent in 2009-10 and 5 percent in 2008-09. Similarly, 20 percent of respondents will reduce pension contributions in 2010-11, compared to 3 percent in 2009-10 and 0.7 percent in 2008-09.

The increasing intensity of budget cuts for the 2010-11 school year reaches beyond personnel decisions.

  • Students will soon be more crowded in their classrooms: While only 9 percent of respondents increased class size in the 2008-09 school year, that number nearly tripled to 26 percent in 2009-10 and is anticipated to more than double to 62 percent for 2010-11.
  • After holding steady at two percent for both 2008-09 and 2009-10, the percentage of respondents considering reducing operations to a four-day school week (during the school year) mushroomed to 13 percent in 2010-11.
  • More than one-third (34 percent) of respondents are considering eliminating summer school for the 2010-11 school year, a rate that has roughly doubled each year, from 8 percent in 2008-09 to 14 percent in 2009-10.

When asked to rate their level of agreement with a handful of statements related to education funding, competitive grants and the interplay between federal dollars and the school budget process, respondents demonstrated consistency in their opinion that competitive funds have a role—albeit limited—in federal education funding. Recognizing that competitive grants have some role in federal education funding, two thirds of respondents (66 percent) agreed/strongly agreed with the statement: “Competitive grants have a place within the funding of public education, along with continued funding and increased investment in proven formula programs such as Title I and IDEA.”

“The economic downturn persists at the state and local levels, a reality that needs to be considered as Congress and the Obama Administration move forward with both the federal budget process and the reauthorization of the Elementary and Secondary Education Act,” said Dan Domenech, AASA executive director. “The results of this survey underscore the importance of understanding the true impact that federal policy and funding have at the state and local levels, especially in tight economic times. Our members were clear in articulating their concern about the cessation of ARRA dollars, the proposed level funding for IDEA and Title I, and the significant shift to competitive grants within the federal education funding process.”

“School administrators recognize that both competitive grants and formula funding have a role in helping to fund education while providing opportunity and incentive for innovation and reform in support of all students,” said AASA President Mark Bielang, superintendent in Paw Paw, Mich. “That said, AASA members are very clear on two points: competitive grants represent budget instability and are unlikely to be considered for the very long-term innovation and reform the Obama Administration is hoping to spur, and the application process for competitive grants uses a school’s administrative and financial resources to pursue a funding stream that may or may not come to fruition—resources that would otherwise be available for school personnel and programs that more directly impact student instruction and achievement. Financially strapped school districts across the nation were clear in reporting that they do not have the capacity to complete a competitive grant.”

AASA Economic Impact Studies

The previous studies in the AASA Economic Impact Study series are available at

About AASA

The American Association of School Administrators, founded in 1865, is the professional organization for more than 13,000 educational leaders across the United States. AASA’s mission is to support and develop effective school system leaders who are dedicated to the highest quality public education for all children. For more information, visit